New Jersey estate planning is a bit different than it is in just about every other state because we have some additional taxes that we must contend with as citizens of the Garden State.
Everyone in the United States has potential exposure to the federal estate tax. The deciding factor with regard to whether or not your heirs will be asked to pay the tax is the estate tax exclusion.
A certain amount of money can in fact be passed on free of taxation. Right now that figure is $5.12 million, but under current laws this exclusion is being reduced to $1 million in 2013. The maximum rate goes up at that time to 55%; 35% is the top rate this year.
New Jersey is one of the two states (Maryland is the other) that actually has both an inheritance tax and an estate tax on the state level.
Inheritance taxes are paid by the individual recipients of bequests. So if you were to leave your assets to your three children each of them would pay this tax.
The New Jersey estate tax is imposed on the entirety of the estate before it is distributed. Right now the exemption amount is $675,000.
People who are not in possession of resources exceeding this figure have estate planning challenges of their own. But those who have been especially successful throughout their lives have an added set of concerns.
It is possible to position your assets wisely in an effort to minimize your tax exposure, and this is best achieved with the assistance of an inheritance planning lawyer who has a background assisting high net worth families.