Contact Us About the Trump Tax Plan: New York Residents Take Note!
Takeaways
- The One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025, significantly impacts estate and financial planning.
- The federal estate, gift, and generation-skipping transfer tax exemptions will rise to $15 million per individual starting in 2026. This reduces estate tax exposure for most Americans but doesn’t eliminate the need for comprehensive estate planning.While the OBBBA significantly impacts the federal estate tax, states like New York with their own estate or inheritance taxes are not bound by these federal changes. As a result, New Yorkers must continue to plan carefully to manage exposure to state-level estate taxes.
- Read our complete Advisory at the link HERE.
- Even though the Trump-backed OBBBA would permanently increase the federal estate tax exemption—raising it to $15 million per individual in 2026—New York State maintains its own estate tax system with a much lower exemption. As of 2025, the New York estate tax exemption is approximately $6.94 million per person, and unlike the federal system, New York does not offer “portability” between spouses.In addition, New York has a “cliff” provision: if your taxable estate exceeds the exemption by more than 5%, you lose the benefit of the exemption entirely, and estate tax is applied to the full estate value—not just the amount above the threshold.
The takeaway? While OBBBA may reduce or eliminate your federal estate tax burden, New York’s estate tax could still take a significant bite. That’s why advanced planning techniques—such as credit shelter trusts, gifting strategies, and charitable giving—are critical for high-net-worth New Yorkers.
Bottom line: Don’t let the higher federal exemption give a false sense of security. If you live in New York, it’s critical to plan with state-level taxes in mind, making it essential for you to review your estate plans, tax strategies, and long-term care arrangements with a trusted advisor.
With the right strategies in place, Pierro, Connor & Strauss can help you significantly lessen your tax burden and keep more of your hard-earned wealth working for you and your loved ones. Navigating the maze of state, federal, and city tax laws is no easy task, especially because these rules change often, reshaping how assets should be structured to stay protected. That’s where having the right team behind you makes all the difference.
At Pierro, Connor & Strauss, our NYC tax planning lawyers stay ahead of legislative changes and market trends to create strategies that are not just compliant but designed for long-term growth and security.
With smart planning today, you can minimize taxes, protect your assets, and build a financial future that gives you — and the people you care about — lasting peace of mind.
A City Where Tax Planning Is Essential
Tax planning is crucial in New York City, where high living costs are matched by some of the nation’s steepest taxes. Residents face federal, state, and city income taxes, plus unique levies like the unincorporated business tax.
Smart planning can help you minimize liabilities, maximize deductions, and avoid overpaying, making a big difference in a city where every dollar counts.
Avoiding the New York Estate Tax Cliff
New York’s estate tax system includes a “tax cliff,” and without careful planning, it can result in substantial tax liability.
Here’s what you need to know about the New York estate tax cliff:
- Unlike the federal system, New York’s estate tax doesn’t phase out gradually; it applies suddenly and completely.
- If your estate exceeds the exemption limit by just 5%, the entire value — not just the excess — becomes subject to state estate taxes.
- A small miscalculation could push your estate over the threshold, resulting in tens or even hundreds of thousands of dollars in unexpected taxes.
- Without planning, your heirs could lose a significant portion of their inheritance to state taxes, even if your estate only slightly exceeds the limit.
At Pierro, Connor & Strauss, we help clients plan strategically to avoid falling over the estate tax cliff.
Our experienced attorneys work with you to:
- Strategically manage asset thresholds through tailored estate planning techniques
- Use exemptions, trusts, and gifting strategies to reduce taxable estate value
- Protect your beneficiaries’ inheritances by minimizing unnecessary estate taxes
Careful planning today can preserve more of your wealth tomorrow and ensure your legacy stays intact.
