NJ Inheritance Tax

NJ Inheritance Tax
    The Transfer Inheritance Tax recognizes five beneficiary classes, as follows:
Class "A" - Father, mother, grandparents, spouse, child or children of the decedent, adopted child or children of the decedent, issue of any child or legally adopted child of the decedent and step-child of the decedent.
Class "B" - Eliminated by statute effective July 1, 1963.
Class "C" - Brother or sister of the decedent, including half brother and half sister, wife or widow of a son of the decedent, or husband or widower of a daughter of the decedent.
Class "D" - Every other transferee, distributee or beneficiary who is not included in Classes "A", "C" or "E".

Class "E" - The State of New Jersey or any political subdivision thereof, or any educational institution, church, hospital, orphan asylum, public library or Bible and tract society or to, for the use of or in trust for religious, charitable, benevolent, scientific, literary or educational purposes, including any institution instructing the blind in the use of dogs as guides, no part of the net earnings of which inures to the benefit of any private stockholder or other individual or corporation; provided, that the exemption does not extend to transfers of property to such educational institutions and organizations of other states, the District of Columbia, territories and foreign countries which do not grant an equal, and like
exemption on transfers of property for the benefit of such institutions and organizations of this State.

NOTES: If any beneficiary is claimed to be the mutually acknowledged child of the decedent, said claim should be set forth in the detailed manner prescribed under N.J.A.C. 18:26-2.6. For the purposes of the New Jersey Transfer Inheritance Tax an adopted child is accorded the same status as a natural child and, therefore, his relations are treated in the same manner as those of a natural child. (i.e. if the decedent's adopted son marries, his spouse is "the wife of a son of the decedent" and therefore a class "C"
beneficiary).

     A devise of real property to a husband and wife as "tenants by the entirety" provides each with a vested life estate, the remainder being contingent. See N.J.A.C. 18:26-8.12. The issue of stepchildren ARE Class "D" (NOT Class "A") beneficiaries.

     The following ARE Class "D" (NOT Class "C") beneficiaries: stepbrother or stepsister of the decedent, wife or widow of a stepchild of the decedent, husband or widower of a step-child of the decedent, wife or widow of a mutually acknowledged child of the decedent, and husband or widower of a mutually acknowledged child of the decedent. The fact that a beneficiary may be considered "nonprofit" by the Internal Revenue Service does not necessarily mean that it qualifies for exemption as a Class "E" beneficiary since the criteria are different.

TAX RATES
 Each class of beneficiary has its own separate tax rate.

EXEMPTIONS
1. The transfer of real and personal property in this State held by a husband and wife as "tenants by the entirety" to the surviving spouse is not taxable for New Jersey Inheritance Tax purposes.
2. The transfer of intangible personal property such as stocks, bonds, corporate securities, bank deposits and mortgages owned by a nonresident decedent is not subject to the New Jersey Inheritance Tax.
3. Any sum recovered under the New Jersey Death Act as compensation for wrongful death of a decedent is not subject to the New Jersey Inheritance Tax except as provided below:
a. Any sum recovered under the New Jersey Death Act representing damages sustained by a decedent between the date of injury and date of death, such as the expenses of care, nursing, medical attendance, hospital and other charges incident to the injury, including loss of earnings and pain and suffering are to be included in the decedent's estate.
........ more info at http://njprobate.blogspot.com/2014/01/nj-inheritance-tax.html
KENNETH VERCAMMEN & ASSOCIATES, PC
ATTORNEY AT LAW
2053 Woodbridge Ave.
Edison, NJ 08817
(Phone) 732-572-0500
(Fax)    732-572-0030