Five Reasons You Need A Will (Even If The Estate Tax Is Repealed)!
Earlier this year, the world lost pop music icon Prince. He left behind an incredible legacy—but no instructions about how his estate should be handled after his passing. Prince died without a will, and it could take years for his family and the courts to sort out his posthumous affairs.
A will is an extremely important legal document: upon your passing, your will communicates to family and other interested parties your intentions as to the raising of your kids and the distribution of everything you own (or have rights to). But the majority of Americans do not have a will (source: Gallup). This past month added a new wrinkle: a new client of ours who knows a will is necessary, but has decided to wait and see if our President-elect will make good on his campaign promise to repeal the estate tax before establishing one. Often lovingly referred to as “the death tax,” proposals to repeal the estate tax have been around for decades. Although there is the potential for tax planning within a will, especially for estates greater than $5.45 million (double that for married couples), a will is critical for many non-tax reasons.
New Jersey Repeals Estate Tax, Not Inheritance Tax
Update: On Oct. 14th, Gov. Christie signed into law the transportation funding bill, and the accompanying tax bill. It’s The Law: New Jersey Estate Tax Repeal In 2018 .
The New Jersey legislature today voted to repeal the state’s estate tax as part of a deal including a 23-cents-a-gallon tax hike to renew the state Transportation Fund. The once-wannabe Republican presidential candidate Governor Chris Christie is expected to sign the bills into law, which will mean he follows in the footsteps of the two vice presidential candidates Democratic Senator Tim Kaine and Republican Governor Mike Pence who oversaw the elimination of their state’s estate taxes in 2007 (Virginia) and 2013 (Indiana) respectively.
Changes for the NJ Estate Tax
Q. Now that the estate tax is being phased out, what is meant that it benefits the top 4 percent? Please address the new estate tax exemption.
— Planning ahead
A. The estate tax in New Jersey is one of the reasons many people decide to leave the state.
That’s because while the federal government has increased its estate tax exemption to more than $5 million, New Jersey has stuck with $675,000.
That means anyone who dies with assets worth more than $675,000 will have estates subject to the tax.
That may sound like a lot of money, but if you own even a modest home in the northern part of the state, you’ll probably hit the $675,000 threshold.
Now, the 4 percent statistic you stated comes from data by New Jersey Policy Perspective, which says about 4 percent of estates in New Jersey pay the tax.