zelner
06-14-2007, 01:24 AM
Attention all you Middle Class folk in New Jersey:
After completing my estate plan I wanted to warn all of my fellow NJ citizens about the current NJ estate tax and how it may affect you. After you die your New Jersey estate is potentially subject to a Federal Estate Tax and a New Jersey Estate Tax. After 2001 a law in NJ was changed which made the NJ Estate Tax a big problem for a lot of people. Basically, when you die and you pass more than $675,000 to anyone other than a spouse or a charity, the amount transferred in excess of $675,000 will be subject to the NJ Estate tax which could be as high as 16% in some cases.
By contrast, Federal law allows much higher amounts to be transferred at death without being subject to Estate Tax. The Federal Estate Tax Law lets you pass the following amounts free of tax: For the years 2006-2008 $2,000,000; For the year 2009 $3,500,000; or the year 2010 & 2011 $4,000,000. After 2011, the amount goes down to $1,000,000 unless Congress decides otherwise.
Things can get more complex depending on your situation.
One way to avoid the NJ Estate tax is to move to a state that has no such tax, like Florida. I guess that is why so many retirees I know have moved down there recently.
After completing my estate plan I wanted to warn all of my fellow NJ citizens about the current NJ estate tax and how it may affect you. After you die your New Jersey estate is potentially subject to a Federal Estate Tax and a New Jersey Estate Tax. After 2001 a law in NJ was changed which made the NJ Estate Tax a big problem for a lot of people. Basically, when you die and you pass more than $675,000 to anyone other than a spouse or a charity, the amount transferred in excess of $675,000 will be subject to the NJ Estate tax which could be as high as 16% in some cases.
By contrast, Federal law allows much higher amounts to be transferred at death without being subject to Estate Tax. The Federal Estate Tax Law lets you pass the following amounts free of tax: For the years 2006-2008 $2,000,000; For the year 2009 $3,500,000; or the year 2010 & 2011 $4,000,000. After 2011, the amount goes down to $1,000,000 unless Congress decides otherwise.
Things can get more complex depending on your situation.
One way to avoid the NJ Estate tax is to move to a state that has no such tax, like Florida. I guess that is why so many retirees I know have moved down there recently.