The landscape of estate taxation in New York has shifted significantly in 2026. Two major changes affect how families in Brooklyn plan their estates and navigate the Surrogate's Court process.
New York State Exemption: $7.35 Million
For 2026, the New York estate tax exemption has increased to $7.35 million. This means estates valued below this threshold owe no New York estate tax. However, New York's infamous "cliff effect" remains in place — if an estate exceeds the exemption by more than 5% (approximately $7.72 million), the entire estate becomes taxable from dollar one, not just the excess.
This cliff effect is unique to New York and catches many families off guard. An estate worth $7.35 million pays zero state estate tax. An estate worth $7.75 million could face a tax bill exceeding $500,000. Careful estate planning around this threshold is critical.
Federal Exemption: $15 Million (Permanent)
The Big Beautiful Bill Act has permanently set the federal estate tax exemption at $15 million per individual ($30 million for married couples). This is a significant change — previously, the elevated federal exemption was set to sunset back to approximately $7 million in 2026. The permanent nature of this exemption provides long-term planning certainty that families haven't had in years.
What This Means for Brooklyn Estates
For most Brooklyn families, the federal exemption is no longer a concern — very few estates exceed $15 million. The New York state exemption at $7.35 million is the more relevant threshold, especially given Brooklyn's high property values.
Key Actions to Take
- Review your estate plan — if your estate is near the $7.35M threshold, consult with an estate planning attorney about strategies to stay below the cliff.
- File ET-85 early — if a loved one has passed and the estate may be near the threshold, file the New York Estate Tax Return (ET-85) as soon as possible.
- Request ET-117 immediately — the Release of Estate Tax Lien (ET-117) takes months to process. If the estate includes real property that may need to be sold, start this process early.
- Consider irrevocable trusts — for estates approaching the threshold, irrevocable trusts can remove assets from the taxable estate (subject to the 5-year Medicaid look-back period).
Filing Deadlines
The ET-85 must be filed within 9 months of the date of death. Extensions are available but must be requested before the deadline. Late filing can result in penalties and interest.
For a complete guide to estate tax forms and procedures, see our Estate Tax Guide.