Today, it is common for retirees to have residences in multiple states. Some choose to keep his or her family home and acquire a small home in Florida to visit during the cold months. When a person who owns residences or financial accounts in two different states passes, an ancillary probate proceeding must be commenced where the other real property is located. An ancillary proceeding is an administrative proceeding that is required in addition to the original probate process of a Last Will & Testament. Usually, this administrative proceeding is required because a person owns real property outside of his or her home state.
An inventory of assets is a form that may be required by the Surrogate’s Court. The form must be completed and delivered to the court by either the fiduciary of the estate or, at the request of the fiduciary, it may be provided by the attorney on record.
Over the last few years, both New Jersey and federal estate tax laws have changed. Currently, a decedent’s estate only needs to pay federal estate tax if the gross value of the estate exceeds $5,490,000. In New Jersey, estates with a value in excess of $2,000,000 have to pay the state’s estate tax. As of January 1, 2018, the New Jersey estate tax will no longer be in effect.
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. Continue reading “New Jersey Estate Tax Repeal: Is it now better to die in New Jersey than Florida?”
New Jersey residents may see a possible elimination of the estate tax in the next few years, but that all hinges on whether or not an increase in the state’s gas tax will be approved.
NorthJersey.com reported that the State Senate passed a bill, sponsored by Paul Sarlo and Steve Oroho, that would increase the gas tax by 23 cents, with an amendment to phase out the estate tax over time. As part of the deal, the threshold at which an inheritance would be taxed would increase until 2020, when the tax would be totally eliminated, according to NJBiz. The exemption is currently at $675,000, but it would go up to $2 million at the beginning of 2017 and again to $5.4 million by 2018.
In New Jersey, any estate larger than $675,000 is subject to the New Jersey Estate Tax.
A New Jersey estate tax return, Form IT Estate, must be filed if the decedent’s gross estate plus adjusted taxable gifts exceeds $675,000 within 9 months of date of death. The New Jersey estate tax is either the maximum credit for state inheritance, estate, succession or legacy taxes allowable under the provisions of the Internal Revenue Code in effect on December 31, 2001 (this is called the “Form 706 Method”), or an amount determined pursuant to the Simplified Tax System prescribed by the Director, Division of Taxation (this is called the “Simplified Form Method”).