The estate tax, also commonly referred to as the "death tax," is a popular subject among many in New Jersey, even though very few Americans are at risk of being subjected to the tax. People tend to hold strong opinions on the matter, and it is a prime example of a topic that tends to reveal one's political leanings. The estate tax has once again become a topic of conversation due to a recent House vote supporting the repeal of the tax.
In decades past, individuals who were seeking estate planning guidance were told that there are three basic places where one can leave their assets upon death: family, charity or taxes. This approach defined the overall estate planning process for many years, but it does little to meet the needs of today's clients. Many New Jersey residents want to make their estate plan about more than the simple passing of assets to family members and reducing their estate tax burden.
Many New Jersey residents have worked hard to build a strong base of wealth. Retaining as much of that wealth as possible becomes a priority for many families. Understanding the proper steps required to do so can be a challenge, as there are a wide range of rules in place that must be carefully adhered to in order to achieve a favorable result. By working with an attorney, individuals and families can create an estate tax planning strategy that meets their needs.
Each year, the IRS announces how much the estate and gift tax exemptions will be for the following year. Recently, the announcement was made that the estate tax exemption will rise to $5.43 million per person, and the annual gift tax exemption remains at $14,000 for 2015. The $90,000 increase could allow a New Jersey resident to do more gifting during his or her lifetime.
When it comes to estate planning, one of the most important aspects which most people pay attention to is avoiding unnecessary tax liabilities. This has been an especially important concern for many people in New Jersey, since it is one of only two states in which people are required to pay the estate tax as well as the inheritance tax. However, some state lawmakers are now looking to change this situation.
When a New Jersey resident dies, his or her estate is subject to taxation. Effectively reducing these taxes is an integral part of estate planning. There are a number of ways to limit the taxes that will come with the transfer of assets following a death. Life insurance is one estate tax planning tool that can be used to ensure that loved ones have the means to pay any remaining taxes.
Tax time is over for the year, and many New Jersey residents are more than happy to put it behind them for the rest of the year. However, this could be the perfect time to conduct some tax strategizing. Everyone could benefit from estate tax planning as well.
It is not unusual for someone in New Jersey to become the inheritor of real estate or other related assets. In fact, it is quite common that, when someone dies, their property is inherited by someone else. In this case, there are inheritance tax realities that should be considered ahead of time by all involved parties. After all, inheritance tax issues will affect the inheritor in a number of ways.
The federal estate tax exemption for 2014 is an impressive $5.34 million. Many New Jersey residents believe their estate plans can now be simplified since the majority of people's estates will never reach that level. People believe their estate tax exposure is small, if anything.
When it comes to estate planning in New Jersey, many tasks, concerns and considerations make up the foundation of a great plan. One issue that may be overlooked, however, is estate tax planning, which is a very real concern for individuals planning their estate and their loved ones. When there are multiple beneficiaries collecting inheritances from different sources, planning the big picture, including taxes, becomes a very important part of any estate plan.