New Jersey taxpayers will see some major changes in the coming years due to a deal made aiming to fund the state’s Transportation Fund. Perhaps most noticeable will be a 23-cent increase in gasoline taxes, which will be used to fund highway and transportation projects. In exchange for that tax hike, legislators are lowering the sales tax and, as of 2018, eliminating the estate tax in our state.
Currently, estates in New Jersey worth more than $675,000 are subject state estate taxes, compared to the federal threshold of $5.45 million. Since your estate includes real property, investments, life insurance proceeds, retirement accounts, business interests, investments, and more, many estates are worth at least $675,000. In fact, the estate tax threshold has been blamed for driving people with wealth away from living in New Jersey.
As of January 1, 2017, the estate tax threshold will be raised to $2 million as part one of the phase-out plan. As of January 1, 2018, the estate tax will be eliminated completely on the state level in NJ.
Estate Planning is Still Important
Many people believe that the main function of estate planning is to avoid estate taxes. While tax planning is a major concern for estate planning attorneys, it is far from the only benefit of having an estate plan. Some other important reasons to have a comprehensive estate plan include:
- To help prevent most of your property and assets from going through probate
- To designate an executor or trustee
- To better control how your assets are distributed, including specific conditions on distributions
- To protect your estate from creditors
- To designate a power of attorney
- To make your healthcare wishes known
Finally, it is important for New Jersey residents to remember that the federal estate tax still exists, so anyone whose estate may be worth more than $5.45 million altogether will need to carefully plan ahead to minimize gift and estate taxes. A skilled estate planning attorney can help you accomplish all of your goals.
Call 201-498-9768 today for more information.
When you call the Law Office of John L. Schettino, you can consult with a skilled New Jersey estate planning attorney who can address any questions or concerns about the changing estate taxes. We can also help you with any estate planning needs you may have, so please contact us today to learn more.