Legal Tip of the Week – 2/17/2017!
This week’s legal tip is about the New Jersey estate tax repeal. Some sources have postulated that the New Jersey estate tax may not end up being repealed in 2018 as originally planned. As you may already know, Governor Christie signed a bill to increase the NJ estate tax exemption from $675,000 to $2 million and to eliminate the estate tax completely in 2018. In lieu of the estate tax, the bill imposes a $0.23 gas tax. Last fall, however, New Jersey residents voted “yes” to allocating the funds from the gas tax solely on infrastructure, instead of adding them to the general budget. This means that in December of 2017, New Jersey will likely have a serious deficit. Sources are speculating that the government will then realize that the estate tax repeal may not make good financial sense.
So what does all of this mean for estate planning going forward? For anyone considering getting their estate affairs in order, it may be prudent to plan with the possibility that we could continue to have a $2 million exemption, and that the estate tax may not be repealed. Therefore, for those of you (especially unmarried individuals) with an estate over $2 million and assets that include significant life insurance policies, consider setting up a revocable living trust as well as an irrevocable life insurance trust. This will help not only minimize your estate taxes but also create a smooth probate-free flow of assets to your loved ones.