New York is one of 12 states, along with the District of Columbia, that tax the estates of decedents who were residents or who owned property located within its borders. Aside from this, there are many other factors that go into how the state handles inheritances, beginning with whether or not you have a valid will. If you’re looking for professional guidance on estate planning, SmartAsset’s free matching tool can pair you with up to three financial advisors who serve your area.
Does New York Have an Inheritance Tax or Estate Tax?
While New York doesn’t charge an inheritance tax, it does include an estate tax in its laws. The state has set a $6.94 million estate tax exemption for 2024 (up from $6.58 million in 2023), meaning if the decedent’s estate exceeds that amount, the estate is required to file a New York estate tax return. The state government requires that these be filed within nine months of the deceased’s death, though extensions are available. The highest tax rate you could possibly pay is 16%.
It’s necessary to file a New York estate tax return if the estate’s total value exceeds the exemption listed above, according to New York inheritance laws. But for those who simply own property in New York but aren’t residents, only the value of their property in New York is included in this law.
Other Necessary Tax Filings
The New York estate tax is in addition to the federal estate tax, which calls for individual estates worth more than $13.61 million in 2024 between gross assets and prior taxable gifts to pay within nine months of the individual’s death.
Only the value of the estate greater than the above exemption is eligible for the federal estate tax. An automatic six-month extension will be automatically granted for this should you ask for it prior to the due date.
The federal and New York state governments also require a final individual state and a final individual federal income tax return to be filed by tax day of the year following the individual’s death. There is a federal estate/trust income tax return that needs to be taken care of as well. For this, make sure you file by April 15 of the year following the individual’s death.
The IRS demands that an estate has its own employer identification number (EIN) to represent itself in any tax-related matters. To apply for an EIN, visit the IRS website or apply by fax or mail.
How Estate Property Is Categorized in New York Inheritance Law
Property in New York is divided into two simple groups: personal property and real property. Included in real property are things like houses and land or, more broadly, real estate. On the other hand, personal property is just about everything else, such as cars, jewelry, furniture, cash, investments and family heirlooms.
New York is not a community property state. This means that a spouse won’t automatically receive most or all of the decedent’s property following his or her death, according to New York inheritance laws.
Dying With a Will in New York
For decedents who die with a will in New York, matters are pretty uncomplicated, with most wills being executed exactly as the decedent specified they should be. Just how this situation will be handled, though, is completely dependent upon the value of the estate and other factors. In every case where there’s a will and real property in the estate, the estate must be submitted to the court for probate.
The probate process in New York begins with a judge reviewing the will of the deceased, ensuring that it’s accurate and has all the information necessary for it to be considered valid. Be sure you signed your will in front of two witnesses, and that they sign as well. Following this, the executor listed on the will is formally named, and he or she begins distributing the property listed on the will to the intended beneficiaries. This person is also responsible for settling any liabilities that the estate may still have pending, according to New York inheritance laws.
When you file for probate, be sure to include a copy of the will, the death certificate, the probate petition and any other relevant documentation. Some counties may allow you to file online, though it’s recommended that you seek the assistance of a lawyer.
However, if there is a will, but the value of the decedent’s personal property is less than $30,000 and he or she either owned real property jointly or not at all, then you should file a small estate proceeding, according to New York inheritance laws.
Dying Without a Will in New York
An administration proceeding is the most common legal event that occurs in New York if you die without a valid will, but with real property to your name. But if when you pass away you don’t have a will, your estate consists of either jointly-owned or no real property, and your personal property is worth less than $50,000, you must file as a small estate, according to New York inheritance laws.
Furthermore, if you die without a valid will, you’re titled as intestate by New York, and the state’s intestate succession laws govern the distribution of your property. This could mean a number of different relatives could end up in possession of your property. The only possible exception to this rule is if the decedent’s estate is solely made up of real property, in which case the land will simply go to the nearest heir without the process of administration taking place.
As opposed to a probate court appointing a prespecified executor when there’s a will, proceedings without a will result in a judge choosing an executor or personal representative. This executor holds the same duty to handle the estate, only intestate law, not a will, dictates the way the estate is divvied up.
Spouses in New York Inheritance Law
New York utilizes a spousal right of election when deciding on inheritances for spouses. This law states that should a spouse pass away, his or her spouse will receive an “elective share” of $50,000 or one-third of the decedent’s estate. Should a spouse not receive this elective share, he or she has the right to file for it as long as it’s within a six-month window after an executor for the estate has been named, according to New York inheritance laws.
If you and your spouse have no biological or adopted children together, and you have no children outside this marriage, then your spouse will receive all of your property. But if there are biological or adopted children involved, things change a bit. Under New York intestate succession law, your spouse will receive up to the first $50,000 of your estate, plus half of the balance. Your children will receive the rest evenly.
