Legal Question in Wills and Trusts in New Jersey
NJ Estate Valuation Reduction with Gifts?
My 80 year old terminally ill mother is located in NJ as are her two sons who will split the estate. Depending upon valuation used for her home, her total estate may exceed the NJ estate tax threshold of $675k. In an effort to reduce the estate valuation can she?
1. Make cash gifts of $13k to her sons, and grandchildren in 2009 � do these need be added back to the estate valuation if made within 3 years of her death or is it just the amount that exceeds the federal exemption of $13k?
2. What if she made direct payments of College Tuition for grandchildren, or Medical expenses (medical insurance?) � should these too be added back to the estate for purposes of estate valuation.
3. If neither of these strategies are viable, are there any better alternatives to reduce the estate below $675.
2 Answers from Attorneys
Re: NJ Estate Valuation Reduction with Gifts?
Unless she has a history of annual gifts the use of gifts now might be subject to a look-back and inclusion. I am not sure and you were vague about why the estate might exceed the threshold. Have you considered as possible deductions commissions that could be paid to an Executor, attorney fees, plus the normal expenses for a funeral, final medical and other bills, real estate taxes and the like. If you would like to review this, contact me directly.
Re: NJ Estate Valuation Reduction with Gifts?
Unless Mom has a history of annual gifts, this might not work due to the look-back. There are other possibilities to consider. Have you factored funeral expenses, debts and final medical bills, possible Executor commissions and legal fees in your calculations. The gross estate may be over the limit, but the net after administration expenses, funeral and debts, may put you under. Contact me if you need more information or assistance.
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