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Explaining Inheritance Tax Laws

New Jersey and Pennsylvania are two of 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 their estate.

However, each of these states has different statutes regarding how and when inheritance tax is levied. At Rice & Quattrone, PC, our attorneys are well-versed in the statutes that affect your legacy and your loved ones. Call 609-398-3447 or 856-673-0048 to reach one of our skilled New Jersey and Pennsylvania attorneys and discuss your concerns.

New Jersey Inheritance Taxes

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. Gifts made prior to death may also be included in the taxable estate. Depending on the governing document (usually the Will) the tax may be payable either from the estate before it is distributed, or by the estate’s beneficiaries.

The spouse and children of the person who died, as well as charitable beneficiaries, 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 their relationship with the decedent. The tax rate also changes depending on the value of the estate.

Pennsylvania Inheritance Taxes

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 charitable 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.

Begin Developing Your Estate Tax Strategy Today

Our attorneys have more than 30 years of experience creating estate plans. We draft documents personally, optimizing every detail of your estate tax plan to suit your unique situation. We are proud to offer exceptional representation to clients throughout New Jersey and the greater Philadelphia metro area.

We will use our knowledge and experience to help your estate’s beneficiaries pay as little New Jersey or Pennsylvania inheritance tax as possible. To begin the conversation, please email our contact form or call us in Linwood at 609-398-3447 or Cherry Hill at 856-673-0048.