In a joint appearance on September 30, 2016, Governor Chris
Christie and legislative leaders announced a bipartisan agreement
to repeal the New Jersey Estate Tax.
The repeal is part of the tax package increasing the gasoline
tax and dedicating those revenues to transportation infrastructure
following the recent Hoboken train accident.
New Jersey is currently one of 19 states that imposes an estate
tax. As other states have moved to increase their estate tax
exemption, New Jersey has kept the exemption at $675,000, the
lowest in the country.
Under the proposal, the exemption is to increase to $2,000,000
for the year 2017, and the estate tax is to be repealed beginning
Read the press release here. View the video and transcript here.
Upon enactment of the proposal, New Jersey will compare
favorably to states such as Florida, Texas and California for
estate tax planning purposes. In the northeast, states retaining an
estate tax include New York, Connecticut, Massachusetts, Vermont,
Maine, Maryland and Delaware. Pennsylvania continues to impose an
The estate tax savings will be significant. Currently, the New
Jersey estate tax on a $1,000,000 estate is $33,200, on a
$2,000,000 estate is $99,600, and on a $5,000,000 estate is
$391,000. For estates that exceed the Federal estate tax exemption
of $5,450,000 (increasing to $5,490,000 in 2017), the combined top
rate of estate tax will drop from 49.6% to 40%, a savings of
The New Jersey inheritance tax is not mentioned in the
announcement, and presumably will remain in effect. However, since
the reforms of Governor Kean in 1985, that tax has been limited to
transfers to persons other than a spouse, descendant or
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clients in other jurisdictions.
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Butler Snow attorneys Christopher L. McLemore and John R. Wood recently contributed the following article to eprivateclient.com, a leading internet publication for those in the wealth management field.
As this time, it is difficult to determine what the specific provisions of President-Elect Donald J. Trump's tax proposals will be; however, it is important to highlight the types of planning that are not likely to be affected, and therefore could, and should, continue.
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