People don’t like to think about dying. It’s only natural. But heirs of New Jersey residents who plan ahead will reap the benefits from their estate planning actions.
Most people know that it is important to have a will, but they may fail to update it regularly to account for changes in federal and state tax laws. For example, in 2016 the federal government is increasing the amount of the lifetime gift and estate tax exclusion by $20,000, to $5.45 million. This is $10.9 million per married couple, and when one spouse dies, provision can be made to pass the remaining balance of their exclusion to the surviving spouse. The annual amount a person can give tax-free to someone is $14,000 before it counts against the exclusion. There are, however, no limits on the amount that can be given to a spouse.
Many New Jersey residents may not have this kind of money. But a will ensures that what assets they do have will go to their heirs. Some states, however, do impose taxes on estates, so it is important to take this into consideration when doing estate planning. Should an estate be valued at more than $5.45 million, that amount is taxed at 40 percent by the federal government.
Estate planning can be complex. The more assets a person has, the more complicated this process can be. Besides wills, estate planning can include trusts, powers of attorney and guardianships of minor or disabled adult children and spouses. People want to do right by their heirs, and doing so may be made easier with the assistance of an estate planning attorney.