Lifetime Gifting Attorney

How Lifetime Gifting Affects Your Estate

New York taxes lifetime gifts differently than most clients expect. Certain gifts made within three years of death are added back into your New York gross estate under the state's "clawback" rule, even though the gift was already completed and the asset was out of your hands. Separately, assets you give away during life generally carry over your original cost basis, while assets your heirs inherit at death usually receive a step-up in basis to fair market value. Get the timing or the asset selection wrong, and a gift meant to save taxes can end up costing your family more than it saved. We go into the mechanics of the three-year rule and the basis trade-off in more detail in our article on how gifting during your lifetime affects your New York estate, which is worth reading alongside this page if you want the fuller explanation.

How We Help

1. Review your full estate picture. We look at your total assets, your New York estate tax exposure, and your family's goals before recommending any gift.
2. Map out gift timing against the three-year look-back. We build a gifting schedule that gives the clawback period time to run, rather than leaving a large gift exposed close to end of life.
3. Weigh basis consequences asset by asset. Real estate, closely held business interests, and appreciated securities each carry different basis trade-offs — we identify which assets are better given now and which are better left to pass at death.
4. Structure gifts to use annual exclusions efficiently. We help you make use of the federal annual gift tax exclusion across multiple recipients and years instead of one large, exposed transfer.
5. Document every gift properly. We prepare the records your executor and accountant will need to show the IRS and New York State exactly what was given, when, and why — protecting your estate from disputes later.
6. Coordinate gifting with your broader estate plan. Lifetime gifts are reviewed alongside your will, trusts, and powers of attorney so one strategy doesn't undercut another.

Gifting vs. Waiting: The Decision Clients Get Wrong

The instinct to "just give it away now" is understandable, but it isn't automatically the right call. A gift made well outside the three-year window permanently removes that value from your taxable estate. The same gift made shortly before death may be pulled back in and accomplish nothing for New York estate tax purposes, while still handing your heirs your original, lower basis instead of a stepped-up one. The right answer depends on your health, your estate's size relative to New York's exemption, and which specific asset is being considered — which is exactly the analysis my office walks through with clients before any gift is made.

Frequently Asked Questions