Your Estate Plan and Your Loved Ones

How do you want to be remembered?

You have spent your entire life planning for the different stages of your life.  As a young adult, you planned for your higher education. After you met that special someone, you planned your wedding and later your family.  You made plans for raising and educating your children.  You are planning or have planned for your retirement.  So, with death an inevitable reality — have you prepared your estate plan?

Protecting Your Loved Ones

By planning your estate,  you protect all of your prior plans.  You insure that whatever wealth you have accumulated during your lifetime of planning will go to those loved ones you have spent your life protecting and planning for.

By planning your estate, your loved ones will not be torn apart by the disputes that often affect the estates of people who do not plan.

And, with proper estate planning, you also provide your loved ones with more of your assets. Good estate planning includes planning for State and Federal taxes, which will be due within nine months of your death.

Estate Taxes

  • While estate taxes will not concern most people currently, the big question is how will estate taxes affect you in the future. The new estate tax amounts revert to the old amounts (approximately $5,600,000.00 now, indexed for inflation for each succeeding year) as of January 1, 2026.
  • The fair market value of your home, less any mortgage against it, is included in your final estate for the purposes of determining whether you owe estate taxes.
  • That value, along with the value of all of your other assets — anything that you own or control at the time of your death (including life insurance benefits and jointly owned property/accounts) — is added together.
  • If the sum exceeds your applicable exclusion (up to $11.18 million for an individual in 2018, potentially $22.36 million if you are a surviving spouse), federal estate taxes are levied against the excess.
  • Federal estate taxes are 18-40 percent on the value over the applicable exclusion, but, with the unified credit, any estate that does pay Federal estate taxes pays it at the 40%rate.
  • They are also due from your estate, in cash, within nine months of death.
  • New York State’s death taxes are paid after an estate exceeds $5,250,000.00 (the exclusion amount in 2018) in total value.
  • If a New York resident’s estate is valued at more than $5,512,500.00, then taxes are paid on the entire estate, not just the value above the exclusion amount.
  • In NY, before January 1, 2019, there is a three year look-back for gifts made. That means, the value of any gifts made up to three years before a death are added back into the value of the estate. From January 1, 2019, there is no longer a look-back and recapture for gifts.
  • Proper legal planning, however, can help reduce or eliminate an estate tax burden.

No Estate Plan

If you die without an estate plan … what stranger will be administering your assets and who of your loved ones will be paying the estate taxes??

Wills and Trusts

Now that you have some facts, you should, at the very least, have a Will to specify whom you would prefer to receive your assets  in the event of your death.  But realize that a Will takes your estate through the probate process.  If you prefer to keep your personal affairs private, and avoid the unnecessary expense and time delays of probate, you may want to consider a Revocable Living Trust. Trusts can also help very large estate’s escape estate taxes, even if created within a Will and not becoming active until after your death.

Still Have Questions?

The attorneys at BURKE & BURKE, ESQS., P. C.  are happy to meet with you in a confidential setting at no charge.  We will review your current situation, make recommendations, and quote a flat fee for legal services to accomplish your estate planning goals.  To schedule an appointment, please call the office at (516) 249-3978.