Legal Question in Wills and Trusts in New Jersey

Re: Inheritance Tax in NJ (2)

The $11,000.00 limitation on annual gifts to any one individual or entity only applies to Federal estate tax which will not come into play because the estate won't come close to the minimum 1.5 Million dollar threshold. Those amounts will still be subject to NJ Inheritance tax unless your aunt lived for 3 years after they were made.

If an agent under a Power of Attorney transfers assets to himself as gifts he can almost guarantee an audit as well as scrutiny by any number of state and federal authorities especially if she eventually needs Medicaid assistance. Medicaid is well known for pursuing cases of dissipation of a patient's assets within the "Lookback" period which can be as long as 3 years (5 for trusts). Your aunt cannot sign because you said she was incompetent.

Your aunt's NJ Will would be valid in any state because she was legally domiciled in NJ at the time she signed it. If she moves to AZ, it would be better to have a Power of Attorney that you are certain complies with that state's requirements but again, the incompetency issue prevents that.

You seem to think that there must be SOME way you can avoid paying Inheritance Tax but under these circumstances, there simply isn't for the reason I stated previously. If it was as easy as you propose, everyone would do it and no tax would ever be collected.

Of course, you should specifically retain a NJ attorney who is familiar with probate law and give him/her all the facts but based on what you've said here, I'd advise being happy paying the tax and not having to worry about civil or criminal prosecution later.