Tatia D. Barnes, Esq.
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Tatia D. Barnes, Esq.

Serving Your Probate, Administration and Estate Planning Needs

Estate Tax – Will Your Estate Have to Pay?

11/1/2010

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Only estates larger than $3.5 million owe federal estate taxes. Most estates won't owe federal estate tax. This is because several tax law exemptions and deductions allow you to leave substantial amounts of property free of estate taxes. The most important of these are:

  • The personal estate tax exemption. The personal exemption allows a set dollar amount of property to pass tax free, no matter who inherits it. For deaths in 2009, the personal exemption is $3.5 million. So if your estate is worth less than $3.5 million, it won't owe estate taxes when you die. If your estate is worth more than $3.5 million, your estate will owe taxes unless other exemptions or deductions apply. If you have made taxable gifts during your life, the amount of the personal exemption will be reduced. (For more about gift taxes, read Estate and Gift Tax FAQ.  Although the estate tax exemption changed significantly in the last decade -  rising from less than a million in 2001 to $3.5 million in 2009 - it is likely to remain at the current level for at least the near future.
  • The marital deduction. This deduction exempts from estate tax all property left to a surviving spouse. (I.R.C. § 2056(a).) The marital deduction is not allowed for property left to noncitizen spouses. But the personal estate tax exemption can be used for property left to noncitizen spouses.
  • The charitable deduction. The charitable deduction exempts all property left to a tax-exempt charity. (I.R.C. § 2055(a).)
In addition, there are several smaller exemptions including exemptions for funeral expenses, probate fees, any claims against the estate, and a portion of any estate tax paid to states or foreign countries.

There are a few estate planning tools you can use to reduce your estate tax liability.  See Reduce Estate Tax by Making Gifts and Tax-Saving Trusts. However, if your estate is large enough to trigger federal estate taxes, it would be wise to get some advice from an experienced estate planning lawyer who can help you sort through your options.



Even if your estate isn't big enough to owe federal estate tax, the state may still take a bite. Many states collect either their own estate or inheritance taxes. If you live in one of those states, there's not much you can do to avoid paying those taxes, save moving to another state. For each state's rules, see The Executor's Guide: Settling a Loved One's Estate or Trust, by Mary Randolph (Nolo).

For More Information For more information, see Nolo's Estate Tax Resource Center and  Plan Your Estate, by attorney Denis Clifford (Nolo).

