Estate plans are beneficial for anyone, but often especially those with valuable resources. High-value estates can trigger fraudulent claims or conflict among beneficiaries. They can also be at risk of significant reductions in value caused by estate taxes. Proper planning well in advance is the only way to avoid or minimize estate tax liability.
When do adults in New York need to create an estate plan that specifically addresses their potential estate tax liability?
When their resources exceed the exemption amount
In 2026, the exemption amount for state estate taxes is $7,350,000. The greater the value of the estate, the higher the tax rate that applies. New York state estate tax rates range from 3.06% to 16%.
The federal estate tax exemption limit is more than twice the state limit. In 2026, individuals can exempt up to $15 million in estate value before federal estate taxes apply. As is the case at the state level, the tax rate is progressive and increases with the value of the estate. The rate could be anywhere from 18% to 40%.
Strategies for limiting estate tax can range from strategic gifts and co-ownership of critical assets to the establishment of a trust. Testators concerned about taxes generally need to reduce how much property may become part of their estates after they pass.
Exemption amounts change annually, making regular reviews of estate plans beneficial for those with business holdings, real estate and other valuable resources in their names. Partnering with estate planning lawyers who are familiar with not just basic documents but also estate tax planning can help people preserve as much as possible for their intended beneficiaries after they pass.