February 24, 2015

New Jersey residents are quick to point out their cheap gas prices, but the state is also known as being one of the “worst states to die” because of its double-whammy on death: the estate tax and the inheritance tax. Since the state is so expensive in taxing both the estate and the heir, estate planners often work with clients to create specific strategies to protect as much wealth as possible. It also leads some older individuals to consider skipping town altogether in search of warmer climes and lower taxes.  

New Jersey lawmakers are currently contemplating whether a gas tax could help pay for some rail and road projects that the state desperately needs, leading some to question whether it’s time to trade in the higher death taxes in exchange for a gas tax either on wholesale refinery purchases or at the pump.

Chris Christie hasn’t revealed his final plans yet, but he has a major challenge in trying to figure out how to fund the otherwise nearly drained Transportation Trust Fund.

The typical first thought regarding death taxes is that they only influence the wealthy, but that’s simply not true- New Jersey has quite low thresholds that deliver the problem directly to the middle class.  Since the estate tax is levied on bank accounts, retirement accounts, life insurance, real estate, and investments. The state gets the estate taxes on these items if the estate is valued at more than $675,000 and the assets are not left to a spouse.

To learn more about planning strategies for maximizing your estate in New Jersey, contact our office at info@lawesq.net.