The IRS has announced its estate tax and gift exemption for 2016, which is $5.45 million per individual and $10.9 million for a married couple. This is up just a bit, based on inflation, from the 2015 exemption of $5.43 million applicable to residents of New York and across the country. The yearly gift exemption remains the same, at $14,000.
New York residents who are embarking upon the estate planning process may have heard about new digital options and wondered if this is the right choice for them. Digital document archives have both pros and cons associated with them. Family members have sometimes spent months or even years searching for financial documentation belonging to deceased loved ones, and digital storage has the potential to make it simpler to find those items.
People living in New York may worry about their heirs having to pay estate taxes after they die. However, most people will never have to worry about federal estate taxes. They simply do not have enough money for this tax to become a factor in their estate planning, although the New York estate tax exemption is lower than the federal one.
New York residents who plan to leave a multi-million dollar estate to their heirs might be worried about taxes because the federal government takes 40 percent, which can account for a large chunk of the assets. However, there are steps that they could follow to limit how much their heirs pay in estate taxes.