10 Estate Planning Ideas for Single moms

10 Estate Planning Ideas for Single moms

By Kenneth A. Vercammen, Esq
There may come a time when a parent is unable, due to physical or mental incapacity, to take care of her minor children. If a parent dies, the minor children will need a guardian. In these circumstances, those caring for the children, as well as the courts will need direction. By writing and executing a Will, which includes instructions on guardianship one may select someone, either individually or jointly, with the legal authority to act for minor children and assume control over the assets of the children. Estate planning, which includes the execution of a Will, is just as important for moms with minor children as they are for senior citizens.

Where there’s No Will …

If you do not write a Will, the State has already written one for you. Your assets go to whoever a state law says receives the assets, or to the government itself! A Will should be a statement to the things you truly care about: your children, your parents, your friends, your Church and charities. You can consider remembering your church or school.

As average Americans, we work 80,000 hours in a lifetime, or 45 to 55 years. In spite of all our resources and the assets we earn during our lifetime, the vast majority of Americans do not take the time to create the legal instructions to guide the court or a guardian upon their death. National statistics indicate that more than 50% of Americans die without leaving a will. In the absence of a will or other legal arrangement to distribute property at death, the State must step in to administer the estate and decide who gets custody of your children and handles your money. This process is called the law of intestacy. The result can be lengthy delays in the distribution of your estate, court battles between relatives and your children being raised by someone you do not favor. Without a Will, your family will have to pay substantial costs for accountants, attorneys, bonding companies and probate fees.

If You Have No Will:

If you leave no Will or your Will is declared invalid because it was improperly prepared or is not admissible to probate:

1. People you dislike or people who dislike and ignore you may get some of your assets.
2. State law determines who gets assets, not you
3. Additional expenses will be incurred and extra work will be required to qualify an administrator-Surety Bond, additional costs and legal fees
4. You Lose the opportunity to try to reduce Estate Tax, State inheritance taxes and Federal estate taxes
5. A Judge determines who gets custody of children. A greedy brother or crazy mother in law could ask the court for custody.
6. It probably will cause fights and lawsuits within your family
7. The procedure to distribute assets becomes more complicated
8. The father of your children may try to control the assets of your children and not properly spend the money
In planning, make sure your assets go to your loved ones or favorite charity, not an "ex". Therefore, you may wish to do the following:

1) Have an Elder Law attorney prepare a Will to distribute your assets to the people you care about the most. If you already have a Will, prepare a new Will and have the old Will revoked. (Your estate planning attorney will explain this to you.)
2) Prepare a Power of Attorney to select someone to handle your finances if you become disabled. Have your old power of attorney revoked.
3) Select the correct beneficiary on assets you may own, such as stocks, bank accounts, IRA, and other financial assets.
4) Change your beneficiary under your own life insurance, whether whole life insurance or term insurance.
5) Contact your employer's human resources and change the beneficiary on life insurance, pension, stock options or other employee benefits. Note that if you are not yet divorced, your spouse may have to sign a written waiver permitting you to change beneficiaries.
6) If you are not divorced or separated from the father, keep your personal papers at a location where an ex-spouse or the child's parent can't destroy them.
7) If you have minor children, nominate someone under a Will to serve as guardian to the children. Although the surviving parent obviously has first right of custody of children, they may not even want custody.
8) Make sure the trustee for any funds designated for your children is the "right" trustee.
9) Have your attorney prepare a prenuptial agreement, if you decide to get married, so your children can inherit your assets. ) If you get married, have a formal prenuptial agreement prepared by an attorney so your children, not new spouse, receives your assets if you pass away.
10) In New Jersey, if you are still married and living with a spouse, under certain instances the surviving spouse has a right to "elect against the will". The disinherited spouse may like to elect against the Will and try to obtain one third of the estate. Your attorney can explain how you can protect yourself and your children.

ESTATE PLANNING TO PROTECT YOUR CHILDREN

Guardians
Most individuals appoint the parent to act as Guardian of the person and property of their minor children. It is suggested that your Will include a clause which provides that in the event the father predeceases you, or is unsuitable or ceases to act as Guardian of the person and property of your minor children, you appoint a trusted family member or close friend to act as successor Guardian of the person and property of your minor children.

