Bronx Tax Planning Attorney

Estate planning isn’t just about distributing assets—it’s also about minimizing the tax burden on your estate and your beneficiaries. Without proper planning, a significant portion of your wealth could be lost to federal or state estate taxes, gift taxes, or capital gains. At Cavallo & Cavallo, our Bronx tax planning attorneys help residents implement smart, personalized tax planning strategies that preserve wealth and create lasting legacies.

What Is Estate Tax Planning?

Estate tax planning is the process of organizing your finances and structuring asset transfers in a way that reduces or eliminates taxes owed upon death or during lifetime gifting. Effective planning can help you:

• Avoid or reduce federal and New York estate taxes
• Minimize gift and generation-skipping transfer (GST) taxes
• Reduce income and capital gains tax exposure
• Increase the net value passed to your beneficiaries
• Ensure your plan is legally compliant and tax-efficient

We work with individuals, couples, and business owners to design integrated estate and tax plans that support long-term financial goals.

Understanding Estate Taxes

New York is one of the few states that imposes a separate estate tax, in addition to the federal estate tax. Knowing how these taxes work is essential to protecting your assets.

Federal Estate Tax
The federal estate tax applies to estates exceeding the exemption threshold. As of 2025, the federal exemption is scheduled to drop to approximately $6 million per individual. Estates above this limit may be taxed at rates up to 40%.

New York Estate Tax
New York’s exemption is slightly over $6 million, but it includes a “cliff” rule—if your estate exceeds the exemption by more than 5%, your entire estate becomes taxable, not just the excess. This makes precise planning critical.

There is no inheritance tax in New York, but poor planning can still result in large, avoidable tax liabilities.

Strategies to Reduce Estate Taxes

With careful planning, most individuals and families can significantly reduce or eliminate estate taxes. At Cavallo & Cavallo, we use a variety of strategies tailored to your needs.

Common tools include:

• Credit Shelter Trusts (Bypass Trusts): Preserve both spouses’ exemptions by sheltering assets in trust upon the first death.
• Spousal Lifetime Access Trusts (SLATs): Move assets out of your estate while allowing your spouse to access income or principal.
• Irrevocable Life Insurance Trusts (ILITs): Keep insurance proceeds from being counted as part of your taxable estate.
• Charitable Remainder and Lead Trusts: Reduce taxes while supporting charitable causes and benefiting your heirs.
• Family Limited Partnerships (FLPs): Shift ownership of business interests or real estate to younger generations with valuation discounts.
• Annual Gifting: Take advantage of the annual gift tax exclusion (currently $18,000 per recipient) to transfer wealth tax-free.

We evaluate your assets, family structure, and goals to create a plan that protects your estate from unnecessary taxation.

Income and Capital Gains Tax Considerations

Estate planning also intersects with income and capital gains tax planning. You want to avoid leaving your beneficiaries with large tax bills—or triggering avoidable taxes during your lifetime.

Key considerations include:

• Step-Up in Basis: Assets passed at death receive a new tax basis equal to their fair market value, minimizing capital gains when sold.
• Lifetime Gifting: Gifts during life don’t receive a step-up in basis, so timing matters.
• Trust Taxation: Certain trusts have compressed income tax brackets; we help structure distributions and asset allocations accordingly.
• Qualified Retirement Accounts: IRAs and 401(k)s have specific tax rules and may benefit from Roth conversions or charitable planning.

Proper coordination among your estate documents, asset titling, and financial plan can reduce income taxes for you and your heirs.

Gift Tax and Lifetime Giving Strategies

In addition to estate taxes, the federal government imposes a gift tax on large lifetime transfers. However, you can use exemptions and exclusions to gift tax-efficiently.

• Annual Exclusion Gifts: You can gift up to $18,000 per year, per recipient, without using your lifetime exemption.
• Lifetime Gift Tax Exemption: Tied to the estate tax exemption (approx. $6 million in 2025), this allows large gifts during life without immediate tax.
• Direct Payments for Medical or Tuition Expenses: Not considered taxable gifts if paid directly to the provider.
• Gifting to Irrevocable Trusts: Can reduce your taxable estate while providing long-term benefits for beneficiaries.

We help clients implement multi-year gifting strategies that align with tax goals and family dynamics.

Tax Planning for Married Couples

Married couples have several opportunities to reduce estate taxes through coordinated planning. Tools such as portability (federally) and credit shelter trusts (in New York) help ensure that both spouses’ exemptions are fully used.

Our services for couples include:

• Joint estate tax analysis
• Spousal trust creation and management
• Coordinating asset ownership between spouses
• Structuring lifetime gifts to benefit both spouses and children

Proper coordination can save hundreds of thousands of dollars in taxes and preserve wealth across generations.

Tax-Sensitive Trust Planning

Trusts are a critical tool for both estate and tax planning. Different types of trusts offer varying tax benefits, and the wrong structure can result in unintended consequences.

We help clients understand:

• Which trusts are included in your taxable estate
• How income from trust assets is taxed to you or the beneficiaries
• When to use grantor vs. non-grantor trust status
• Tax reporting requirements and compliance obligations

We also offer trustee support to ensure proper trust administration and tax filings.

Frequently Asked Questions About Tax Planning

Will I owe estate tax when I die?
Only if your estate exceeds the federal or New York exemption amount. However, these thresholds may change, and proper planning can prevent unexpected liability.

How do I reduce estate taxes if I own real estate or a business?
You can use trusts, gifting strategies, or family limited partnerships to reduce the taxable value and pass ownership efficiently.

Do life insurance proceeds count toward my estate?
Yes, unless the policy is owned by an irrevocable trust. An ILIT can remove the death benefit from your taxable estate.

What happens if I don’t plan for taxes?
Your estate may face significant tax bills, delaying distribution to your heirs or forcing the sale of property or investments to pay taxes.

Should I be worried about the 2025 estate tax changes?
Yes. The federal exemption is scheduled to drop by half in 2026. Planning now allows you to lock in current higher limits.

Can charitable giving reduce my estate taxes?
Absolutely. Strategic charitable giving through trusts, foundations, or direct gifts can provide deductions while supporting meaningful causes.

Serving Throughout The Bronx

• Riverdale
• Spuyten Duyvil
• Pelham Bay
• Morris Park
• Throggs Neck
• Kingsbridge
• Woodlawn
• Parkchester
• Bedford Park
• Fordham

How Cavallo & Cavallo Can Help

With over 30 years of experience serving Bronx families, Cavallo & Cavallo offers trusted, forward-thinking estate and tax planning tailored to your life. We work with individuals, couples, and business owners to create legally sound, tax-efficient plans that protect wealth and honor family values.

Our tax planning services include:

• Estate and gift tax reduction strategies
• Trust creation and funding for tax efficiency
• Retirement and investment coordination
• Charitable giving and foundation planning
• Coordination with CPAs and financial advisors
• Multi-generational legacy planning

We take a proactive, personalized approach to ensure your legacy remains intact and your tax exposure minimized.

Speak With a Bronx Estate Planning Attorney About Tax Planning

You’ve worked hard to build your estate—don’t let unnecessary taxes erode your legacy. Contact Cavallo & Cavallo today to speak with an experienced Bronx estate planning attorney and begin crafting a comprehensive tax plan that protects your future and benefits generations to come.