USA – NEW YORK Law and Practice Contributed by: John M Teitler, Nancy A Murphy and Constance E Shields, Teitler & Teitler LLP
10. Charitable Planning 10.1 Charitable Giving
million, and the assets that pass to the surviving part - ner will be taxed at such survivor’s death, resulting in double estate taxes when a couple is unmarried. While New York follows the federal rule that transfers at death to a surviving spouse of a married couple are not subject to estate tax, New York’s treatment of its basic estate tax exclusion amount differs drastically from the federal system and is beyond the scope of this article. The take away is that, in general, the New York exemption is effectively phased out for estates that currently exceed approximately USD7.717 mil - lion, meaning that for an unmarried couple, the entire estate is effectively subject to New York estate tax. The New York estate tax rate is graduated and rang - es from approximately 3% to 12%. While New York does not impose a gift tax on lifetime gifts, certain gifts made within three years prior to the decedent’s death may be added back to the gross estate. In New York, in general, claims between non-married couples based upon mere cohabitation or roman - tic relationship are relatively uncommon. New York claimants have pursued claims based upon a variety of theories, such as breach of contract, constructive trust, equitable accounting, partnership, and joint ven - ture. The risk of a successful claim can be reduced by entering into a written agreement memorialising financial consequences (if any) of the parties’ relation - ship/cohabitation. In contrast, in New York, absent an agreement oth - erwise (such as a pre-marital or post-marital agree - ment or spousal elective share waiver), the surviving spouse has the right to approximately one-third of the deceased spouses’ net estate (and if the deceased spouse dies without a will, the surviving spouse has the right to approximately 50% of the deceased spouse’s intestate estate).
The United States and New York provide a number of charitable giving opportunities, including tax incen - tives. They are complex and require careful considera - tion. Giving to qualified charities will usually reduce income and estate taxes, subject to certain limitations. 10.2 Common Charitable Structures Typically, US/NY lawyers use several charitable giv - ing techniques, including charitable lead trusts, donor- advised funds and private foundations. While creating a charitable structure may have income and estate tax benefits, often, there is a reduction in control and use of the assets.
811 CHAMBERS.COM
Powered by FlippingBook