JD Supra reports that on October 14th, Governor Christie signed a new law that will remove the New Jersey estate tax. The law will be implemented in a three-year process. Beginning in 2016 New Jersey decedents will not be taxed on an estate less than $675,000. Beginning January 1, 2017, there will be no tax on decedents if their taxable estates are less than two-million dollars. On January 1, 2018 the New Jersey estate tax will be eliminated altogether. The agreement to repeal the estate tax, comes as a compromise to an increase of the New Jersey gas tax by twenty-three cents per gallon.
The next question for the elderly may become: Is New Jersey now as appealing to die in as Florida? While the repeal of the estate tax makes dying in New Jersey more appealing, New Jersey is only one of six states that has an inheritance tax in place. The inheritance tax is imposed on a transfer to a beneficiary that is not a spouse, parent, children, or grandchildren. This category would include siblings, nieces, nephews, and friends. The rate of this tax is dependent on the “class” that the beneficiary is assigned to.
Furthermore, New Jersey has an income tax. Unlike in Florida, New Jersey residents will pay state income tax on all income. Therefore, while the repeal of the New Jersey estate tax helps residents who die in New Jersey, Florida may still be the choice for the elderly to relocate to. With that being said, both states offer better options regarding estate tax than the states that will still have the tax in place including New York, Connecticut, Massachusetts, Maryland and Delaware.
Even with the repeal of the New Jersey estate tax, it is crucial to make sure your estate is in order. If you have questions or concerns regarding estate taxation or need assistance in preparing your estate, contact the experienced attorneys at The Law Offices of Hunziker, Jones & Sweeney at (973) 256-0456 for a consultation.