In The News
September 2, 2010
Governor Patterson recently signed legislation that amended the New York Estates, Powers and Trusts Law (EPTL) to clarify that formula clauses in Wills and trusts of individuals dying in 2010 should apply the Federal estate tax and generation-skipping transfer tax exemption amount of $3,500,000, applicable as if the person died in 2009. This law is similar to those passed in many other states and provides guidance as to the funding of trusts and handling of bequests for New Yorkers who died in 2010 without having modified their Wills to take into account the repeal of the Federal estate tax and tax on generation-skipping transfers.
For more information, a detailed description and the text of this amendment [A9857/S8056] to the EPTL, you may visit the New York State Assembly's website:
May 25, 2010
Last week it appeared that an agreement had been reached between Democrat and Republican Senators to restore the exemption from Federal estate tax to $3,500,000, with a tax rate of 35% (applied to a deceased person's assets greater than that amount). Over time, the exemption would have increased to $5,000,000. Unfortunately, as has become the norm in today's political world, this tentative resolution soon fell apart, so we are still faced with uncertainty over how the Federal estate tax law will be applied for individuals who die in 2010 and in future years.
HR4154 Passes House: Federal Estate Tax Exemption and Rate Permanently Unchanged
The House of Representatives voted on December 3, 2009 to permanently extend the current federal estate tax applicable exemption amount of $3,500,000, and retain the federal estate tax rate of 45%, for estates worth more than $3,500,000 [HR 4154]. It is anticipated that the Senate will not vote on a similar bill before year-end and that any change to the law will apply retroactively to January 1, 2010.
Annual Gifting Limitation for 2010
You may make annual gifts of up to $13,000 to as many individuals as you wish without incurring a gift tax. The filing of a gift tax return is not required. Married couples can make combined gifts of up to $26,000. Unlimited gifts are allowed for medical and educational purposes.
Changes to New York Power of Attorney Form as of September 1, 2009
Effective as of September 1, 2009, a revised form of Power of Attorney must be used in New York. Properly executed forms signed prior to that date are still effective and do not need to be updated.
Among other changes, the new form forces the attorney and client to address issues relating to gift giving, especially in the event of incapacity. A new “Major Gifts Rider” must be signed and witnessed in order to authorize gifts of more than $500.