Most people would like to leave a legacy to their heirs, whether it's money, a business, or a personal heirloom. In fact, many New Yorkers may not realize that you don't even have to be a particular age to leave something for your spouse or children or if you wish to donate something to a special organization.
But the task many people are left with when it comes to estate planning is figuring out the best way they can leave their assets to their beneficiaries. And as most estate planning advisers and lawyers will remind their clients, you may need a will if you are planning to leave your wealth or personal property.
According to USA Today, an advantage for those who leave money in their will is that their heirs will not have to pay taxes on any appreciation that has accrued. For tax purposes, the beneficiary’s cost basis will be the value of the estate itself upon the decedent’s death.
Once the decedent’s debts have been paid, what is left of the assets becomes his or her estate, which is then subject to federal and state estate taxes. Other estate planning options New York residents can consider include:
- Setting up a testamentary trust, which is a trust that is created in your will and begins when you die. The assets remain as part of the person’s estate, so it’s still subject to estate taxes;
- Giving your children $13,000 this year, or $26,000 as a couple, if you want to leave them something while you are still alive without initiating any gift taxes. However, the recipient is subject to taxes if they receive shares of appreciated property, like stocks; and
- Creating a charitable gift trust or community foundation to donate to charity.
If you face a complicated or difficult estate planning decision, such as leaving a business to an heir, or just need guidance, consider seeking legal counsel from an experienced attorney.
- Contact A New York Estate Planning Attorney (FindLaw)
- How to Make a Will: FAQ (FindLaw)
- How To Talk About Family Money (FindLaw’s New York Estate Planning Law News Blog)
- GRATs: Passing Profits To Parents Without Gift Taxes (FindLaw’s New York Estate Planning Law News Blog)