Trustee
Select a trusted person, a close relative or friends, who will invest and hold your children's money. In your Will you can instruct the Trustee to apply amounts of income and principal as they, in their sole discretion, deem proper for the health, maintenance, education, welfare, or support of your children or other minors. Direct that the trustee shall accumulate any income not needed for the above purposes, paying and transferring the portion held in trust to the beneficiary upon his or her attaining the age of majority or whichever age you select.

Children born after you sign the Will
Many people direct that the provisions of their Will also applies to afterborn children. Accordingly, if you have any additional children subsequent to the execution of this Will, then wherever you have designated only your named children, you intend that all of your children shall share equally in the relevant provisions of your Will.
In addition to having a formal Last Will and Testament individuals are encouraged to have a Power of Attorney and also Living Will. Moreover, we also recommend they plan ahead and write messages to their family and anticipated executor detailing their specific desires regarding funeral and burial. Written instructions to your family and executor containing information and guidance will minimize uncertainty, confusion, and possible oversights following your death.

Conclusion
While the preceding article contains possible items to be discussed with your family, attorney and executor, the article is by no means exhaustive. A number of these items may not be applicable in your situation, and probably there are many others that are applicable. The essential element is to spend some time now considering what you should tell those most closely associated with you to facilitate their handling of your affairs upon your death.
About the Author:

Kenneth Vercammen is a Litigation Attorney in Edison, NJ, approximately 19 miles north of Princeton. He often lectures for the American Bar Association and New Jersey State Bar Association on personal injury, criminal / municipal court law and practices to improve service to clients. He has published 125 articles in national and New Jersey publications on legal topics. He has served as a Special Acting Prosecutor in seven different cities and towns in New Jersey. He has spoken on Wills and Elder law on numerous occasions to the Adult Community Schools in Metuchen, Sayreville, Old Bridge, South Brunswick and Edison/Clara Barton Seniors and Perth Amboy Seniors.
In his private practice, he has devoted a substantial portion of his professional time to the preparation and trial of litigated matters. He has appeared in Courts throughout New Jersey several times each week on many personal injury matters, Municipal Court trials, arbitration hearings and contested hearings.
He is also a popular speaker for the American Bar Association's General Practice Section and Law Practice Management Section.
Since 1985, his primary concentration has been on litigation matters. Mr. Vercammen gained other legal experiences as the Confidential Law Clerk to the Court of Appeals of Maryland (Supreme Court), with the Delaware County, PA District Attorney Office handling Probable Cause Hearings, Middlesex County Probation Dept as a Probation Officer, and an Executive Assistant to Scranton District Magistrate, Thomas Hart, in Scranton, PA.
Call our office to schedule a confidential appointment 732-572-0500

KENNETH VERCAMMEN & ASSOCIATES, PC
ATTORNEY AT LAW
2053 Woodbridge Ave.
Edison, NJ 08817
(Phone) 732-572-0500
(Fax) 732-572-0030
website: www.njlaws.com

East Brunswick WILLS, PROBATE AND ELDER LAW- Adult and Community Education Monday March 8, 2010 7 - 8:30 P.M.

WILLS, PROBATE AND ELDER LAW- Adult and Community Education
WHEN: Monday March 8, 2010 7 - 8:30 P.M.

East Brunswick Adult & Community Education Program
East Brunswick High School, 380 Cranbury Rd
Fee: $29
For additional information, call the East Brunswick Adult Education Office for registration information 732- 613-6989

Instructor: Kenneth Vercammen, Esq. of Edison
(Co-Author- NJ Elder Law & Probate)
COMPLIMENTARY MATERIAL: Brochures on Wills, “Probate and Administration of an Estate”, Power of Attorney, Living Wills, Real Estate Sales for Seniors, and Trusts.

You don’t have to be wealthy or near death to do some thinking about a will. Here is your opportunity to listen to an experienced attorney who will discuss how to distribute your property as you wish and avoid many rigid provisions of the state law. Topics covered by author of “Answer to questions about Probate” will include: Wills, revocable trusts, irrevocable trusts, power of attorney, living will, long term care insurance, reverse mortgage, plus the opportunity to ask questions.
Here is your opportunity to listen to an experienced attorney who will answer questions how to distribute your property and avoid many rigid provisions of state law. For more information on Elder law, visit the Website www.CentralJerseyElderLaw.com. You can also subscribe to the free email Elder Law newsletter by visiting the website, or sending an email to Kenv@njlaws.com.
For additional information, call the East Brunswick Adult Education Office for registration information 732- 613-6989
KENNETH VERCAMMEN & ASSOCIATES, PC
ATTORNEY AT LAW
2053 Woodbridge Ave.
Edison, NJ 08817
(Phone) 732-572-0500
(Fax) 732-572-0030
website: www.njlaws.com

Widow's Rights

If the husband dies without a Will, the estate is subject to Intestacy.

