Yesterday, New York State made sweeping changes to its estate tax laws
with the passage of the state budget.
The "exclusion amount" for state residents dying on or after
April 1, 2014 will be $2,062,500. The exclusion amount will increase as follows:
April 1, 2015 - $3,125,000
April 1, 2016 - $4,187,500
April 1, 2017 - $5,125,000
Starting January 1, 2019, the State exclusion amount will follow the federal
exclusion amount, which is currently $5,340,000, but is indexed for inflation.
Gifts made within 3 years of death are added to the taxable estate. This
does not apply to gifts that were made prior to April 1, 2014. Gifts made
on or after January 1, 2019 will not be added to the taxable estate.
In addition to the foregoing changes, a perceived loophole was closed that
allowed certain trusts established by New York residents to escape New
York State income tax if the trustees were outside New York and the assets
were located outside New York.