New York residents have more reason to worry about estate taxes than those who live in many other parts of the country. The state taxes estates at rates ranging from 5 percent to 16 percent, and the exemption for 2015 is $3,125,000. The exemption will increase each year, and it is expected to match the federal exemption in 2019. The federal estate tax is 40 percent, and the exemption for 2015 is $5.43 million. The federal estate tax exemption is adjusted every year according to the rate of inflation.
Estate planning and where to start
Estate planning can make life easier on a person's loved ones by reducing confusion and providing an action plan if the unexpected occurs. An estate plan can reduce worry during an already stressful time and help prevent family from fighting in New York state courts over property.
Benefits of communicating with heirs during estate planning
Someone in New York who is preparing a will or other estate planning documents does not necessarily have to discuss the provisions with the chosen heirs, but including heirs in some or all of the process might be beneficial. For example, asking children which specific items, especially sentimental ones, they would like to have could prevent disputes and disappointments when the time comes.
One-third of millionaires have no estate plan
Many wealthy families in New York have no estate plan set up to govern how assets should be dispersed to their heirs. According to a survey of 750 millionaires that was conducted by CNBC, 38 percent of people with at least $1 million in investable liquid assets have not established an estate plan with the assistance of a financial adviser.
