Administering the New York Estate

 
Every estate may be subject to two types of death taxes, depending on the total value of all assets including the taxable estate and to whom the assets pass. The taxable estate is not the same as the probate estate. The taxable estate includes both probate and non-probate assets.

One type of death tax is the Federal estate tax, based on the value of the assets in the taxable estate. The federal estate tax is a graduated tax that is levied on the net estate after allowing for certain deductions and exemptions. The Federal exemption for the years 2011 and 2012 is $5 million. However, absent action by Congress the Federal estate tax exemption is scheduled to be reduced to $1 million in 2013.

The second type of death tax is the New York estate tax. This tax is similar to the Federal estate tax but the exemption amount is only $1 million. Thus, a New York estate tax may be payable even though no Federal estate tax is due.

Another tax is the federal and state fiduciary income tax that is based on income and expenses generated from the probate estate assets. This tax is very similar to the federal and state personal income tax.

The obligation to prepare and file tax returns and pay the appropriate tax liability may exist even if the deceased left no probate estate. This is due to the fact that jointly held property, life insurance and certain types of transfers by the deceased prior to death are subject to taxation by the state and federal governments. Due to the complexities involved, an executor or administrator should not attempt to draft the necessary returns, compute the taxes due nor meet the necessary filing requirements without the supervision and guidance of a lawyer.

 
More related articles

• How To Probate a Will in New York State
• What is New York Probate?
• What Property is Not Included in the New York Probate Process?
• How Long Does it Take to Complete New York Probate?
• Are Most Wills Admitted to New York Probate Without a Will Contest?
• What if the New York Decedent Left No Will?
• Can I Handle New York Probate on My Own?
• Is There an Advantage to Avoiding New York Probate?
• What Is the Responsibility of the Executor after the Will is Probated in New York?
• What Taxes are Involved in Administering the New York Estate?

Larry

Lawrence J. Peck, Esq.
Founder of the Estate Planning New York Group
Manhattan, New York City

P.S. Click here for access to the 26 Most Common Estate Planning Mistakes.