Article on Trusts & Estates

Steven Cunningham recently published an Article entitled, Trusts & Estates, 68 Syracuse L. Rev. 1063-1085 (2018). Provided below is an introduction of the Article.

This article covers notable regulatory, statutory, and case law developments related to trusts and estates for the Survey period of July 1, 2016 to June 30, 2017.

Part I of this Article discusses changes that occurred at the federal level. This discussion will summarize noteworthy administrative activity and case law from the United States Tax Court, including the proposed regulations under Internal Revenue Code § 2704 and the United States Tax Court decisions in Estate of Powell v. Commissioner and Estate of Heller v. Commissioner. Part II surveys the trust and estate developments specifically in New York, including new legislation, regulations, and case law.

As a threshold matter, it is worth noting the federal and New York exemption amounts applicable in the Survey period. At the federal level, the amount of combined gross assets and prior taxable gifts needed to trigger an estate tax rose from $5,450,000 in 2016 to $5,490,000 in 2017. The federal annual gift tax exclusion remained at $14,000 throughout the entire Survey period. The threshold for gifts to a noncitizen spouse not includable in a taxpayer’s gifts increased from $148,000 in 2016 to $149,000 in 2017. Meanwhile, New York continues to adhere to a schedule where equalization between the state exemption amount and the federal amount will begin on January 1, 2019. Accordingly, the basic exclusion amount in New York rose from $4,187,500 (for decedents who died on or after April 1, 2016 and on or before March 31, 2017) to $5,250,000 (for decedents who died on or after April 1, 2017 and on or before December 31, 2018).