New Jersey and Pennsylvania are two of the only six states in the U.S. to collect inheritance tax. When imposing this tax, the government considers the value of the estate and the relationship of the person who died to the person who inherited his or her estate.
However, each of these states has different statutes regarding how and when inheritance tax is levied. Contact our Ocean City inheritance tax attorneys.
In New Jersey, the value of the estate must equal or exceed $500 for this tax to apply, but not all assets of the estate are subject to inheritance tax. In contrast to New Jersey estate tax that is paid from the estate before it is distributed, inheritance tax is paid by the estate's beneficiaries.
The spouse and children of the person who died are completely exempt from paying inheritance tax in New Jersey (but only the spouse is exempt in Pennsylvania). Other beneficiaries pay a tax that varies depending on his or her relationship with the decedent. The tax rate also changes depending on the value of the estate.
Pennsylvania Inheritance Tax Attorneys
Under Pennsylvania law, inheritance tax applies regardless of the value of the estate and also applies to gifts given prior to death. As in New Jersey, not all assets of the estate are subject to the inheritance tax.
Although the spouse and charity beneficiaries are exempt from paying inheritance tax, children of the decedent are not. Remaining beneficiaries, including children, parents and siblings pay a graduated tax rate on the inheritance.
Linwood Estate Planning Attorneys
Our attorneys have more than 25 years experience creating estate plans. We draft documents personally, optimizing every detail of your estate tax plan to suit your unique situation.
We will use our knowledge and experience to help your estate's beneficiaries pay as little New Jersey or Pennsylvania inheritance tax as possible. Contact Linwood estate planning lawyers to discuss the tax implications of your estate.