New York Gift of Stock to Spouse for Life with Remainder to Children is a type of estate planning strategy that allows individuals to transfer ownership of stocks or shares to their spouse during their lifetime, while ensuring that their children will inherit the remaining stocks upon the spouse's death. This technique is commonly used to reduce estate taxes and provide financial security for both the spouse and children. In this arrangement, the donor, usually a parent, transfers the ownership of stocks to their spouse as a gift, with the understanding that the spouse will have full control and use of the stocks during their lifetime. This gift is referred to as a "gift of stock to spouse for life." The donor can specify the stocks or shares to be gifted and can include any income or dividend payouts associated with these stocks. The New York Gift of Stock to Spouse for Life with Remainder to Children is a popular option due to the state's inheritance tax laws. By transferring the stocks to the spouse, the donor takes advantage of the unlimited marital deduction, which allows unlimited tax-free transfers between spouses. This means that no federal or New York state estate tax is imposed at the time of the transfer. Upon the death of the spouse, the remaining stocks are then inherited by the children, as specified by the donor. This transfer is known as the "remainder to children." The children will receive the stocks at their fair market value at the time of the spouse's death, and any future appreciation or dividends will be taxed in their hands. It is important to note that there may be different variations or structures within the New York Gift of Stock to Spouse for Life with Remainder to Children, depending on the individual's specific estate planning goals and circumstances. These variations may include different types of assets or conditions placed on the transfer. Some individuals may also choose to incorporate trusts or other estate planning tools to further protect and manage the gifted stocks. By implementing the New York Gift of Stock to Spouse for Life with Remainder to Children, individuals can ensure financial security for their spouse while also providing for their children's future inheritance. This strategy maximizes tax benefits and allows for the smooth transfer of assets within the family, in accordance with the individuals' wishes. However, it is crucial to consult with a qualified estate planning attorney or financial advisor to ensure compliance with state laws and to tailor the strategy to individual needs and objectives.
New York Gift of Stock to Spouse for Life with Remainder to Children
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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.
A surviving spouse in a common law state has protection from complete disinheritance, however. Every common law state has different guidelines, but most common law states' inheritance law allows the surviving spouse to claim one-third of the deceased spouse's property.
Simply put, if you have a legally binding will when you pass away then the dictates of that document will determine what happens to your assets- so if you have listed your spouse as sole beneficiary, they will receive everything, or exactly how much you have given to them in the will.
A spousal lifetime access trust (SLAT) is an irrevocable trust where one spouse (the donor spouse) gifts assets to the other spouse (the beneficiary spouse) in a trust. The trust authorizes the trustee to make distributions to the beneficiary spouse if a need arises.
For a New York resident without a will, a surviving spouse inherits the entire probate estate if there are no children or other descendants. If there are descendants, the surviving spouse gets the first $50,000 and the balance is divided one-half to the spouse and one-half to the decedent's descendants.
New York law forbids residents from completely disinheriting a surviving spouse. If a person is legally married at the time of their death, their spouse will automatically inherit a percentage of their assetseven if the spouse has been intentionally excluded from the deceased person's will or trust.
As a spouse of a person who died in New York, you have fundamental property rights in their estate. If your spouse died without a will, you have the right to $50,000 or 1/2 of the estate if he had children, or the right to the entire inheritance if he did not.
A SLAT allows the donor spouse to transfer up to the donor spouse's available exemption amount without a gift tax. When the donor spouse dies, the value of the assets in the SLAT is excluded from the donor spouse's gross estate and are not subjected to the federal estate tax.
SLAT Tax Implications Therefore, the Grantor will pay the income taxes on income earned by the trust, thereby making an additional tax-free gift to the trust's remainder beneficiaries (see Revenue Ruling 2004-64).
Note that certain classes of Crummey powerholders will require additional planning, including: Spouses. Spouses, as trust beneficiaries, can hold Crummey powers.