Helping You Minimize Estate And Gift Taxes In New Jersey

The Economic and Growth and Tax Relief and Reconciliation Act of 2001 called for a phase-out of the federal estate tax in stages by the year 2010. Although most tax experts expected Congress to change the law, the tax died in 2010. However, it was reinstated in 2011. Estates of decedents dying that year in excess of $5 million were taxed at 35%. In 2012, the estate tax was made permanent, and the exemption was increased to $5.12 million with the passage of the American Tax Payer Relief Act of 2012 ("ATRA"). In addition, the estate tax was indexed for inflation. As a result, the exemption amount was $5.25 million in 2013; $5.34 million in 2014; and $5.43 million in 2015. ATRA also increased the top tax rate on estates in excess of the exemption amount to 40%.

ATRA permits portability of the exemption amount between spouses. This permits the surviving spouse to utilize any unused estate and gift tax exemption remaining from the first spouse, provided the portability option is exercised when the estate tax return of the first spouse is filed, even if no federal estate tax is owed.

These are complex federal tax issues, to be sure. We can help you and your family plan for and minimize federal estate taxes with the use of trusts and other estate planning strategies.

New Jersey Inheritance And Estate Tax

In addition to federal estate tax, New Jersey imposes both inheritance and estate taxes. The inheritance tax is imposed on the amount received by the individual recipient. Bequests and other distributions to spouses, parents, children and step-children are exempt from the inheritance tax. Bequests and other distributions to other recipients are taxed at varying rates that are determined by the recipient's relationship to the deceased.

The New Jersey estate tax on all net estates valued at more than $675,000. The rate of the tax varies depending on the value of the estate. Almost every estate that includes a retirement account or real estate is affected by the New Jersey estate tax.

At the law office of J. Jeffrey Press, P.A., we provide estate tax planning to minimize or eliminate both federal and New Jersey estate taxes and inheritance taxes through devices such as credit shelter trusts, qualified terminal interest ("QTIP") trusts, qualified personal residence trusts ("QPRT"), and other forms of trusts and outright gifts. We serve clients throughout northern and central New Jersey, including Morris, Essex, Passaic and Somerset counties.

Estate Planning Techniques To Minimize Or Eliminate Estate Taxes

Plans to minimize estate taxes usually involve removing assets from the estate. There are several ways you can do this:

  • Moving life insurance benefits to an irrevocable life insurance trust
  • Moving a house to a qualified personal residence trust
  • Placing assets in an irrevocable asset protection trust

It does not make sense to let tax consequences drive your entire estate plan. You may not be comfortable with giving up control of assets solely for the purpose of eliminating taxes. J. Jeffrey Press can provide you with a range of options to meet your goals for control of your assets and minimizing estate taxes.

Gift planning: You can give anyone up to $14,000 a year without filing a gift tax return. If you wish to give more, J. Jeffrey Press can advise you in techniques such as split gifting.

For More Information About Estate And Gift Tax Planning, Please Contact Our Office In Parsippany

To schedule a consultation with an attorney at the law offices of J. Jeffrey Press, P.A., please call 973-323-2654 or fill out our contact form on this website.