Relief for New Jersey Estate Tax Payers

The State of New Jersey has offered relief to its residents by increasing the exemption amount from $675,000 to $2,000,000 for residents dying on or after January 1, 2017, but before January 21, 2018. This will be applied by providing a credit of $99,600 to the amount of estate tax owed. After January 1, 2018, the New Jersey estate tax will not be imposed. See P.L.2016, ch. 57.

The State has not changed its Inheritance Tax which imposes a tax on estates which pass its assets to those other than husband, wife (who is an US resident), grandparents or children. The tax is 11% to 16% on amounts over $25,000 on Class C beneficiaries who are brother, sister, spouse of a child, or civil union partner of child. All other beneficiaries will pay 15% to 16% of the value of the estate.

Both taxes place inchoate liens on all property held in the State. Waivers may be necessary to pass the assets. The executor of the estate will have to rely on information from the asset holder to determine what is necessary to transfer the asset from the asset holder to the beneficiaries. The Division of Taxation issues the waivers. In regard to real estate, an L-9 form
must be filed with the Division of Taxation which will issue the waiver. This means that no tax was due or the tax has been paid and therefore the inchoate lien is waived. Then the property
may be sold after the tax waiver is recorded in the County Clerk’s Office.

While every effort has been made to insure the accuracy of this publication, it is not intended to provide legal advice as individual situations may differ. For specific legal advice, please contact me.