NJ is #1! On "The Worst Places to Die" List

First PlaceSmartMoney just published "Estate Taxes: The Worst Places to Die" and New Jersey takes the number one spot.

16 states and Washington DC have an estate tax seperate from the federal estate tax (which has a current exemption amount of $5 million per person for deaths in 2011-2012).  The article specifies that these exemptions range from $338,333 for Ohio residents to $5 million for Hawaii and North Carolina residents:

* Three states have exemptions of less than $1 million (Ohio at $338,333; New Jersey at $675,000;
and Rhode Island at $850,000).
* Six states have $1 million exemptions (Maine, Maryland, Massachusetts, Minnesota, New York, and
Oregon), and so does D.C.
* Three states have $2 million exemptions (Illinois, Vermont, and Washington)
* Two states have $3.5 million exemptions (Connecticut and Delaware).
* Two states have $5 million exemptions (Hawaii and North Carolina).

The lowest tax rates are 7% (Ohio) and 12% (Connecticut). The highest is 19% (Washington). The other 13 states and D.C. all charge 16%.

6 states have an Inheritance Tax (a tax on specific assets passing to specific people), as follows:

The inheritance tax exemptions are zero or negligible--except in Tennessee which has a $1 million exemption.

The tax rates are 9.5% in Tennessee, 15% in Iowa and Pennsylvania, 16% in Kentucky, 18% in Nebraska, and 20% in Indiana.

2 states have an Estate Tax and an Inheritance Tax - Maryland, and ... you guessed it, New Jersey.

For anyone who lives or had property in the 22 States with estate or inheritance tax, the government may share in your wealth when you die.  You should become educated about what your state's transfer tax scheme is, as well as what planning might be done to minimize its impact.

Trackbacks (0) Links to blogs that reference this article Trackback URL
Comments (3) Read through and enter the discussion with the form at the end
SJ - February 22, 2011 4:06 PM

Every middle class person I know in NJ who has any kind of net worth is changing residency to a more tax favorable state for estate planning purposes. The tax the rich demagoguery produces less taxes not more, as people with money and capital flee New Jersey. It will continue until they stop the shameless middle class money grab and raise the exemption to a reasonable level.

spencer iowa real estate - February 24, 2011 4:58 AM

very informative and interesting blog.
Thanks for sharing:-)

sbruce45 - February 27, 2011 10:03 PM

Isn't this a little misleading. There is no inheritance tax for spouse, children, and more. Of course no inheritance tax for anyone is better, but it is misleading to put it so simply.

There really was no estate tax before the Fed was planning to drop its estate tax, I believe. At that time, probate was very easy and there really wasn't a reason for living trusts in NJ. Unfortunately, NJ decided to take advantage of the Fed confusion and institute the same old low exemption that the Fed used to have. Maybe NJ will one day raise the exemption if the Fed comes up with a stable estate tax with a higher exemption.

Post A Comment / Question Use this form to add a comment to this entry.

Remember personal info?