June 5, 2014

On top of federal estate taxes to which your estate can be subject, you may also need to plan in advance for state estate and inheritance taxes. As far as inheritance taxes go, six states use these to obtain funding from assets passed on to heirs. In the past, state estate taxes largely weren’t an issue for most of the population because the federal government gave an estate tax credit based on how much was already paid into state taxes. Now it’s largely up to the states, and if you’re a resident in one where your assets could be subjected to a pretty substantial hit, it’s simply prudent to plan in advance.

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The state thresholds aren’t so high that many people can be exempted, either: New Jersey’s exemption stops at $675,000. Factoring in the value of many people’s homes, retirement accounts, and other assets, it’s not hard to surpass that. And New Jersey is a double whammy- state taxes and inheritance taxes apply there, so it’s very common for individuals and business owners especially to consider their planning options well in advance.

The good news is that there are strategies and opportunities to identify and mitigate risk, but they do depend on your state. You want to find a professional that is up to date on all relevant state laws and regulations to ensure that your estate is protected properly. Contact us today to begin or to review your existing plans by email at info@lawesq.net or at 732-521-9455.