Moving to a different state isn’t just about a change of lifestyle – it also has far-reaching effects on your estate plan. While wills and living trusts should be valid across all states, the laws of each particular state can change particular aspects of estate planning. It’s important to update these documents as soon as you are able, as these differences can significantly change what you would like to achieve in terms of deciding inheritance, reducing taxes and even managing your medical directives.
Estate planning and moving to New Jersey
New Jersey is an equitable distribution state rather than a community of property state, which does affect estate planning with regards to particular processes such as divorce. Rather than splitting assets 50-50, assets will be evaluated and distributed in a manner seen as fair, but not necessarily equal. If you are moving from somewhere in a community of property state, it is important this change is addressed.
New Jersey also has its own additional estate tax which varies year by year. This year you will qualify for the state tax if the gross value of your estate exceeds $675,000. You will also qualify for the federal tax if the gross value of your estate exceeds $5,340,000. This gross value is inclusive of assets such as property, life insurance, IRA’s, bank accounts and investments so you can exceed the state exemption amount and pay around 10% of the estate value in tax. For people looking to keep as many of their assets as possible to support their family after their passing, it’s important you speak to an estate planning lawyer about implementing a trust that will significantly reduce estate taxes.
If you have an advanced health directive or want to create one, it’s important you speak to an attorney who can walk you through the legal allowances and restrictions set down by the state of New Jersey. This will guarantee your wishes are maintained rather than impeded by legal technicalities. For example, New Jersey state law allows you to create two types of advanced directives, the first being an instructive directive for the medical care and measures you would like to receive and the second a proxy directive which allows a specific person to make decisions on your behalf if you are unable.
In essence, reviewing your estate planning documentation is about guaranteeing your original wishes are adhered to as far as the laws of the state will allow. It insures your documentation is in order and that costly and time-consuming legal technicalities are avoided.