NY A09857 | 2009-2010 | General Assembly
Status
Completed Legislative Action
Spectrum: Moderate Partisan Bill (Democrat 6-1)
Status: Passed on August 13 2010 - 100% progression
Action: 2010-08-13 - signed chap.349
Text: Latest bill text (Amended) [HTML]
Spectrum: Moderate Partisan Bill (Democrat 6-1)
Status: Passed on August 13 2010 - 100% progression
Action: 2010-08-13 - signed chap.349
Text: Latest bill text (Amended) [HTML]
Summary
Under the Internal Revenue Code now in effect, the Federal estate tax is repealed for decedents dying in 2010, only to be restored in 2011 at higher rates and with lower exemptions. Most estate attorneys expected Congress to enact a new law prior to 2010 so as to prevent the estate tax from expiring and did not anticipate that tempo- rary repeal would occur. There is still a possibility that Congress may reinstate an estate tax for 2010 retroactively. Many wills, trusts and beneficiary forms prepared prior to 2010 were based on formula dispositions in the case of married testators. The aim was typically to leave as much as possible on the first spouse's death to a trust or to individuals other than the surviving spouse (typically issue of the decedent) without causing estate tax on the first spouse's death. This was commonly referred to as a "credit shelter bequest", since the amount involved ($3.5 million for decedent dying in 2009) would be sheltered from estate tax on the first death by a "unified credit" allowed under the Internal Revenue Code. The credit shelter bequest is not subject to estate tax at the surviving spouse's death. The credit shelter bequest is usually phrased in terms of the maximum amount that can pass free of Federal estate tax on the first death, or in terms of like effect. The same results were obtained with formulas leaving a spouse outright or in a form qualifying for a marital deduction against the Federal estate tax, the minimum amount necessary to avoid imposition of an estate tax on the first spouse's death. With repeal of the estate tax, these formula clauses could be interpreted to leave the entire estate in a credit shelter disposition and nothing to the spouse or in a form qualifying for a marital deduction. This conclu- sion is reached since the entire estate and not just the part formerly sheltered by statutory credits can now pass under a credit shelter disposition without there being any estate tax. The Federal generation-skipping transfer tax is also temporarily repealed for transfers in 2010. Many wills and testamentary instruments also left to grandchildren (or to trusts that would eventually pass to grandchildren) maximum amounts allowable without imposition of a Federal generation skipping transfer tax. With repeal, this amount is now unlim- ited, and may pass to grandchildren to the detriment of the decedent's children. The purposes of the bill, accordingly, are: 1. To preserve the form in which most testators expected their estates to be divided prior to the unexpected repeal of the Federal estate tax; 2. To assure that a surviving spouse will not be disinherited and left to exercise a right of election under Article 5 of the Estates, Powers and Trusts Law; 3. To shelter assets in a credit shelter disposition for the time estate tax may be reinstated; 4, To prevent unwarranted amounts from passing to grandchildren to the detriment of children.
Title
Provides for the interpretation of trust and will clauses relating to federal estate taxes and generation-skipping transfer taxes when the decedent dies during 2010.
Sponsors
| Asm. Ann-Margaret Carrozza [D] | Asm. Hakeem Jeffries [D] | Asm. Charles Lavine [D] | Asm. Thomas McKevitt [R] |
| Asm. Matthew Titone [D] | Asm. Helene Weinstein [D] | Asm. Mark Weprin [D] |
Roll Calls
2010-06-24 - Senate - Senate Floor Vote - Final Passage (Y: 61 N: 0 NV: 1 Abs: 0) [PASS]
2010-06-15 - Assembly - Assembly Floor Vote - Final Passage (Y: 145 N: 0 NV: 4 Abs: 0) [PASS]
2010-06-15 - Assembly - Assembly Floor Vote - Final Passage (Y: 145 N: 0 NV: 4 Abs: 0) [PASS]
History
| Date | Chamber | Action |
|---|---|---|
| 2010-08-13 | signed chap.349 | |
| 2010-08-03 | delivered to governor | |
| 2010-06-24 | RETURNED TO ASSEMBLY | |
| 2010-06-24 | PASSED SENATE | |
| 2010-06-24 | 3RD READING CAL.1155 | |
| 2010-06-24 | SUBSTITUTED FOR S8056 | |
| 2010-06-15 | REFERRED TO RULES | |
| 2010-06-15 | delivered to senate | |
| 2010-06-15 | passed assembly | |
| 2010-05-13 | advanced to third reading cal.862 | |
| 2010-05-10 | reported | |
| 2010-05-04 | reported referred to ways and means | |
| 2010-04-27 | print number 9857c | |
| 2010-04-27 | amend and recommit to judiciary | |
| 2010-04-26 | print number 9857b | |
| 2010-04-26 | amend (t) and recommit to judiciary | |
| 2010-03-25 | print number 9857a | |
| 2010-03-25 | amend and recommit to judiciary | |
| 2010-02-03 | referred to judiciary |
Same As/Similar To
S08056 (Same As) 2010-06-24 - SUBSTITUTED BY A9857C
