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Estate Planning Changes in 2014 in the States We Serve: NC, TN, NY & FL

Posted on: January 10th, 2015
legislation changesOur estate planning lawyers serve four states, each with different legislation addressing probate, digital assets, tax laws, and more. The past year brought many changes for each state. Legislation changes should be reviewed during regular estate plan reviews, but if it has been awhile since an individual’s review – review the changes below and be ready to revise your estate and tax plans soon:

North Carolina Estate Planning

The major news in North Carolina in 2014 involved the legalization and recognition of same-sex marriages. The legalization of marriage for LGBT couples affords many rights to spouses, and this should prompt estate plan reviews for married same-sex couples. There may be tax return amendments to be filed, beneficiary designations to update, and more to ensure spouses are provided for.

A court ruling affecting Limited Liability Companies (LLCs) in North Carolina occurred during the first quarter of the year. LLCs are a popular business structure because of the protections they offer. However, the case involved the threatening a removal of an LLC member’s ownership rights until debts were satisfied. The ruling showed that under North Carolina law, a charging order against an LLC to collect debt cannot terminate an LLC member’s ownership. 

Tennessee Estate Planning
Increased creditor protections, added insurance on certain accounts, and other provisions went into law this year as part of amendments in the Tennessee Uniform Trust Code. Separately, the Tennessee state estate tax is slowly phasing out. The estate tax exemption rises to $5 million in 2015 and will be completely repealed in the 2016 tax year.

New York Estate Planning

Several laws significantly affecting estates went into law. The state estate tax exemption increased from $1 million to $2,062,500 for decedents who die on or after April 1, 2014. The exemption will continue to rise annually until it matches the federal exemption in 2019. A caveat for New York estates exists in the new legislation. Estates valued at or under the exemption will not pay a state estate tax. Estates that exceed 105% of the exemption will be taxed on the entire value of the estate – a significant “cliff” that has prompted many New Yorkers to restructure assets and update estate plans.

Taxable gifts made by New York residents on or after April 1, 2014 will be included as part of the gross estate. Individuals who own New York real estate and gift property on or this date must include the gifted real estate as part of their taxable estate.

New regulations concerning pets included in New York estate plans went into effect August 2, 2014. Pet cemeteries previously did not permit human remains from being interred on premises. Now, according to Wealth Management, “The regulation allows the cremated remains of pet owners to be buried with the remains of their pets, but only if the pet cemetery doesn’t promote that service, doesn’t receive a fee for that service and discloses to the consumer that a pet cemetery doesn’t afford all the protections that a human cemetery affords to human remains.”

Trust income tax rules also changed for out-of-state trusts created by New York residents. Income earned after January 1, 2014 from non-grantor trusts set up by New York resident grantors will be taxed when distributions are made to New York resident beneficiaries. (The tax is not applicable to distributions of accumulated income to New York beneficiaries made before June 1, 2014.)

Florida Estate Planning

In November 2014, Florida lawmakers submitted a bill that will provide legislation specific to digital asset management for decedents and those who become incompetent. Several states have started passing laws concerning digital estate planning, including North Carolina and New York. If passed into law, digital assets in Florida will be managed under the new legislation starting July 1, 2015.

As of January 6, 2015 same-sex marriages in Florida are now legal. This affords spousal rights to spouses in LGBT marriages across the state. Major life events like marriage should trigger an estate plan review, discussion of prenuptial agreements, and beneficiary designation updates.
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