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Lawrence Scherer, Esq., CPA, LL.M. Taxation
Estate Planning Technique of the Month: Avoiding the New York State Estate Tax Cliff
New York is one of the few states that imposes its own estate tax. The tax is progressive, reaching up to 16% on estates around $10 million. However, unlike the federal system, New York does not offer a credit-based exemption. Instead, there’s a hard threshold at $7,160,000 (2025).
- If your estate is below the threshold—say, $7,100,000—no estate tax is due.
- If it’s just over, such as $7,200,000, the entire amount becomes taxable, not just the excess. This is referred to as the estate tax cliff.
To mitigate this, planners often use charitable giving. If the estate falls between 100% and 105% of the threshold, a strategic charitable gift can lower the estate’s taxable value just enough to fall back below the threshold, effectively saving heirs a substantial amount.
Drafting Tip: The charitable gift provision should be clearly defined in the tax apportionment clause, stating that the gift is made only if it maximizes the net inheritance for the beneficiaries.
Dog Bite Law and Proposed Reforms in New York State
New York follows a mixed liability model for dog attacks:
- The “one-bite rule” means an owner is only liable for a first bite if they knew or should have known about the dog’s aggressive tendencies.
- The state also recognizes negligence liability, meaning dog owners must take reasonable precautions even without a prior bite history.
If a dog causes injury to a human, the owner may face:
- Statutory fines
- Civil damages
- Criminal charges
- Possible euthanasia of the dog in extreme cases
However, when a dog attacks another dog, it’s treated as property damage, not a criminal matter—unless the owner participated in the attack.
Legislative Update: Assemblymember Linda Rosenthal introduced a bill to reclassify pets as sentient beings, which would allow criminal charges against negligent owners whose dogs injure or kill another.
New York State Assembly Passes “Death With Dignity Act”
On April 29, 2025, the NY State Assembly passed Assembly Bill 136, also known as the Death With Dignity Act. If enacted, NY would become the 11th U.S. jurisdiction to allow Medical Aid in Dying (MAID) for terminally ill patients (with less than 6 months to live).
Key Provisions:
- Two separate physician confirmations
- Mental health evaluation
- Right to withdraw at any time
- Self-administration only (no assisted injections)
While federally funded Medicare does not cover MAID, the bill would allow state-managed Medicaid coverage for the service. The bill is currently in the Senate Health Committee for review.
New Property Condition Disclosure Statement (PCDS) Form Effective July 1, 2025
The revised PCDS form will be mandatory starting July 1, 2025. One key change includes new instructions directing sellers to Department of Health resources on septic system maintenance and operation.
EPA to Remove Credits for Engine Stop-Start Technology
The EPA is preparing to eliminate “off-cycle credits” for the engine stop-start feature, a gas-saving function that turns off the engine at stops. Previously, automakers received a mileage credit for defaulting this feature to “ON.”
EPA Head Lee Zeldin acknowledged that consumers widely dislike the feature, and its incentive is likely to be removed to discourage automaker reliance on it for mileage ratings.
Business Succession and Estate Planning: Why Valuation Matters
Phil Kanyuk, CPA/CFF/ABV, ASA, emphasizes the critical role of business valuation in estate planning. Whether you’re a sole proprietor or a partner, consider:
- Does your business have a succession plan?
- Do you and your partners agree on buyouts triggered by death, disability, or retirement?
- Are spouses aware of what happens to the business share on a partner’s death?
- Is there life insurance or liquidity to buy out an estate?
Proactive planning can ensure a smooth transition. A corporate attorney can draft buy-sell agreements and succession documents, while an estate attorney helps protect and transfer value. Business owners are urged to consult professionals before a triggering event occurs, as post-event planning is often more complex and costly.
In addition to being a co-founder of the LIAFPN, Larry Scherer has a strong background in Trust & Estates and Elder Law and serves as Managing Member of Scherer & Pudell, PLLC, a transactional law firm in Garden City, NY. He can be reached at (516) 747-7007. Connect on LinkedIn.
