Long Island estate planning attorney Seth Schlessel (https://www.schlessellaw.com/how-does-new-york-state-gift-tax-work/) of Schlessel Law, PLLC, has recently published an informative piece titled ‘How Does New York State Gift Tax Work?’. The article provides a comprehensive overview of the state’s gift tax landscape, offering valuable insights to anyone looking to navigate their way through the intricacies of this essential aspect of estate planning.
In the first few lines of his article, Schlessel, a renowned Long Island estate planning attorney, introduces readers to the concept of gift taxes: “Gift taxes are a financial obligation imposed on a person’s right to transfer property to another person without receiving fair market value in return.” He further explains that while New York State doesn’t require residents to pay a state-level gift tax, there are federal gift taxes and other limitations that residents must be aware of when granting assets to beneficiaries.
The Long Island estate planning attorney continues by explaining the provision of a “de facto” gift tax. This unique provision incorporated by New York State indirectly imposes a gift tax by including the value of any gifts given within three years before the taxpayer’s death in the New York estate tax calculation. “Essentially, if a donor does not survive for at least three years from the date of a gift, the value of that gift could be subject to New York estate tax upon their death,” Schlessel explains.
Schlessel’s article also delves into the details of gift tax exclusions and lifetime exemptions in New York. He explains how the federal government imposes a tax on gifts exceeding a specific amount, which is determined annually. “For 2023, the annual federal gift tax exemption is $17,000,” reveals Schlessel. He also clarifies that when gift amounts exceed the annual exclusion, only the surplus is taxed.
The Long Island estate planning attorney breaks down the complex workings of the New York 3-Year Clawback Rule. “When a person passes away, the state will include the last three years of gifts the person gave away from their estate and include the gifts for the last three years in the calculation for the person’s estate taxes,” Schlessel explains. He further details how the lifetime exemption for gift and estate taxes applies to the amount calculated under this rule.
Schlessel emphasizes the importance of estate planning, irrespective of the estate’s size. He explains how estate planning tools can be optimized for tax purposes and how the impact of existing legislation on an individual’s estate can be understood and navigated.
To find out more about the intricacies of New York State gift tax, take a moment to read this insightful article by Seth Schlessel. It offers a wealth of knowledge that can help clarify the complexities of estate planning and gift tax implications.
About Schlessel Law, PLLC:
Schlessel Law, PLLC, is a distinguished law firm based in Long Island, led by accomplished attorney Seth Schlessel. The firm is committed to assisting clients navigate the complexities of estate planning, leveraging their in-depth knowledge of the law to protect assets and adhere to legal requirements. The team is renowned for its dedication to providing tailored plans that meet the unique needs and financial situations of their clients, all with the primary objective of helping them achieve their estate planning goals.
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