Mullica Hill Estate Tax Planning Lawyer

Mullica Hill Estate Tax Planning Lawyer

It is not uncommon for estate planning to be one of the most overlooked legal areas of a person’s life. When a person passes away without one, their loved ones are then left to deal with the aftermath, which can become incredibly complex. Even when people do have an estate plan in place, they often do not consider all the important aspects of their plan. One of the most overlooked elements of estate plans is the tax consequences they hold for individuals.

In Mullica Hill, estate plans are governed by the tax laws of New Jersey. However, there are also federal laws that will govern any estate plan created in the city, as well. A Mullica Hill estate tax planning lawyer can not only help individuals create an estate plan, but will also advise on the tax implications so the worst consequences are avoided.

State Law on Estate Taxes

In Mullica Hill, as throughout the rest of New Jersey, all estates that include real or personal property are subject to an estate tax if the property has a value of at least $500. Any interest or income on that real or personal property is also subject to taxes, even if the assets are placed in a trust or will. When a person passes away without a will, the intestacy laws of the state will apply and real and personal property is still subject to taxation.

Sometimes, the property is transferred to an executor or trustee of the estate and that property often takes the place of commission. In these cases, the compensation must be considered reasonable by the courts. Any value of the property that exceeds what a court would consider reasonable is subject to taxes, as well. The Superior Court ultimately determines the amount of property that is considered reasonable when it takes the place of commission.

Beneficiaries of an estate plan are almost always expected to pay the inheritance tax outlined by state law. The only exception to this is when an estate plan indicates that the tax should be paid using another form of payment.

Property is often jointly owned and when that is the case, it is also subject to taxes in the event one of the joint owners passes away. Even then, there are still some exceptions. One of these exceptions is when the other surviving joint tenant is a domestic partner or spouse of the deceased. Additionally, if the surviving joint owner can prove that they were the sole owner of the property and that the deceased never owned it, the asset is not subject to taxes. This exception applies even if the joint owner is not a domestic partner or spouse of the deceased.

In New Jersey, there are many other exceptions to the laws of taxation, too. For example, when the property is transferred to a hospital, educational institution, or church, it is not subject to taxes. Any percentage of the estate transferred to beneficiaries, pensions, or retirement allowances from certain plans are also not subject to taxes.

The Intention of Estate Tax Laws

Both federal and state estate tax laws are put into place to ensure people pay the required amount of taxes and that they do not try to evade these requirements through inter vivos gifts, or any other manner. These gifts are transferred to another person while the legal owner is still alive, but they are deprived of enjoying the asset. These gifts are also sometimes used for a person to transfer the property during their lifetime but they retain ownership, which is not legal.

Estate tax law is incredibly complex. A court will still usually recognize a transfer made while a person is still alive if the retention of benefits to the grantor is not concerning the duration of the person’s life or when they have forfeited their right to the property being transferred. In these cases, the state inheritance tax is not usually applied.

Why Work with a Mullica Hill Estate Tax Planning Lawyer?

Taxes may seem inevitable to some, but that is fortunately not the case. Unnecessary taxation does happen either due to improper planning, lack of knowledge, or other reasons. When the proper steps are taken, the majority of an individual’s estate can be distributed to their beneficiaries and family members instead of local, state, and federal governments.

A Mullica Hill estate tax planning lawyer will protect an individual’s assets by drafting a solid estate plan that is not open to pointless taxation. An attorney will also create a thorough plan to make sure an individual’s estate remains protected even after their death. Some of the considerations a lawyer will consider are as follows:

• Federal income tax
• Federal estate tax
• Federal gift tax
• Federal capital gains tax
• New Jersey income tax
• New Jersey inheritance tax
• New Jersey estate tax

The Inheritance Tax in New Jersey

As in many other states, New Jersey places an inheritance tax on anyone who inherits real or tangible property within the state if it was owned by a New Jersey resident before their death. The inheritance tax law is also extremely complicated. Individuals who receive an inheritance are divided into different categories and the amount of tax they are required to pay will depend on the classification they fall into.

For example, spouses and lineal descendants of deceased individuals are considered Class A beneficiaries, and they are not required to pay any taxes on any inheritance they receive. Class C beneficiaries, on the other hand, include close relatives such as siblings and while they are given an exception of $25,000, anything after that amount is taxed.

Our Estate Tax Planning Lawyer in Mullica Hill Can Shield You Against Unnecessary Taxes

Federal and state tax laws are very complex and difficult for many people to understand. At Scott Counsel, P.C., our Mullica Hill estate tax planning lawyer knows the laws and can shield your loved ones from paying unnecessary taxes after you are gone. Call us today at (856) 672-7248 or contact us online to schedule a consultation and to learn more.