New York Budget Bill Proposes Estate and Gift Tax Reform and Changes to Income Taxation of Trusts: New York Governor Andrew Cuomo’s Executive Budget Bill for 2014-2015 Proposes Including Gifts in Taxable Estate, Increasing Estate Tax Exemption, Decreasing Maximum Estate Tax Rates, Eliminating the Generation-Skipping Transfer Tax and Changing the Taxation of Non-Resident and Exempt Resident Trusts with New York Resident Beneficiaries

Sullivan & Cromwell LLP - February 28, 2014

On January 21, 2014, Governor Cuomo submitted his Executive Budget Bill for 2014-2015 to the New York State Legislature. Such Bill, as amended (the “Bill”) if passed, would include in the estate of a New York resident any gifts made on or after April 1, 2014 and while such taxpayer was a New York resident, increase the estate tax exclusion amount, decrease the top New York estate tax rate from 16% to 10%, repeal the generation-skipping transfer (“GST”) tax and impose a tax on distributions made to New York beneficiaries of certain income accumulated in non-resident and exempt resident trusts. If enacted, these changes generally would be effective April 1, 2014.