What's happening
This bill amends estate law to presume that credit shelter bequests shield the maximum possible amount from both federal and New York state estate taxes unless otherwise specified.
Why it matters
Helps avoid unintended tax consequences. By presuming that credit shelter bequests shield the maximum amount from both federal and New York estate taxes, this bill helps ensure that estates are not accidentally exposed to higher state taxes due to ambiguous or outdated will or trust language.
Protects beneficiaries and testators from legal uncertainty. The new rule creates a uniform default interpretation for formula clauses, reducing the likelihood of family disputes or costly legal battles over the meaning of tax-related language in wills and trusts.
Offers flexibility for individual intent. While establishing a default rule, the bill preserves the ability for individuals to override this presumption if they explicitly state otherwise in estate planning documents, or for courts to review and interpret a decedent’s true intentions.
Responds to changes in tax law. This measure addresses the complexity created by differences between federal and state estate tax exemptions, particularly as these laws evolve, helping to future-proof estate plans and reduce the administrative burden on executors and heirs.
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Who cares
Headline styles
Shield Estates From Double Tax
Plain English, a few words. Used as the page title.
Sponsors
No co-sponsors yet.
History
- Referred to ways and means
- Reported referred to ways and means
- Referred to judiciary
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Shield More Inheritance from Taxes
In Senate Committee · Judiciary · Sponsor Brad Hoylman-Sigal
Full text
1 pageUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
3226
2019-2020 Regular Sessions
IN ASSEMBLY
January 29, 2019
Introduced by M. of A. DINOWITZ -- read once and referred to the Committee on Judiciary
AN ACT to amend the estates, powers and trusts law, in relation to providing a presumption that credit shelter bequests be construed to set aside the maximum amount that may be shielded from both federal and state estate taxes
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. The estates, powers and trusts law is amended by adding a new section 2-1.12-a to read as follows: § 2-1.12-a Application of formula clause
(a) If: (i) a decedent who is a resident of New York state dies after March thirty-first, two thousand nineteen; and
(ii) by reason of the death of such decedent, property passes or is acquired from such decedent under a will, a trust or a beneficiary designation which contains a formula providing, in sum or substance, for a bequest or other disposition of the maximum amount of property that can be sheltered from federal estate tax by reason of available credits against such tax; then, unless the governing instrument specifically provides otherwise by referring to this section, such formula shall be deemed to refer to the maximum amount of property, if any, that can be sheltered from both federal estate tax and New York state estate tax by reason of the applicable credit amount allowable against each of the federal estate tax liability and the New York state estate tax liability.
(b) Notwithstanding paragraph (a) of this section, nothing in this section shall be deemed to preclude a proceeding from being brought that seeks an order: (i) construing the decedent's intent concerning the effect of a formula bequest or other disposition contained in a will, trust or beneficiary designation, or
(ii) overriding the presumption set forth in subparagraph (ii) of paragraph (a) of this section.
§ 2. This act shall take effect immediately.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD01346-01-9
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.