Scarinci Hollenbeck, LLC
The Firm
201-896-4100 info@sh-law.comFirm Insights
Affluent Urged to Focus on State Estate Taxes
Author: Scarinci Hollenbeck, LLC
Date: October 16, 2013
Key Contacts
Back
Many affluent Americans and business owners who may be subject to federal state estate taxes focus a great deal of attention on understanding their obligations under tax law, utilizing gift tax allowances, and establishing wealth management plans that will help lower their liability. However, a recent analysis indicates that too few individuals give the same attention to the estate taxes they may be required to pay by their state.
In a recent Wall Street Journal column, wealth manager Michael Foltz noted that after lawmakers raised the federal estate tax exemption to $5.25 million and announced that the exemption between spouses is portable, most households will not be required to pay federal estate taxes. However, some may fail to prepare themselves adequately for state estate taxes, which vary largely across the U.S. Currently, 21 states and the District of Columbia impose taxes on residents’ estates, and some are significantly higher than others and may carry top rates as high as 16 percent.
For instance, New York carries a $1 million exemption, whereas New Jersey’s exemption is only $675,000. This means that New York resident with a $5.25 million exemption would escape federal taxes, but be required to pay roughly $420,800 in estate taxes to the state, Forbes notes. In addition to estate taxes, six states levy an inheritance tax, the rate of which varies by who is inheriting the assets. For instance, Maryland imposes an estate tax of up to 16 percent above a $1 million exemption, and a 10 percent inheritance tax on every dollar left to a niece, nephew, or friend. However, no inheritance tax is levied against funds left to children, grandchildren, parents, or siblings.
It’s important that individuals understand all of the potential liabilities they may face – both local, state, and federal – when managing their wealth in order to establish a more comprehensive plan.
- Practices: Tax and Trusts & Estates, Sophisticated Estate Planning & Wealth Preservation
- Locations: Red Bank, NJ, New York City, Little Falls, NJ
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Related Posts
See all
When to Settle and When to Fight: A Litigator's Framework
Every lawsuit comes with a cost, and knowing when to settle a lawsuit is one of the most consequential decisions a business owner will face. Experienced litigators understand how to minimize cost and obtain certainty for their clients. For many business owners, the decision is viewed almost entirely through a financial lens: What will it cost […]
Author: Sean M. Pena
A Whistleblower Just Filed a Complaint Against Your Company: Here's What to Do Now
Few situations create more uncertainty than learning that an employee has filed a whistleblower complaint. Questions arise immediately: Is the allegation legitimate? Should the employee be placed on leave? Do we need to notify our insurance carrier? Are we now prevented from disciplining the employee if there are unrelated ongoing work related issues? There is […]
Author: Sean M. Pena
Assignment for the Benefit of Creditors: An Alternative to Bankruptcy for Distressed Businesses
When a business reaches the point where it can no longer service its debts or otherwise resolve its liabilities, management is often faced with a difficult question: is a bankruptcy filing necessary or is there another way to perform an orderly liquidation or sale of the business assets? While Chapters 7 and 11 of the […]
Author: John D. Giampolo
Breaking Down New Jersey’s “Mansion” Tax: What Buyers and Sellers Need to Know
For many years, the New Jersey Mansion Tax has been a significant consideration in high-value real estate transactions. Recent legislative changes, however, have substantially altered how the tax operates, including who is responsible for paying it and the amount owed in certain transactions. Whether you are purchasing, selling, or investing in New Jersey real estate, […]
Author: George McGowan
Estate Planning for Digital Assets Under New Jersey Law
As our personal and financial lives increasingly move online, estate planning must evolve to address a new category of property: digital assets. From email accounts and social media profiles to cryptocurrency and cloud-stored business records, these assets often carry both financial and sentimental value. Yet, without proper planning, they can become inaccessible—or even lost—upon incapacity […]
Author: Marc J. Comer
The Role of Representation and Warranty Insurance in M&A Transactions
In today’s mergers and acquisitions market, representation and warranty (R&W) insurance has become a common feature of deal negotiations. Once used primarily in larger transactions, R&W insurance is now frequently incorporated into middle-market deals as buyers and sellers look for efficient ways to allocate risk and close deals. When structured properly, R&W insurance can help […]
Author: George McGowan
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.