The New Jersey estate tax came under fire politically in this past year leading to an agreement to get rid of it entirely. Many people within the state were considering their options to move and retire elsewhere primarily because of the NJ state estate tax, a tool that many viewed as archaic and unnecessary. Some people moved to neighboring states or even established a residence in Florida half the year to avoid hefty taxes. Perhaps those days will be coming to an end very shortly and New Jersey can keep more people within the state as they live out their retirement and golden years.
According to the New Jersey Society of CPAs, up to three-quarters of their survey pool indicated that moving to another state was a serious retirement strategy given NJ’s state estate tax. This was the leading reason for why legislators began to think about letting it go entirely. With a rising number of people eager to leave the state and avoid such a large chunk of their estate being taken, it’s likely that eventually the revenue received from the estate tax would have decreased significantly.
At present, all estates valued at more than $675,000 trigger the estate tax. That threshold will be lifted to $2 million in 2017 and then will completely disappear in 2018. Once that happens, all estates will be taxed if they exceed the federal threshold. With this phase-out, it’s a good idea to set up a meeting with your NJ estate planning lawyer today to discuss your options. You may have more flexibility as this plan is phased out and be looking for new planning opportunities to make the most of what you leave behind for heirs.