Legal Question in Wills and Trusts in New Jersey

Re: Estate Trust

This is not entirely accurate. You are cunfusing Federal rules on taxable estates with the NJ rules. Several years ago, when the Feds increased the size of non-taxable estates, NJ "froze" their taxes to an estate over $675,000, presuming that the beneficiaries are all Class "A" beneficiaries (immediate family - spouse, children, etc.). Taxes may be required if the beneficiaries are more remote relatives or unrelated on smaller estates. Further, you do not indicate if the estate consists of assets that might appreciate over time? If so, the $675,000 figure might be attained. Living trusts, if properly created, provide more benefits than merely saving estate taxes, so they could/should be considered even in estates the size of your parents. If you need more information, contact me directly.

Re: Estate Trust

The probate process in NJ is about as simple as it can be. Thus, the reasons to create a Trust in NJ should be for other reasons, such as to hold out-of-state real estate (such as FL - to avoid probate in that state); for privacy concerns (as trust agreements are not made public as Wills are); and to minimize taxes. The Federal Estate tax exemption amount is currently $2,000,000, is scheduled to increase to $3,500,000 on 1/1/09 and is projected to remain at that figure in an Obama administration. The New Jersey Estate tax exemption amount is $675,000. I am not sure why someone gave you the figure of $2,500,000. The NJ Inheritance Tax system imposes no tax on bequests to spouses or children (or grandchildren, or stepchildren).

Re: Estate Trust

There are many good reasons to set up trusts, and only one of them is to avoid probate and the resulting taxes.

Trusts shelter assets, and that is especially important in instances where real property is "owned" without any mortgage. Trusts are relatively inexpensive and flexible.

Mike