{"id":2412,"date":"2016-10-13T11:25:41","date_gmt":"2016-10-13T15:25:41","guid":{"rendered":"http:\/\/www.lindabury.com\/firm\/?p=2412"},"modified":"2025-12-31T14:31:31","modified_gmt":"2025-12-31T19:31:31","slug":"lifetime-gift-planning-new-jersey","status":"publish","type":"post","link":"https:\/\/www.lindabury.com\/firm\/insights\/lifetime-gift-planning-new-jersey.html","title":{"rendered":"Lifetime Gift Planning in New Jersey"},"content":{"rendered":"<p>New Jersey has been widely recognized as among the more onerous states in terms of transfers at death. While federal and state death tax laws have been loosened over the past many years so as to exempt more and more people from estate and inheritance taxes<a title=\"Jump to Footnotes\" href=\"#footnote\"><sup>1<\/sup><\/a>, New Jersey has not been among them. New Jersey\u2019s estate tax exemption stands at $675,000 per person. By contrast, the federal estate tax exemption is currently $5,450,000 per person<a title=\"Jump to Footnotes\" href=\"#footnote\"><sup>2<\/sup><\/a> ; the New York estate tax exemption is currently $4,187,500 (rising to the federal exemption level in 2019); the Connecticut estate tax exemption is $2-million; and Florida has no estate tax at all.<\/p>\n<p>The federal estate tax regimen encompasses both lifetime gifts and death-time transfers. The federal estate tax exemption is reduced by taxable gifts made during lifetime. For example, an individual making a taxable gift of $100,000 in 2016 would reduce his or her federal estate and gift tax exemption by that amount, leaving a remaining federal estate and gift tax exemption of $5,350,000. An individual making a taxable gift during lifetime does not incur a gift tax liability for federal purposes until the entire federal exemption is exhausted. In 2016, that means one would have to make taxable gifts in excess of $5,450,000 before a gift tax becomes payable. This unified estate and gift tax structure for federal purposes does not differentiate between lifetime and death-time transfers, and consequently for gifts of equal value up to the maximum federal exemption amount there is no intrinsic benefit of a lifetime gift over a death-time transfer<a title=\"Jump to Footnotes\" href=\"#footnote\"><sup>3<\/sup><\/a>.<\/p>\n<p>In contrast to the federal estate and gift tax regime, New Jersey imposes a tax only on death-time transfers. For policy reasons that are not entirely evident, New Jersey does not impose a tax on lifetime gifts<a title=\"Jump to Footnotes\" href=\"#footnote\"><sup>4<\/sup><\/a>. This anomaly between the federal and New Jersey tax structures offers a planning opportunity in a number of situations. An example will illustrate the point. Assume that an unmarried individual has a taxable estate with a value of $2-million and that the beneficiaries are children of the individual. Given the federal exemption of $5,450,000, there is no federal estate tax liability, regardless of the identity of the individual beneficiaries. For New Jersey death tax purposes, inasmuch as the beneficiaries are children of the individual, the New Jersey inheritance tax is inapplicable, and the only tax of concern is the New Jersey estate tax. The New Jersey estate tax on a taxable estate of $2-million is $99,600.<\/p>\n<div class=\"read_more_link\"><a href=\"https:\/\/www.lindabury.com\/firm\/insights\/lifetime-gift-planning-new-jersey.html\"  title=\"Continue Reading Lifetime Gift Planning in New Jersey\" class=\"more-link\">Continue Reading \u203a<\/a><\/div>\n","protected":false},"excerpt":{"rendered":"<p>New Jersey has been widely recognized as among the more onerous states in terms of transfers at death. While federal and state death tax laws have been loosened over the past many years so as to exempt more and more people from estate and inheritance taxes1, New Jersey has not been among them. New Jersey\u2019s [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[65,343],"tags":[],"coauthors":[139],"class_list":["post-2412","post","type-post","status-publish","format-standard","hentry","category-insights","category-wills-trusts-estates-insights"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Lifetime Gift Planning in New Jersey &#8212; October 13, 2016 &#8212; Lindabury, McCormick, Estabrook &amp; Cooper, P.C. 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