Death and Taxes

a website by

Richard Bryan Attorney, P.C.

Richard@probate.nyc

 

Our new Constitution is now established, everything seems to promise it will be durable; but, in this world, nothing is certain except death and taxes,

Benjamin Franklin

A website providing useful information regarding the probate and administration of decedent's estates, as well as the laws, rules and regulations, especially federal and New York state income tax, relating to Limited Liability Companies and Subchapter-S corporations

Probate

When a decedent dies and had a Last Will and Testament, the word ‘probate’ refers to proving to the satisfaction of the court that the Will is valid

Administration

If someone dies without a Last Will and Testament, that is known as ‘intestacy’ or ‘dying intestate’.  The process for administration are very similar to probate.

What is an Estate?

Whenever someone dies an estate is created automatically under the law, and has nothing to do with how much money or property a person had when they died.

Do you need a lawyer to probate a Will?

No.  There is no law which says you have to hire a lawyer to probate a will.  

A word about probate costs:

The probate process is frequently ridiculed as an example of a malfunctioning legal system; an extraordinarily costly and time-consuming process with little relation to the fair and orderly administration of a decedent's estate. And there's no question that in many circumstances those criticisms of probate are justified. However in the majority of cases the probate process is reasonably quick and not so costly, and the fear of high probate costs are just not justified. UPDATE: during covid obviously the court systems were shut and slowed down. By the middle of 2022 the Surrogate's courts have still not fully recovered. Some experienced court employees took the opportunity to retire or move to other positions, and everyone is still getting used to the new electronic filing system, so right now there are significant processing delays. In the past, people could go to the courthouse and sit with a clerk and go over the paperwork, but you can't do that anymore.

Business Organizations in New York

What is a Limited Liability Company?

An LLC is a type of business organization formed under state law, and for some owners and businesses have advantages over S Corporations.  LLC’s can be taxed like partnerships, or like S Corps, or if owned by one person, the income from an LLC can be reported directly on the owner’s personal income tax return.

What is an S-Corp?

Corporations are created under New York State law; there is no such thing as a “federal corporation.”  Corporations, just like individuals, have to pay income taxes on their earnings.  Corporations are taxed by the IRS under either of two systems: Subchapter C, or Subchapter S. This is where the phrase “S Corp.” comes in.  S Corps are usually more beneficial for small business owners, because the S Corp’s income tax is paid by the owners at their individual tax rates, which are lower than corporate tax rates.

Anyone may so arrange his affairs that his taxes shall be as low as possible; he is not bound to choose that pattern which will best pay the Treasury; there is not even a patriotic duty to increase one's taxes.

Judge Learned Hand, Gregory v. Helvering, 69 F.2d 809, 810 (2d Cir. 1934)

Over and over again courts have said that there is nothing sinister in so arranging one's affairs as to keep taxes as low as possible. Everybody does so, rich or poor; and all do right, for nobody owes any public duty to pay more than the law demands: taxes are enforced exactions, not voluntary contributions. To demand more in the name of morals is mere cant.

Commissioner v. Newman, 159 F.2d 848, 851 (2d Cir. 1947) - dissenting opinion

Anyone may so arrange his affairs that his taxes shall be as low as possible; he is not bound to choose that pattern which will best pay the Treasury; there is not even a patriotic duty to increase one's taxes.

New York Distinctions

Most of the information online which explains tax and business planning relates to federal law. On this website we explain issues from the federal side, and take the extra step of explaing how New York treats the same issues.

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