USA – NEW YORK Law and Practice Contributed by: John M. Teitler, Nancy A. Murphy and Constance E. Shields, Teitler & Teitler, LLP
7. Succession of Digital Assets 7.1 Legal Framework
include family limited partnerships and buy–sell agree- ments. 8.2 Legal and Tax Considerations Federal US laws heavily influence business succes- sion planning. However, New York has a separate estate tax with a lower exemption. Additionally, New York, unlike the federal rules, does not have a separate gift tax so certain planning options may make more sense during life. 9. Trusts, Foundations and Related Entities 9.1 Choice of Planning Vehicle There are various gift and estate planning techniques to ameliorate the impact of US and NY gift and estate tax. Some of the more common techniques include an insurance trust, grantor retained annuity trust, an intentionally defective grantor trust or spousal lifetime access trust. 9.2 Recent Developments Affecting Planning Vehicles The most significant recent change in planning oppor- tunities was the increased estate and gift tax exemp- tion of the One Big Beautiful Bill Act. The increased lifetime and testamentary gift and estate tax exemp- tion permits individuals to move significantly more assets to trusts or lower generational family members without tax. Another less known planning opportunity in the One Big Beautiful Bill Act is an increase in amount of tax deductive for state and local taxes (SALT). Previously, individuals were capped at USD10,000 but that has now been increased to USD40,000. This opens up planning opportunities for real estate with expensive property taxes by using multiple non-grantor trusts to own the real estate and allowing each trust to claim a separate SALT deduction of up to USD40,000. Plan- ners should be aware that this may be considered an aggressive planning strategy and may be subject to increased scrutiny by the IRS and state taxing authori- ties.
Due to the increasing problem of accessing digital assets after death, 45 US states have adopted the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA). The RUFADAA creates three tiers for determining how a fiduciary can access digital assets. 1. Online tools – many platforms such as Google and Facebook provide for an individual to grant access to their account after death by an election within the platform. If an individual has chosen an individual to have access, this choice will override all other legal documents, such as a will, trust or power of attorney. 2. Legal documents – for platforms without online tools, very detailed express wishes in a will, trust or power of attorney will permit access by a fiduciary. 3. Terms of Service – absent any online tool, or detailed and express wishes in estate planning documents, the provider’s Terms of Service will dictate access. 7.2 Planning Considerations For individuals with digital assets, it is important to discuss access and transferability in the event of incapacity and death. The creation of a digital assets inventory can be invaluable to a fiduciary and fam- ily members. Such an inventory should not only list assets, but access methods and storage locations. Password managers with secure sharing options for fiduciaries may also be considered. It may also be helpful to have specific digital asset information stored separately from standard estate planning documents which may become public or widely used.
8. Family Business Succession Planning 8.1 Succession Strategies
There are a number of techniques for family business- es that can assist the transfer of wealth to the next generation. One technique is the use of discounts for gift and estate tax planning. Generally, a professional valuation specialist must be engaged. Other options
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