NY Estate Taxes

Aug 14, 2011 2 Replies
D

My elderly parents took out an insurance policy maybe 20 years ago. That policy will pay ~$100 K, to each of five siblings - after both Mom and Dad have died. My mother is deceased, I do not exect Dad to live another year?



My father may have another $550 -> 600K in assets - consisting of a house, CD's, several mutual funds and two annuity's. All of those assests were titled to transfer (sorry I do not know the specific terminology) equally to the 5 siblings, upon Dad's death.



I am unaware of NY Estate taxes! (I am confident that NO IRS estate taxes will be due). With the above assets, will there be any NY State Estate taxes due?



NOTE: The lawyer whom my folks had draw up their will is recently deceased. I have not yet had any contact with the lawyer whom now "has my parent's file".


-don


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K

The New York estate tax applies to any estate with a value for federal estate tax purposes of more than $1 million. Life insurance proceeds are includable in the estate if the estate is the beneficiary, if the decedent had any incidents of ownership in the policy -- such as the power to change beneficiaries, to borrow against the value of the policy, to surrender or cancel the policy, etc., or if the decedent had a reversionary interest in the policy. (IRC Sec. 2042; Reg. Sec.

20.2042-1(c)(2). NY defines the taxable estate in accordance with the federal estate tax law.)

Joint tenancy property is includable except to the extent that other tenants have a cost basis in the property.

Whether your dad's estate will be subject to NY estate tax depends on a lot of detailed facts. His attorney will have access to the information and can advise you.

Katie in San Diego

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R

What is "if the decedent had a reversionary interest in the policy"?

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