Personal Planning Strategies (March 2014)

Under Proposed changes to New York's Estate, Gift and Generation-Skipping Transfer Tax Rules, There Are Advantages to Making Gifts Before April 1, 2014

New Yorkers may have an unusual opportunity to make tax-favored gifts until April 1, 2014. New York Governor Andrew Cuomo has submitted a budget proposal which, if adopted, would significantly change the rules pertaining to the calculation of New York State's estate tax and the way lifetime gifts are treated. However, the proposal would not apply to gifts made prior to April 1, 2014.

Under the proposed law, all lifetime gifts would be added back into the estate of the donor for New York State estate tax purposes. The effect of this would be to increase the value of the donor's taxable estate at her death. Under the current law, which would apply to gifts completed before April 1, 2014, lifetime gifts are not subject to gift tax at the state level and are not part of the taxable New York estate. Aside