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New Jersey not one of the states lowering estate taxes

Unfortunately, it looks like New Jersey will not be one of the American states set to lower or even eliminate estate taxes next year. With its existing estate tax and inheritance tax of 9.5 to 18 percent on the high end, New Jersey residents will likely find no relief in the near future.

According to a news report in RecordOnline.com, four states are planning to either raise exemption amounts for estate taxes or eliminate these taxes altogether in 2015. These states are Tennessee with an exemption amount raise to $5 million; Maryland with an exemption level increase to $1.5 million; New York with an exemption raise to $3.125 million; and Minnesota with a hike to $1.5 million.

By comparison, New Jersey's estate tax exemption level is a mere $675,000, meaning people who are named as the beneficiary in wills will likely have their inheritances decreased regardless of the size of the estate. When you factor in the state's hefty 9.5 to 18 percent estate and inheritance tax rates, it looks fairly grim for New Jersey residents.

Why are other states lowering tax rates? It seems these states are interested in keeping its retired and aging residents firmly in place. By reducing or eliminating these taxes, there is a greater chance retirees will stay in their home states instead of moving to Florida. Incidentally, Florida imposes no state estate tax, enticing many people to head south for reasons other than warmer climates.

When it comes to making a decision about where to retire, it's always a good idea to consult a professional estate planning attorney who can help you create wills, trusts and other documents while advising you on the issues surrounding New Jersey's estate tax laws.

Source: RecordOnline.com, "Protecting your future: Trend among states to lower estate taxes" Bonnie Kraham, Nov. 20, 2014

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