We continue to follow the developments of the federal and state estate tax. As previously advised, some states have considered and even adopted legislation which provided for a phase out or at least an increase to their estate tax exemption, New York being one of them. However, New Jersey continues to be one of the most expensive states in which to die. In June there was some brief talk about repealing the estate tax and replacing it with a “millionaires’ tax” on high income earners. More recently, a legislator from Bergen County introduced legislation increasing the New Jersey Estate Tax exemption from $675,000 to $1,500,000. The proposed legislation would also shield inheritances left to siblings and their spouses from the New Jersey Inheritance, which currently are subject to a tax that ranges from 11 percent to 16 percent for amounts over $25,000.
Until such legislation is adopted, New Jersey continues to be an expensive place to die. New Jersey is one of only two states to levy taxes on both estates (over $675,000) and inheritances (by anyone other than a “Class A” beneficiary, defined as lineal descendants, spouse or civil union partner). Therefore, tax planning remains a crucial part of one’s estate plan.
– Nicole E. Russak, Esq.