© 2010 Nolo
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TATIA D. BARNES, ESQ.
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New York, New York 10005
​(212) 537-4069
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  • Home
  • Probate
  • Estate Administration
    • Estate Administration List For Clients
  • Estate Litigation
    • Surrogate Court Citations
    • Estate Discovery and Witnesses
  • Estate Planning
    • Power Of Attorney
    • Living Will - Health Care Proxy
    • Wills
    • Trusts
    • Estate Planning List For Clients
  • Planning For Elder Care Issues
  • Long Term Care Planning
  • Special Needs Planning
  • Contact
  • About
    • Blog
    • Fees
    • Philosophy
    • Disclaimer
  • Client's Rights
  • Helpful Estate Terms
  • Resources
    • New York Dead Man's Statute - CPLR 4519
    • EPTL 3-3.5 Conditions Qualifying Dispositions - Conditions against contest
    • EPTL 4-1.1 INTESTATE SUCCESSION
    • EPTL 5-1.1 A - Right of Election By Surviving Spouse
    • EPTL 5-1.2 - Disqualification as surviving spouse
    • EPTL § 5-3.1 Exemption for benefit of family
    • EPTL 7-1.12 Supplemental Needs Trusts
    • EPTL § 10-6.6 Exercise of a Power of Appointment
    • MHL 81.36 Discharge or Modification of Powers of Guardian
    • NY General Obligations Law 5-1513 Power of Attorney statutory short form
    • NY Mental Health & Hygiene Law 81.02 Power to appoint a Guardian
    • SCPA § 207. Lifetime trusts; jurisdiction and venue
    • SCPA 302 - Pleadings
    • SCPA 406 Reference to Hear and Report
    • SCPA 306 Citation
    • SCPA 407 Assignment of Counsel For Indigent Persons
    • SCPA 503 Proceedings Upon Jury Trial
    • SCPA 507 Testimony of Witnesses
    • SCPA 707 Eligibility to Receive Letters
    • SCPA 711 Suspension, modification or revocation of letters or removal for disqualification or misconduct
    • SCPA 719 In what cases letters may be suspended, modified or revoked, or a lifetime trustee removed or his powers suspended or modified, without process
    • SCPA 1301 Definition of a small estate
    • SCPA 1403- Persons to Be Served - Content of Process
    • SCPA § 1404 - Witnesses to be Examined; proof required
    • SCPA § 1501 Application Of Act To Trust
    • SCPA § 1502 Appointment Of Trustee
    • SCPA § 1505 Proceedings When Testamentary Trustee Is Also Executor or Administrator
    • SCPA 1602 - Ancillary Probate Based on Domicilary Probate
    • SCPA 1604 - Ancillary letters on foreign will
    • SCPA 1607 Ancillary Letters of Administration
    • SCPA 1609 - Petition for Ancillary Letters
    • SCPA 1811 Payment of Debts and Funeral Expenses
    • SCPA 1802 Effect of failure to present claim
    • SCPA 2003 Opening Safe Deposit Box
    • SCPA 2102 Proceedings For Relief Against A Fiduciary
    • SCPA 2204 Judicial settlement where recovery has been had in negligence action
    • SCPA 2205 Compulsory account and related relief on a court's own initiative or on petition who may petition
    • SCPA 2206 Compulsory Account and Related Relief; Proceedings Thereupon
    • SCPA 2208 Voluntary Account; who may petition
    • SCPA 2210 Voluntary Account - Process
    • SCPA 2225 - Kinship Proceedings
    • SCPA 2307 Commissions of Fiduciaries Other Than Trustees
    • Estate Tax Return - New York Tax Law 941
    • Tax Law 971-a
    • Tax Law 972
    • 26 USC § 2042
    • Unified Credit Against Estate Tax 26 USC 2010
    • 26 CFR 1.401(a)(9)-3 - Death before required beginning date
    • 26 CFR 1.401(a)(9)-4 - Determination of the designated beneficiary
    • Petition For Review of a Deficiency - Tax law 998
    • Abatement
    • Accounting Proceedings
    • Ademption
    • Administrator
    • Administration
    • Anticontest clause
    • Ancillary Proceedings
    • Article 17a Guardianship
    • Article 81 Guardianship
    • Asset
    • Attorney-in-fact
    • Beneficiaries
    • Bequest
    • Bond
    • Bypass Trust
    • Capacity
    • Citation
    • Codicil
    • Contest
    • Contingent Beneficiary
    • Dead Man's Statute
    • Debts of a Decedent
    • Decedent
    • Devise
    • Disinherit a Beneficiary
    • Disinheritance Clause
    • Distributee
    • Elective Share
    • Estate
    • Estate Litigation
    • Executor
    • Family Exemption
    • Fiduciary
    • Final income tax return
    • Gift
    • Grantor
    • Guardian
    • Heir
    • Insolvent Estates
    • Intestate
    • In terrorem clause
    • Joint Tenancy With Right of Survivorship
    • Kinship Hearing
    • Legacy
    • Life Planning
    • Legatee
    • Movant
    • Objections
    • Order to show cause
    • Person
    • Personal representative
    • Per Stirpes
    • Post-Deceased Distributee
    • Pre-Deceased Distributee
    • Priority of Paying Claims Against An Estate
    • Probate
    • Property
    • Residuary Estate
    • Small Estates And NY Surrogate's Court
    • Tenants in common
    • Termination of Decedent Lease
    • Testamentary Trust
    • Testator - Testatrix
    • Unclaimed Assets
    • What is a Will
    • Witness >
      • NAACP v New York
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