Even though the Tax Cuts and Jobs Act has increased the exemptions for GST and individual estate gift taxes, New York residents should still review their estate plans. There are many issues not related to federal estate taxes that should be closely examined.
New York parents concerned about whether their adult children can handle the responsibilities associated with major inheritances may consider using trusts. One mistake that parents often make with estate plans is bequeathing their wealth outright to adult children who lack financial wisdom.
New York residents who use revocable living trusts should make sure that they're using this estate planning tool to its full potential. Not using a living trust properly can result in a poor investment of the legal fees paid to establish the trust.
For New Yorkers facing estate planning decisions, or dealing with wills made by others, probate can be an intimidating process. While probate court is often reviled as a venue for assets to be wasted through attorney fees and family infighting, it can actually have a place in well-considered estate planning. The key to a streamlined probate process is clarity and forethought.
Although the tax bill signed into law by President Trump in 2017 increased the estate tax exemption to over $11 million for individuals and more than $22 million for married couples, New York residents might still want to keep other taxes in mind when creating an estate plan. There are strategies people can follow to reduce both transfer and income taxes.
Estate planning can be an emotional task for people in New York as it involves dealing with emotional and complex issues about the end of life and relationships with one's heirs. However, it can also be critically important to ensuring a smooth transition and protecting the assets one has worked so hard to develop over the years.
While many people in New York intellectually understand the importance of estate planning, many fail to take action. As a result, many New Yorkers lack even basic documents that indicate what they want to happen to themselves and their assets after they die or become incapacitated.
New Yorkers who are invested in bitcoins and other cryptocurrencies may be concerned about the future of their investments after their death. Because these are relatively new developments, many investors have not yet accounted for them explicitly in their estate planning documents. Yet digital assets, from personal profiles on social media sites to online accounts in cryptocurrencies, can be some of the most important ones a person owns.
Since tax reform passed in December, some people in New York might want to revise their estate plans to reflect the change in estate tax. While this is a change that will only affect very wealthy people, even those who do not need to worry about estate tax may want to review their plans. It is a good idea to look over a plan periodically and make sure it is still consistent with a person's goals, assets and relationships.
People in New York who are art collectors may want to include plans for their collection in their estate plan. Collectors may often procrastinate on dealing with art in their estate plan until it is too late. This could be because the collector is undecided as to who to give the collection to, but this can lead to estate tax for the family and conflict over what happens to the art.