Estate planning in New York: what you need to know

Summary 

What is the cost of estate planning in New York? 

Estate planning is a comprehensive legal process that involves drafting a will, planning trusts, and paying attorney administrative fees. 

Depending on the size and value of your estate, this can cost between $3,000 and $8,500.  

The cost of estate planning in New York, compared to other states, veers toward the more expensive end of the spectrum. Currently, the most expensive states to pay for estate planning are New York, Texas, and Florida, all of which have similar estate planning cost brackets.  

How does New York estate tax work? 

New York’s estate tax rate starts at 3.06% and goes all the way up to 16%. The wealthier and more diverse the estate is, the higher the tax rate will be.  

If your estate does not meet the current estate tax threshold, you will not be required to pay any estate tax. As of 2023, the New York estate tax threshold is $6.24 million. The threshold will increase every year in response to inflation.  

How does estate planning for blended families work in New York? 

Estate planning for blended families requires special considerations.  

Unlike biological children, stepchildren are not automatic heirs to their stepparent’s estate, so if you have stepchildren, you need to state their beneficiary status explicitly in your will.  

People who are estate planning for blended families can smooth the process and remove the potential for complications by utilizing trusts, gift inheritances, and regularly reviewing their beneficiary status.  

How does tax planning for single parents work in New York? 

Tax planning can feel daunting as a single parent, especially as you prepare for retirement and need to consider your children’s future seriously.  

Estate planning for single parents involves several important considerations, especially if your children are still minors and need a legal guardian. Guardianship, life insurance, wills, and trusts all come into play when managing estate tax.  

How does tax planning for married couples work in New York? 

​​In New York, money that goes to your spouse ​upon your death is not​ subject to estate tax​—​​this is known as the “marital deduction.” ​​ 

That makes being married a tax advantage for some estate owners living in New York.  

However,​ when the second spouse dies, the beneficiaries will be subject to estate tax if ​​the ​value surpass​es​ the New York estate tax threshold​.

One way to reduce your New York estate tax as a married couple is to create a trust fund equal to that of the estate tax exemption and expose it to the estate in the event of a spousal death, thus preventing the money from being taxed when the second spouse dies.  

How does probate work in New York? 

Probates are only necessary in New York if the estate is ​large​.  

If your estate is worth less than $30,000, it will only require a voluntary administration proceeding, which is much simpler and less paperwork-intensive.  

However, if your New York-based estate is worth more than $30,000, it will need a probate upon your passing. Failure to file a probate within 30 days can result in penalties for the executor.  

New York probate is one of the shortest in the country.  

What are the final arrangements and organ donation laws in New York? 

If you are a registered organ donor in New York, your wishes will be respected upon your passing. If you are under 18, your parents or next of kin will have the final say in your donation.  

Estate owners need only state their preference in a will regarding final wishes such as cremation, burial, and funeral plans. If there are no clear final wishes, the next of kin becomes responsible for the decision.  

Your estate planning checklist for New York 

There comes a time in everyone’s life when estate planning becomes essential. Here is our estate planning checklist for New York that every citizen should be aware of: 

Your last will and testament is the official document that outlines how you want your estate and assets to be distributed among heirs and beneficiaries. As per New York estate law, a last will and testament is critical for the smooth distribution of assets and taxes. 

Sufficient healthcare documentation further validates your estate plan and protects your interests in the last chapter of your life.  

A living will, also known as a health care directive, is a document that sets forth medical procedures or arrangements should you be incapacitated or otherwise unable to communicate your needs yourself.  

If you have an estate in New York that is worth more than $16.4 million, you may want to find a way to reduce your estate taxes — and that can be done with a trust of similar value set aside for your spouse or heirs after your passing.  

Having a power of attorney to help you manage and create a comprehensive estate plan can give you peace of mind. These attorneys will take over the responsibility of managing your affairs upon your passing. 

If you are someone’s legal guardian, you need to appoint a backup guardian in the event of your death. A pre-need guardian can provide this service and help your heirs make sound decisions about your New York estate.  

Get expert financial advice 

Estate planning in New York can be an expensive process. With its short probate period and high estate planning costs, the process of establishing your final will, in addition to your New York estate, can benefit from the help of a financial advisor.  

Get matched with a financial expert by Unbiased today to learn more about estate planning in New York and how to manage your financial future.