Richard Yam, J.D.

This post will help you consider estate planning strategies in light of the current federal estate, gift and generation skipping transfer tax exemption, which in 2018 increased to $11.18M and has been indexed for inflation each year since then. However, the exemption amounts are scheduled to revert back to the pre-2018 exemptions (indexed for inflation) when the clock strikes midnight on January 1, 2026. Remind me what the numbers are. Below is a basic chart outlining the numbers (per person) i

The bad news is that there is a federal transfer tax on assets that you give away during life, at death, and to individuals two or more generations below you. The good news is that this transfer tax will only apply to the wealthiest Americans and, even so, there are strategies you can use to minimize or avoid its application. The federal estate, gift and GST tax only kicks in above a certain dollar threshold. Furthermore, there are additional wealth transfer strategies that do not trigger any t

While the large increase in the federal estate tax exemption has provided many with federal estate tax relief, New Yorkers must continue to plan for New York estate tax. For a quick review of the New York Estate Tax “Cliff” basics, see the “Understanding New York’s Estate Tax “Cliff” blog post. What is the current exemption from New York estate tax again? The current New York estate tax exemption amount is $6,940,000 in 2024 (up from $6,580,000 in 2023). Under current law, this number will rema

In 2014, dramatic changes were made to New York’s gift and estate tax law. For many clients, the subject of the New York estate tax “cliff” continues to remain a source of confusion. This is for good reason. The New York estate tax cliff is not easy to understand, nor is it easy to know how it may impact your particular situation. The answers below are intended to guide those who remain baffled by the New York estate tax cliff. Learn more about mitigating the New York estate tax cliff here. Doe

What is a Spousal Lifetime Access Trust (SLAT)? It is a trust that you (the grantor) set up for the benefit of your spouse and your descendants. You would make a gift to the SLAT, using some of your federal lifetime gift exemption (currently $13.61M in 2024) to shield that gift from gift tax. While you give up all your rights and control over the gifted assets, your spouse will have access to the gifted assets as beneficiary of the SLAT. When does it make sense to have a SLAT? You should consid

As summer ends and we look toward the Fall, you should aim to maximize your opportunities to transfer wealth to your children or grandchildren, accomplish your charitable goals, and engage in smart income tax planning. With that in mind, here is a checklist of five action items to consider before year-end. See an update on year end planning tips here. 1. Make Annual Exclusion gifts: The IRS gives you a gift tax annual exclusion each year, and in 2022, the annual exclusion is $16,000 per donee.

What is a Qualified Personal Residence Trust? A Qualified Personal Residence Trust (“QPRT”) is an irrevocable trust that holds either a Grantor’s personal residence or occasional residence for a certain term, then distributes the property to named beneficiaries at the end of the term. How does a QPRT work? Each person is entitled under the tax code and regulations to create a QPRT for a primary residence and an occasional residence. The Grantor makes a gift of his or her personal or occasional

What is an Incomplete Non-Grantor (ING) Trust? An ING trust is a trust you set up in which assets you transfer to it are not completed gifts for gift tax purposes, yet the trust is a separate taxpayer for income tax purposes. The primary purpose of ING trusts is to eliminate the state income tax owed on the assets in the trust. The ING trust must be carefully drafted so that grantor trust status is not inadvertently triggered, while also giving you, as grantor, enough powers over the trust so t

What is a Charitable Remainder Trust (CRT)? It is a trust where non-charitable beneficiaries (usually the grantor and grantor’s spouse) receive payments at least annually during their lives or for a number of years, and a charity receives the trust assets remaining at the end of the trust term. A charitable trust is also referred to as a “split interest trust”. This is because the beneficial interests in the trust are “split” between the initial non-charitable beneficiaries and the charitable