How does taxation affect New York probate actions?

New York – January 27, 2021

Federal and state taxes are important factors to consider when going through New York Surrogate Court probate actions, and should be discussed with an attorney in the estate planning process. A probate attorney can assist individuals to secure an estate’s value for beneficiaries, despite taxation requirements. The decedent and their estate are separate taxable entities. Before filing Form 1041, executors will need to obtain a tax ID number for the estate.

New York estate plans.

New York estate planning and probate attorneys are knowledgeable about estate documents and necessary actions to avoid steep taxation once probate actions begin. Closing out New York estates can be time-consuming, depending upon the nature of the assets left to distribute and events where named beneficiaries, or others will contest estate documents, including a will. Experienced probate lawyers are helpful with the smooth processing of tax documents and filing the appropriate returns with the state and federal governments.

Federal, estate, and gift tax return.

Executors, beneficiaries, and other interested parties to an estate may be required to file a federal income tax return, an estate tax return, and a gift tax return when an estate is valued at a certain amount of money. Parties responsible for the disposition of the estate must ensure adherence to New York State laws regarding taxes in the New York Surrogate Court. Individuals should consult with New York Estate Planning attorneys to protect themselves and shield their loved ones from additional expenses that could diminish the value of an estate to be distributed among beneficiaries.

Will administration.

Will administration does not occur unless there is a death to a person, at which point a probate attorney will do their best to effectively and expediently administer a will to shield an executor from frustrations surrounding timely payment of bills and costs related to the individual who died. Property tax bills must be paid in anticipation of estate property sales. Other examples of bills that should be addressed in an expedient manner include paying off creditors, burial costs, and property upkeep, along with professional fees for appraisal services regarding the value of estate assets.

Seek legal counsel.

There may also be times when a beneficiary, or other family member will dispute probate action based upon questions surrounding the taxes, whether they are local, state, or federal. Attorney Ron Meyers may be able to answer those concerns and guide individuals through probate action in New York Surrogate Court.

Ron L. Meyers & Associates, PLLC

Address: 475 Park Avenue South, Suite 2100

Manhattan, NY 10016

Phone: 212-644-8787

Sources:

https://www.irs.gov/businesses/small-businesses-self-employed/whats-new-estate-and-gift-tax

https://www.irs.gov/businesses/small-businesses-self-employed/deceased-taxpayers-filing-the-estate-income-tax-return-form-1041

https://www.nysenate.gov/legislation/laws/EPT