New York entitles surviving spouses of decedents who have disinherited them to a piece of their estate. This, however, is limited when it comes to non-probate assets, such as property held in joint tenancy or a jointly held brokerage account paid on death to beneficiaries, as they cannot be completely taken.
Children in New York Inheritance Law
According to New York intestate succession law, biological children of the decedent are given full-fledged inheritance rights to their parent’s estate. This also applies to illegitimate, or non-marital, children of the deceased, provided that biological paternity can be scientifically proven, according to New York inheritance laws.
Adopted children, because they are considered, the same as biological children in New York, possess full intestate inheritance rights. However, these same rights do not automatically apply to foster children and stepchildren if the deceased never adopted them.
According to New York inheritance laws, if you die before the birth of a child you conceived prior to your death, that child will still hold typical biological children’s intestate rights to your estate.
Specific intestate inheritance rights for the eligible children listed above vary depending on who survives the decedent as well. New York will give all property to your children if you’re unmarried or your spouse predeceases you. But if a spouse survives you, your children will only receive the balance of your estate after your spouse has received $50,000 plus half of the leftover estate balance.
Intestate Succession: Spouses & Children
|Who Inherits Your Property
|– If spouse, but no children
|– Entire estate to a spouse
|– If spouse and children
|– $50,000 of estate and half of the balance to the spouse
– Rest of estate to children evenly
|– If children, but no spouse
|– Entire estate to children evenly
Grandchildren’s Inheritance Rights in New York
The only situation in which New York will afford your grandchildren any property rights via intestate succession is if your child (your grandchild’s parent) died before you. Otherwise, if your child is alive at the time of your death, he or she will be given inheritance rights, not your grandchild. Of course, you can avoid any complications by naming your grandchildren as heirs to the specific property in your will, if you so desire.
Unmarried Individuals Without Children in New York Inheritance Law
The property in your estate will go to your parents if you die without a surviving spouse or surviving children. But if your parents predecease you, then your siblings will split your estate evenly, according to New York inheritance laws.
Should all of the heir possibilities above not survive you, your estate will go to either one or more of your surviving grandparents, split evenly between your paternal and maternal sides. But if none of your grandparents survive you, your estate falls into the control of your aunts and uncles, with it again being split evenly between your paternal and maternal sides. Should only one side end up having heirs that survive you, the entire estate will go to them in both situations.
As a last possibility, your nieces and nephews will receive your estate. This will again be divided between each side, half and half, with the entire estate going to one side if there are no surviving nieces and nephews on the other.
Intestate Succession: Extended Family
|Who Inherits Your Property
|– If parents, but no spouse or children
|– Entire estate to parents
|– If no parents
|– Entire estate to siblings
|– If no siblings
|– Estate split evenly between paternal/maternal grandparents
|– If no grandparents
|– Estate split evenly between paternal/maternal aunts and uncles
|– If no aunts and uncles
|– Estate split evenly between nieces and nephews
If New York courts review every possible heir option and there is no one alive or available to receive your property, the state will obtain ownership rights to your estate. This is due to New York’s abandoned property law.
Non-Probate New York Inheritances
A non-probate asset in New York is a property that has its ownership transferred not via intestate succession laws or even a valid will, but instead through a beneficiary designation. The state includes in this group joint bank accounts, life insurance policies, retirement accounts and benefits, “in trust for” bank accounts, real property held by joint tenants and property held in a trust.
All of these accounts and pieces of property require you to name rights of survivorship or a beneficiary, so there’s no chance that the property will go to anyone other than the named individual or group, as long as the person is still alive. However, you can name your estate as a beneficiary, which would subject its inheritance to either your will or intestate succession.
Other Situations in New York Inheritance Law
Deathbed marriages are a growing trend in the U.S. They involve a caretaker or another opportunistic person marrying a decedent just before he or she dies solely for the purpose of gaining spousal rights to the inheritance.
New York offers family members the ability to annul the marriage if they can prove to the courts that the individual marrying their relative is doing so particularly for the purpose of fraudulent financial gain. Unlike some other similar laws, New York allows these proceedings to be completed even following the death of a decedent.
Resources for Estate Planning
- A financial advisor can help you build a comprehensive estate plan that accounts for your state’s inheritance laws. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can have free introductory calls with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
- Managing your own estate, or handling the intricacies of inheriting money from the estate of a loved one who has passed away, includes many complex factors to consider. It can be such an overwhelming venture — with taxes to file, possible court proceedings to go through and more — that you might want some help, especially in understanding New York inheritance laws.
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