New Jersey is one of two states that impose both an inheritance tax and a State estate tax upon death (Maryland is the other state). According to a bill signed into law by Governor Chris Christie in October 2016, the estate tax exemption amount in New Jersey is $2 million for individuals dying in 2017, and the New Jersey estate tax will be eliminated for those dying after January 1, 2018. Prior to this law, New Jersey had been designated “the most expensive state in which to die,” with an estate tax exemption of just $675,000 (in addition to the inheritance tax). Now, decedents who die in 2017 will not be subject to the State estate tax unless their taxable estate exceeds $2 million and those who die after 2017 will not be subject to the State estate tax regardless of the value of the estate (although, there still is a federal estate tax which has a current exemption amount of $5,490,000). Although the New Jersey Estate tax is seemingly on its way out, the State will remain one of six to impose an inheritance tax on transfers from a decedent to a non-exempt beneficiary.
However, given New Jersey’s poor financial circumstances, there is skepticism as to whether the New Jersey estate tax will really be eliminated. With Governor Christie’s term ending mid-January 2018, Democratic gubernatorial candidate, Phil Murphy has expressed his opposition to the estate tax phase-out. “[G]iving in to the governor’s demand to provide a nearly $500 million tax break to 4,000 wealthy New Jersey families ensures that the middle class, again, is left holding the bag.” Murphy wishes to restore middle class property tax relief programs and views the elimination of the State estate tax as depriving the State of money that can be used to implement these programs as a well as cut the cost of college, assist small businesses, expand job training, pay down the State’s debt, etc. Murphy has expressed his belief that “[t]he standards by which Trenton operates need to change, and as governor, [he] will see that they do.” His opponent, current Lt. Gov. Kim Guadagno, has not specifically commented on the elimination of the New Jersey estate tax, but has criticized Murphy as being too willing to impose taxes.
For more information or if you have any questions about the New Jersey estate tax, please contact Judson M. Stein, Chair of the Trusts & Estates Practice Group, at 973-230-2080 or email@example.com or Lauren M. Ahern, Associate in the Trusts & Estates Practice Group.
Tags: Tax Procedure • estate planning • genova burns • Trusts & Estates • GENOVA BURNS LLC • JUDSON M. STEIN • Estate • Lauren M. Ahern • Taxable estate • Kim Guadagno • Governor Christie • Chris Christie