The unprecedented impact of COVID-19 has led to an invigorated emphasis on estate planning for many New Yorkers. Faced with a stark reminder of mortality, clients are motivated to take advantage of low interest rates, diminished asset values and the current record-high federal gift, estate and GST tax exemption amounts, especially in light of the upcoming November 2020 election which may bring changes to the estate planning landscape with reduced federal exemption amounts, increased tax rates and elimination of the automatic step-up in basis.

The balance of 2020 will most certainly be a busy time for New York's estate planning attorneys. As such, it is an excellent time to review the current New York Estate Tax regime, with a renewed warning of the dreaded "cliff" and a discussion of how intelligent and flexible planning can help provide security, savings and sometimes even the elimination of the New York estate tax.

New York is in the minority of states that has its own estate tax regime, thereby forcing New Yorkers to think about New York estate tax liability in addition to possible federal estate tax liability. The New York estate tax is computed based on the tax table found on the New York State Estate Tax Return—Form ET-706, which sets forth an increasing rate of tax to be applied as the amount of the New York taxable estate increases. The top rate of 16% applies for New York taxable estates over $10,100,000, and amounts below that are subject to tax at the stated graduated rates, beginning at 3.06% for the first $500,000.