Intestacy is the condition of the estate of a person who dies owning property greater than the sum of his or her enforceable debts and funeral expenses without having made a valid will or other binding declaration; alternatively where such a will or declaration has been made, but only applies to part of the estate, the remaining estate forms the "Intestate Estate". Intestacy law, also referred to as the law of descent and distribution or intestate succession statutes, refers to the body of common law that determines who is entitled to the property from the estate under the rules of inheritance. See http://en.wikipedia.org/wiki/Intestacy

IF A HUSBAND DIES WITHOUT A LEAVING A VALID WILL:
Survivors (Heirs)
New (2004) Uniform Probate Code (UPC)

Survivors (Heirs): Spouse and parent(s), but no children
New (2004) Uniform Probate Code (UPC):
Spouse: the first 25% (but not less than $50,000 nor more than $200,000) plus three fourths of the balance
Parent(s): All other estate assets

Survivors (Heirs): Spouse and children of Decedent, all of whom are also children of spouse (and spouse has no children by any other relationship)
New (2004) Uniform Probate Code (UPC):
Spouse: 100% of estate Children: nothing

Survivors (Heirs): Spouse and children of Decedent, some of whom are not children of spouse
New (2004) Uniform Probate Code (UPC):
Spouse: the first 25% (but not less than $50,000 nor more than $200,000) plus one half of the balance
Children of the Decedent: all other estate assets

Survivors (Heirs): Spouse and children of Decedent, all of whom are also children of spouse (and spouse has children by another relationship)
New (2004) Uniform Probate Code (UPC):
Spouse: the first 25% (but not less than $50,000 nor more than $200,000) plus one half of the balance
Children of the Decedent: all other estate assets

Survivors (Heirs): Spouse and stepchildren (children of spouse who are not Decedent's children)

New (2004) Uniform Probate Code (UPC):
Spouse: 100% of estate
Stepchildren: nothing


ELECTIVE SHARE OF SPOUSE IF WIFE IS NOT GIVEN ASSETS IN THE WILL

What is my share of my spouse's estate if I elect to take against the Will of my deceased spouse?
In general, a surviving spouse dissatisfied with his or her share under the Will of the deceased spouse may renounce the Will and elect to take his or her statutory share of the testator’s entire estate. The surviving spouse is entitled to one-third of the estate provided that at the time of death, the surviving spouse and decedent had not been living separate and apart in different habitations. Generally, the surviving spouse must elect to take his/her elective share by filing a complaint within six months after the appointment of a personal representative of the decedent's estate.
Whether to elect to take against a Will is a decision that cannot be made without comprehensive information regarding the affairs of the spouses. This is not a matter for self-help and referral to an attorney familiar with estate administration is normally required.

