USA – NEW YORK Law and Practice Contributed by: John M Teitler, Nancy A Murphy, Constance E Shields and Von Sanborn, Teitler & Teitler LLP
ensure their governance views for the coming genera - tions. 2.2 International Planning There is an increasing trend for multi-national fami - lies to obtain US/NY tax advice as well as advice in other non-US jurisdictions. Importantly, such advice is often inconsistent and requires lead tax counsel to co- ordinate tax advisors across a number of countries. 2.3 Forced Heirship Laws In New York, while there are no explicit forced heirship laws, a decedent who is married at the time of death cannot disinherit their surviving spouse unless there is a prior agreement to do so. If a decedent dies with a will, the surviving spouse has an elective share to receive one-third of the deceased spouse’s net estate (generally, gross estate less debts and administra - tion expenses). The surviving spouse has the right to assert the spouse’s elective share, in lieu of taking under the deceased spouse’s will. The elective share is an outright pecuniary amount, and various testa - mentary substitutes passing outright to the surviving spouse, such as property held with rights of survi - vorship, count towards satisfying the elective share. Importantly, if a spouse asserts the elective share, such spouse does not take under the decedent’s will. If a decedent dies without a will and is married with - out children, 100% of the decedent’s probate estate passes by intestacy law to the surviving spouse. If a decedent dies without a will and with children, 50% of the decedent’s probate estate passes to the surviving spouse by intestacy, and the other 50% of the pro - bate estate passes by intestacy law to the decedent’s children. By an acknowledged agreement of both parties, New York permits a waiver of estate and inheritance rights. It is common in New York for parties to enter into pre- nuptial or post-nuptial agreements to modify or waive a party’s estate and inheritance rights. 2.4 Marital Property New York is an equitable distribution state and equita - bly distributes marital property in the event of divorce. In general, marital property is property acquired dur - ing marriage and prior to the filing of divorce that is
not “separate property.” In general, separate prop - erty is property owned prior to marriage and property acquired by a party during marriage by inheritance, a gift from third parties or distribution from a trust. There is extensive guidance under New York law regarding marital property and separate property, and the active The transfer of property during life by gift has a carry- over basis. Generally, at death, there is a step up in basis to the value of the property at the date of the decedent’s death. 2.6 Transfer of Assets: Vehicle and Planning Mechanisms There are various gift and estate planning techniques to ameliorate the impact of the US and NY gift and estate tax. Some of the more common techniques include: • an insurance trust; • a grantor retained annuity trust; • an intentionally defective grantor trust; or • a spousal lifetime access trust. 2.7 Transfer of Assets: Digital Assets and passive nature of each. 2.5 Transfer of Property Under US/NY law, digital assets are considered a property right. Accordingly, they pass as part of a decedent’s estate. However, some providers have restrictions on the transferability or access of accounts at death, so it may be necessary to contact various providers if an individual wishes to ensure rights after death. 3. Trusts, Foundations and Similar Entities 3.1 Types of Trusts, Foundations or Similar Entities New York and most other states recognise revoca - ble and irrevocable trusts, foundations and charitable organisations. There are also trust distinctions for tax purposes, such as grantor and non-grantor trusts. There are certain states, such as New Hampshire, Nevada, South Dakota, and Wyoming, that permit the creation of private trust companies to administer fam -
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