Questions For Nick (Minimize Tax)

My wife and I want our estate to pay as little New Jersey estate tax as possible. What can we do to accomplish this goal?

In New Jersey an unlimited amount of money can be devised to a surviving spouse without imposition of a New Jersey estate tax. However, this is not a good estate planning tool to rely on since upon the death of the second spouse, an unwelcome New Jersey estate tax could be waiting for your heirs if the estate exceeds $675,000.00.

One of the most effective methods of reducing or even eliminating the New Jersey estate tax is for a married couple to prepare Wills which each contain a credit shelter trust. Each spouse divides their assets in a roughly equal manner, while alive, and then upon the death of the first spouse, a certain amount of assets can be selected to pass to the trust. The surviving spouse receives all income generated from the trust during her lifetime and fairly liberal amounts of principal. Upon the death of the surviving spouse, the assets in the trust, as well as all appreciation of same between the date of death of spouse one and spouse two, will pass free of estate tax to your children.

The use of a credit shelter trust allows both spouses to maintain maximum control of their assets while alive, and also serves to increase the amount of monies that can pass to their children upon the death of the second person in the marriage.

Nicholas Giuditta is a trusts and estates attorney in Westfield. He prepares estate plans for high net worth individuals and regularly represents executors and administrators of estates.

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141 Elmer Street, Westfield, NJ 07090

Nicholas A. Giuditta, III, Attorney at Law

Phone: 908.232.2300

Fax: 908.232.9435