YOUNGER LAW NEWS: WILL THERE BE ESTATE TAX RELIEF FOR NEW JERSEY?
One of the articles in this month's ELDER LAW NEWS deals with problems that arise when estate plans are not updated. We have seen several estates in the past year where wills or trusts drafted 15-20 years ago made problematic what had been proper planning in years past.
The article shows why it is necessary for outdated provisions to be removed. In many cases, a much simpler disclaimer trust is a better choice than a mandatory credit shelter trust, giving the surviving spouse the option to do some post mortem estate planning based on what is best at the time the first spouse dies. I have written about this before and have encouraged this technique for a long time.
For about five years, we have been focusing more on the New Jersey Estate Tax, whose $675,000 exemption is the least taxpayer-friendly in the country. When the estate tax is combined with the inheritance tax, New Jersey has the worst death tax situation in the U.S.A.
There has been talk of modifying or repealing the estate tax, which has been driving New Jersey residents to become residents of other states. One of the impediments has been the fact that there has to be a source of revenue to make up for the loss of estate taxes. Because of the dire straits of the Transportation Tax Fund, which is about to run out of money, little has happened other than talk. The New Jersey Legislature has come up with bi-partisan legislation that would make New Jersey significantly more tax friendly to its residents. Unfortunately, the Governor has said he will veto the legislation because it does not go far enough.
More information will be available in the coming weeks. Stay tuned. I hope to have some updates for next month's newsletter.