Will NJ Demand Payment of Inheritance Tax From an Estate if the Beneficiary Only Has a Life Estate? 

HNWEstate Administration and Probate

The short answer is yes.  Surprised?  Don’t be; it’s taxaholic NJ at it again.

Under N.J.S.A. 54:36-1, when a person gives a life estate interest or a limited interest for a term of years, the interest is taxable by multiplying the value of the property at the date of death by the relevant life estate factor, as published by the US Decennial Life Tables worksheet. To get the life estate factor, you need to know if the person getting the life estate interest is male or female and his or her age. To calculate the taxable value, you multiply that according to his/her blood relationship (Class C or D). This example only applies to non-exempt beneficiaries.  Class A beneficiaries (children, parents, etc.) are exempt from the tax).  The value is the basis for the tax.

To discuss your NJ estate administration matter, please contact Fredrick P. Niemann, Esq. toll-free at (855) 376-5291 or email him at fniemann@hnlawfirm.com.  Please ask us about our video conferencing or telephone consultations if you are unable to come to our office.

Written by Stephen W. Kornas, Esq. of Hanlon Niemann & Wright

Previous PostNext Post