NJSA 3B:8-1
What is my share of my spouse's estate if I elect to take against the Will of my deceased spouse?
In general, a surviving spouse dissatisfied with his or her share under the Will of the deceased spouse may renounce the Will and elect to take his or her statutory share of the testator's entire estate. The surviving spouse is entitled to one-third of the estate provided that at the time of death, the surviving spouse and decedent had not been living separate and apart in different habitations. Generally, the surviving spouse must elect to take his/her elective share by filing a complaint within six months after the appointment of a personal representative of the decedent's estate.
Whether to elect to take against a Will is a decision that cannot be made without comprehensive information regarding the affairs of the spouses. This is not a matter for self-help and referral to an attorney familiar with estate administration is normally required.
The following is the revised New Jersey Law on Elective share of surviving spouse
_NJSA 3B:8-1 Elective share of surviving spouse or domestic partner of person dying domiciled in this State; conditions.
_ If a married person or person in a domestic partnership dies domiciled in this State, on or after May 28, 1980, the surviving spouse or domestic partner has a right of election to take an elective share of one-third of the augmented estate under the limitations and conditions hereinafter stated, provided that at the time of death the decedent and the surviving spouse or domestic partner had not been living separate and apart in different habitations or had not ceased to cohabit as man and wife, either as the result of judgment of divorce from bed and board or under circumstances which would have given rise to a cause of action for divorce or nullity of marriage to a decedent prior to his death under the laws of this State.
_3B:8-2. Elective share of surviving spouse or domestic partner of person dying not domiciled in this State.
If a married person or person in a domestic partnership not domiciled in this State dies, the right, if any, of the surviving spouse or domestic partner to take an elective share in property in this State is governed by the law of the decedent's domicile at death.
_3B:8-3. Meaning of "augmented estate."
The "augmented estate" means the estate reduced by funeral and administration expenses, and enforceable claims, to which is added the value of property transferred by the decedent at any time during marriage, or during a domestic partnership, to or for the benefit of any person other than the surviving spouse or domestic partner, to the extent that the decedent did not receive adequate and full consideration in money or money's worth for the transfer, if the transfer is of any of the following types:
a. Any transfer made after May 28, 1980, under which the decedent retained at the time of his death the possession or enjoyment of, or right to income from, the property;
b. Any transfer made after May 28, 1980, to the extent that the decedent retained at the time of his death a power, either alone or in conjunction with any other person, to revoke or to consume, invade or dispose of the principal for his own benefit;
c. Any transfer made after May 28, 1980, whereby property is held at the time of decedent's death by decedent and another with right of survivorship;
d. Any transfer made, after May 28, 1980, if made within 2 years of death of the decedent, to the extent that the aggregate transfers to any one donee in either of the years exceed $3,000.00.
3B:8-4. Valuing property transferred Property transferred in the manner set forth in N.J.S. 3B:8-3 is valued as of the decedent's death except that property given irrevocably to a donee during the lifetime of the decedent is valued as of the date the donee came into possession or enjoyment of the property if that occurs first.
_3B:8-5. Transfers excluded.
Any transfer of property shall be excluded from the augmented estate under N.J.S. 3B:8-3, if made with the written consent or joinder of the surviving spouse or domestic partner. There shall also be excluded from the augmented estate any life insurance, accident insurance, joint annuity or pension payable to a person other than the surviving spouse or domestic partner.
_3B:8-6. Other property to be included in augmented estate.
There shall also be included in the augmented estate:
a. The value of property owned by the surviving spouse or domestic partner at the time of, or as a result of, the decedent's death to the extent that the property is derived from the decedent by means other than by testate or intestate succession without a full consideration in money or money's worth; and
b. The value of the property described in subsection a. hereof which has been transferred by the surviving spouse or domestic partner at any time during marriage or domestic partnership without a full consideration in money or money's worth to any person other than the decedent which would have been includable in the spouse's or domestic partner's augmented estate if the surviving spouse or domestic partner had predeceased the decedent.
Income earned by included property prior to the decedent's death is not treated as property derived from the decedent.
_3B:8-7. Property derived from decedent.
For the purposes of N.J.S. 3B:8-6, property derived from the decedent includes, but is not limited to, any beneficial interest of the surviving spouse or domestic partner in a trust created by the decedent during his lifetime, any property appointed to the spouse or domestic partner by the decedent's exercise of a general or special power of appointment also exercisable in favor of others than the spouse or domestic partner, any proceeds of insurance, including accidental death benefits on the life of the decedent attributable to premiums paid by him, any lump sum immediately payable and the commuted value of the proceeds of annuity contracts under which the decedent was the primary annuitant attributable to premiums paid by him, the commuted value of amounts payable after the decedent's death under any public or private pension, disability compensation, death benefit or retirement plan, exclusive of the Federal Social Security system, by reason of service performed or disabilities incurred by the decedent, the value of the share of the surviving spouse or domestic partner resulting from rights in community property acquired in any other state formerly owned with the decedent and the value of any rights of dower and curtesy. Premiums paid by the decedent's employer, his partner, a partnership of which he was a member, or his creditors, are deemed to have been paid by the decedent.
