New York State Tax and Power of Attorney Changes and Obama Administration's Tax Proposals

As part of the New York State budget legislation enacted in April 2009, for a three-year period commencing on January 1, 2009, New York State has increased income tax rates and eliminated most itemized deductions for certain high-income taxpayers. In addition, earlier this year, New York legislation was enacted to modify various provisions of the New York statutory short form power of attorney. The attached memorandum entitled “New York State Tax Changes and Modifications to the New York Statutory Short Form Power of Attorney” summarizes these changes.

The Obama Administration, as part of its 2010 Revenue Proposals, has set forth several significant tax proposals that, if enacted, would (i) require a minimum 10-year term for all grantor retained annuity trusts (“GRATs”), (ii) eliminate or limit valuation discounts with respect to certain gifts of family-controlled entities and (iii) increase individual income taxes through rate increases and limitations on deductions for certain high-income taxpayers. The attached memorandum entitled “Obama Administration’s Fiscal Year 2010 Revenue Proposals Relating to Estate, Gift and Income Taxation of Individuals” summarizes these tax proposals.

If you wish to discuss how these tax changes and proposals affect your estate plan, please call one of the attorneys listed under Private Clients and Charitable Organizations of this web site.