Compared to other places in the country, New Jersey’s estate tax is kind of a killer.
In fact, ours is one of only two states still assessing not only an estate tax on the deceased person’s assets but also an inheritance tax on some of the people who benefit from those assets. Meanwhile, most other states have eliminated the death tax altogether.
The Garden State has always had reputation for aggressive taxation on the dead and their loved ones. Even among those states that do still have their own estate tax, New Jersey offers the fewest number of exemptions.
New Jersey simply isn’t a prudent place to die (financially speaking, at least). But lawmakers are looking to change that.
USA Today reports that more than a half-dozen proposals are already on their way to the state legislature, and at least one of them has a decent chance of passing (though it may come tethered to a gas-tax hike). Financial planners across the state are celebrating that as a step in the right direction, and most New Jersey residents say they’re in favor too.
Of course, nothing’s set in stone yet, and until it is, you should make sure that your estate plan protects your family should you happen to pass away before there’s a meaningful change in the law.
And if the tax does change in the future — whether it’s merely minimized or altogether wiped out (there are proposals in place for both) — it will only open the door for increased tax savings opportunities.
In most other states, the estate tax is at most an afterthought for all but the wealthiest of families. Instead, estate plans have emerged as important mechanisms for asset protection and tax savings in other areas. That could soon be the case here in New Jersey too.
In the meantime, should you need assistance with estate planning in New Jersey, Medina Law Group can help. Give us a call to learn more about your options.