_3B:8-8. Valuation of property derived from decedent.
For the purposes of valuing property derived from the decedent as provided in N.J.S. 3B:8-6:
a. Property owned by the spouse or domestic partner at the decedent's death is valued as of the date of decedent's death; and
b. Property transferred by the spouse or domestic partner is valued at the time the transfer became irrevocable, or at the decedent's death, whichever occurs first.
3B:8-9. Presumption as to property owned or previously transferred by spouse or domestic partner at decedent's death.
Property owned by the surviving spouse or domestic partner as of the decedent's death, or previously transferred by the surviving spouse or domestic partner, is presumed to have been derived from the decedent except to the extent that any party in interest establishes that it was derived from another source.
_3B:8-10. Waiving right to an elective share.
The right of election of a surviving spouse or domestic partner and the rights of the surviving spouse or domestic partner may be waived, wholly or partially, before or after marriage before, on or after May 28, 1980, by a written contract, agreement or waiver, signed by the party waiving after fair disclosure. Unless it provides to the contrary, a waiver of "all rights" (or equivalent language) in the property or estate of a present or prospective spouse or domestic partner or a complete property settlement entered into after or in anticipation of separation, divorce or termination of a domestic partnership is a waiver of all rights to an elective share by each spouse or domestic partner in the property of the other and a renunciation by each of all benefits which would otherwise pass to him from the other by intestate succession or by virtue of the provisions of any Will executed before the waiver or property settlement.
3B:8-11. Who may exercise the right to take an elective share.
The right of election to take an elective share by a surviving spouse or domestic partner may be exercised only during his lifetime. In the case of a surviving spouse or domestic partner for whom the court has appointed a guardian to manage his estate, the right of election may be exercised only by order of the court making the appointment after finding that the election is necessary to provide adequate support of the surviving spouse or domestic partner during his probable life expectancy.
3B:8-12. Filing complaint for elective share; extension of time.
The surviving spouse or domestic partner may elect to take his elective share in the augmented estate by filing a complaint in the Superior Court within 6 months after the appointment of a personal representative of the decedent's estate. The court may, before the time for election has expired and upon good cause shown by the surviving spouse or domestic partner, extend the time for election upon notice to persons interested in the estate and to distributees and recipients of portions of the augmented estate whose interests will be adversely affected by the taking of the elective share.
3B:8-13. Notice of hearing.
The surviving spouse or domestic partner shall give notice of the time and place set for hearing to persons interested in the estate and to the distributees and recipients of portions of the augmented estate whose interests will be adversely affected by the taking of the elective share.
3B:8-14 Withdrawal of demand for an elective share.
_The surviving spouse or domestic partner may withdraw his demand for an elective share at any time before entry of a final judgment by the court.
3B:8-15. Fixing amount of elective share; payment of elective share The court shall determine the amount of the elective share and shall order its payment from the assets of the augmented estate or by contribution as appears appropriate in the manner as hereinafter set forth in this chapter. If it appears that a fund or property included in the augmented estate has not come into the possession of the personal representative, or has been distributed by the personal representative, the court nevertheless shall fix the liability of any person who has any interest in the fund or property or who has possession thereof, whether as trustee or otherwise. The proceeding may be maintained against fewer than all persons against whom relief could be sought, but no person is subject to contribution in any greater amount than he would have been if relief had been secured against all persons subject to contribution.
_3B:8-16. Enforcing judgment The judgment of the court made pursuant to N.J.S. 3B:8-15 may be enforced as other judgments are enforced by law.
_3B:8-17. Value of surviving spouse's or domestic partner's interest in any life estate. In an action for an elective share, the electing spouse's or domestic partner's total or proportional beneficial interest in any life estate in real or personal property or in any trust shall be valued at one-half of the total value of the property or trust or of the portion of the property or trust subject to the life estate.
_3B:8-18. Satisfaction of elective share.
The amount of the surviving spouse's or domestic partner's elective share shall be satisfied by applying:
a. The value of all property, estate or interest therein, owned by the surviving spouse or domestic partner in his own right at the time of the decedent's death from whatever source acquired, or succeeded to by the surviving spouse or domestic partner as a result of decedent's death notwithstanding that the property, estate or interest or part thereof, succeeded to by the surviving spouse or domestic partner as the result of decedent's death has been renounced by the surviving spouse or domestic partner;
b. The value of the property described in subsection b. of N.J.S. 3B:8-6, and
c. The remaining property of the augmented estate is so applied that liability for the balance of the elective share of the surviving spouse or domestic partner is equitably apportioned among the recipients of the augmented estate in proportion to the value of their interests therein.
_3B:8-19. Persons subject to contribution.
More info at: http://www.centraljerseyelderlaw.com/ElectiveShare3B8-1.html

