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Is relocation the answer to avoiding New Jersey estate and inheritance taxes?

On Behalf of | Mar 22, 2016 | Inheritance And Estate Tax |

New Jersey is one of the only states to have both an estate tax and inheritance tax. Currently, New Jersey has an estate tax rate of up to 16% on assets more than $675,000. Furthermore, New Jersey has an inheritance tax of 16% that applies to people other than spouses, children and parents. These taxes are in addition to the federal estate tax.

At least some New Jersey residents consider relocating due to estate planning considerations. Of note, New Jersey’s wealthiest resident has relocated to Florida. David Tepper, a hedge fund manager worth approximately $10.6 billion, moved to Florida in October of 2015. Florida does not have an estate tax, nor does it have a state income tax. According to people familiar with Mr. Tepper, tax considerations were one factor for the move although not the only factor.

Moving is not the only way to minimize your estate and inheritance tax burden

Many people from New Jersey do retire in Florida or warmer locations. With this said, moving is a dramatic step. While relocating may reduce your estate tax burden, there are many other factors to consider, such as proximity to family and lifestyle.

A skilled estate planning attorney can help you alleviate state and federal estate taxes without taking the drastic step of relocating. A carefully structured trust, along with other estate planning tools, may be effective in minimizing the impact of these taxes.

For decades, families throughout New Jersey have trusted the lawyers of The Manna Helmy Law Group to develop effective estate plans that are tailored to their needs. Whether you are considering relocating or are simply concerned about your estate planning needs, The Manna Helmy Law Group is a sound choice.

Sources: Tepper’s most profitable 2015 trade may be moving to Miami, Bloomberg Business, Miles Weiss, March 16, 2016

New Jersey Department of Treasury, Inheritance and Estate Taxes Overview