If you have a large estate in New York, one of your main concerns is likely about taxes. You want to minimize the taxes your heirs will pay when they receive their inheritance. When dealing with large amounts of money, taxes could take a good portion of that money. To maximize the benefits for your heirs, you always have to think about the tax impact. This includes estate and gift taxes.
In 2017, new tax guidelines went into effect to help reduce the taxes your heirs will pay, according to Bloomberg. The changes increased the exemption limits for estate and gift taxes to benefit higher-income estates. The limit for individuals is $11.4 million and for couples is $22.8 million. The prior limits were about half this amount.
Your heirs will get up to the limit tax-free, but the limits go back down in 2026. This tax change is meant for only a set time. This brings up some concerns about what happens with estates created now. For example, if you create your estate plans right now, but you do not die before 2026, what limit will apply to your estate?
The good news is that the ruling is as long as your estate plan originates under the current limits, then it stays at the current limits regardless of when you die. What this means for you is that you need to ensure you have everything in place before the 2026 deadline. Ideally, you want to do it as soon as possible since the political climate could alter this deadline. This information is for education and is not legal advice.