Widow's Rights

Seminar 2010 update Wills and Estate Planning

Seminar 2010 update Wills and Estate Planning

WHEN: Wednesday January 13, 2010 12:15-1:00 PM
also Thursday, January 14 5:45-7pm

WHERE: Law Office of Kenneth Vercammen, 2053 Woodbridge Ave, 2nd floor, Edison, NJ 08817

Invited: Clients, CPA's, Financial Planners, Insurance Producers, Nursing Home Administrators, Hospital and Nursing Home Social Workers, Medicaid Workers, Office on Aging Personnel, Senior Club Presidents, and Accountants
Estate Planning Ideas for Professionals and People who advise Seniors

The cost for this program previously at Middlesex County College was $29.00. If you email back prior to December 31 you can attend for free.

COST: Free if you pre-register. This program is limited to 15 people
Complimentary Sandwiches to pre-registered persons at 12:10 at Jan 13 program

SPEAKER: Kenneth Vercammen, Esq.
(Author- Answers to Questions About Probate)
The new NJ Probate Law made a number of substantial changes in Probate and the administration of estates and trusts in New Jersey.
Main Topics:
1. The New Probate Law and preparation of Wills
2. 2010 increases in Federal Estate and Gift Tax exemption
3. NJ Inheritance tax $675,000
4. Power of Attorney
5. Living Will
6. Administering the Estate/ Probate/Surrogate
7. Question and Answer

COMPLIMENTARY MATERIAL: Brochures on Wills, "Answers to Questions about Probate" and Administration of an Estate, Power of Attorney, Living Wills, Real Estate Sales for Seniors, and Trusts.
Co-Sponsor: Middlesex County Estate Planning Council

To attend or for Information: Mike McDonald 732-572-0500
or email kenvnjlaws@verizon.net

Can’t attend? We can email you materials
Send email to kenvnjlaws@verizon.net

Our Summer 2009 NJ Probate Email Newsletter discussed increased duties of the Executor or Administrator. The email newsletter also discussed how the revised NJ Probate Law makes a number of substantial changes in Probate and the administration of estates and trusts in New Jersey. If you send us your e-mail address we can provide you with a Free report on the changes in the law which may affect you. We also recently established the NJ Elder Law blog at http://elder-law.blogspot.com.
Website www.njlaws.com now provides Legal Information on Probate and Elder Law.
Very truly yours,

KENNETH VERCAMMEN
Chair ABA Elder Law Committee, Solo & Small Firm Division
To receive the njlaws Free Legal newsletter via email with Estate Administration & Probate information, email us at kenvnjlaws@verizon.net or fax us your email address.
Fax 732-572-0030
We send the newsletter via email only.
Email address: __________________________

Instructions and text for Transfer Inheritance And Estate Tax and SCHEDULES New Jersey Division of Taxation

Instructions and text for Transfer Inheritance
And Estate Tax and SCHEDULES
New Jersey Division of Taxation
POBox 249
Trenton, New Jersey 08695-0249
(609) 292-5033
IT-R
Inheritance Tax
SCHEDULES
(10-09)
First $700,000 15%
Over $700,000 16%
CLASS “D” TRANSFEREES IN ESTATES OFDECEDENTS
DYINGON OR AFTER 3-29-62
If less than $500: no tax
If $500 or more: no exemption
CLASS “A” TRANSFEREES ARE ENTIRELYEXEMPT
IN ESTATES OFDECEDENTS DYINGON OR AFTER JULY1, 1988
Page 4
Exempt
11%
13%
14%
16%
First $ 25,000
Next 1,075,000
Next 300,000
Next 300,000
Over 1,700,000
Class “C” TRANSFEREES IN ESTATES OFDECEDENTS
DYINGON OR AFTER 7/1/88
Affiant says, under penalty of perjury, “I declare that I have examined this return and all accompanying schedules and to the best of my knowledge and belief, it is true, correct
and complete.” I hereby authorize the party(s) set forth above to act as the estate’s representative, to receive confidential information, and to make presentations on behalf
of the estate.
Subscribed and sworn before me
this _____________________ day of ____________________________, ______.
__________________________________________________________________
Official Title (Notarized)
THIS FORM MAYBE REPRODUCED
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STATE OFNEWJERSEY
Inheritance Tax Return
RESIDENTDECEDENT
(Instructions on reverse side)
IT-R(10-09)
(67) For Division Use Only
Transfer Inheritance Tax
POBox 249
Trenton, NJ 08695-0249
Decedent’s Name________________________________________________________ Decedent’s S.S. No. ____________/__________/____________
(Last) (First) (Middle)
Date of Death (mm/dd/yy) _________/_______/_________ County of Residence _______________________________ Testate

