New Jersey residents face three possible “death taxes”—inheritance tax, NJ estate tax and federal estate tax.
If you leave property to someone other than your spouse, children, grandchildren, parents or a charity, then your heirs may have to pay inheritance tax. If you leave property to your brother or sister, niece or nephew, boyfriend or girlfriend, or friend, for example, they may face inheritance tax.
If you own more than $675,000 in property when you die, your estate may have to pay New Jersey estate tax. However, the state recently increased this amount to $2,000,000 for deaths in 2017. Deaths in 2018 or later face no New Jersey estate tax (unless the law is changed).
Federal estate tax only affects people with more than $5.5 million when they die (or who have made enormous gifts during their lifetime). Chances are, it won’t affect you. And if it does, hopefully you already have a good lawyer. —Mark R. Friedman, Esq., FriedmanLaw