NEWJERSEYTRANSFER INHERITANCE TAX instructions and ESTATE TAX GENERAL

NEWJERSEYTRANSFER INHERITANCE TAX instructions and ESTATE TAX
GENERAL
New Jersey has had a Transfer Inheritance Tax since 1892 when a 5% tax was imposed on property transferred from a decedent
to a beneficiary. Currently, the law imposes a graduated Transfer Inheritance Tax ranging from 11% to 16% on the transfer of real and
personal property with a value of $500.00 or more to certain beneficiaries.
The Transfer Inheritance Tax recognizes five beneficiary
classes, as follows:
Class “A” - Father, mother, grandparents, spouse/civil union
partner (after 2/19/07), domestic partner (after 7/10/04), 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/civil union partner (after 2/19/07) or widow/
surviving civil union partner (after 2/19/07) of a son of the
decedent, or husband/civil union partner (after 2/19/07) or
widower/surviving civil union partner (after 2/19/07) 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/enters into
a civil union, his spouse/civil union partner is “the wife/civil union
partner of a son of the decedent” and therefore a class “C”
beneficiary).
The offspring of a biological parent conceived by the artificial
insemination of that parent who is a partner in a civil union is
presumed to be the child of the non-biological partner. In the
Matter of the Parentage of the Child of Kimberly Robinson, 383
N.J. Super. 165; 890 A.2d 1036 (Ch. Div. 2005) (Non-biological
parent of New York registered domestic partnership recognized in
New Jersey, presumed to be the biological parent of child
conceived by the other partner through artificial insemination
where the non-biological partner has "show[n] indicia of
commitment to be a spouse and to be a parent to the child.").
Adevise of real property to a husband and wife/civil union
partner 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” (NOTClass “A”)
beneficiaries.
The following ARE Class “D” (NOTClass “C”) beneficiaries:
stepbrother or stepsister of the decedent, husband/wife/civil union
partner/domestic partner or widow/widower/surviving civil union
partner/surviving domestic partner of a stepchild or 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. See the
Rate Schedule on Page 4.
EXEMPTIONS
1. The transfer of real and personal property in this State held by
a husband and wife/civil union couple as “tenants by the
entirety” to the surviving spouse/civil union partner 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.
b. Where an action is instituted under the New Jersey Death
Act and terminates through the settlement by a compromise
payment without designating the amount to be paid under
each count, the amount which must be included in the
inheritance tax return is an amount, to the extent recovered,
which is equal to specific expenses related to the injury.
These expenses are similar to those mentioned in sections
a. above and include funeral expenses, hospitalization and
medical expenses, and other expenses incident to the injury.
Any amount which is recovered in excess of these expenses
is considered to be exempt from the tax.
4. The proceeds of any contract of insurance insuring the life of
a resident or nonresident decedent paid or payable, by reason
of the death of such decedent, to one or more named
beneficiaries other than the estate, executor or administrator of
such decedent are exempt for New Jersey Inheritance Tax
purposes.
Page 1
5. The transfer of property to a beneficiary or beneficiaries of a
trust created during the lifetime of a resident or nonresident
decedent, to the extent such property results from the proceeds
of any contract of insurance, insuring the life of such decedent
and paid or payable to a trustee or trustees of such decedent by
reason of the death of such decedent, is exempt from the New
Jersey Inheritance Tax irrespective of whether such
beneficiary or beneficiaries have a present, future, vested,
contingent or defeasible interest in such trust.
6. The transfer of life insurance proceeds insuring the life of a
resident or nonresident decedent, paid or payable by reason of
the death of such decedent to a trustee or trustees of a trust
created by such decedent during his lifetime for the benefit of
one or more beneficiaries irrespective of whether such
beneficiaries have a present, future, vested, contingent or
defeasible interest in such trust, is exempt from the New Jersey
Inheritance Tax.
7. The transfer, relinquishment, surrender or exercise at any time
or times by a resident or nonresident of this State, of any right
to nominate or change the beneficiary or beneficiaries of any
contract of insurance insuring the life of such resident or
nonresident, regardless of when such transfer, relinquishment,
surrender or exercise of such right occurred, is exempt from
the tax.
8. Any amount recovered (under the Federal Liability for Injuries
to Employees Act) for injuries to a decedent by the personal
representative for the benefit of the classes of beneficiaries
designated in that Statute, whether for the pecuniary loss
sustained by such beneficiaries as a result of the wrongful
death of the decedent or for the loss and suffering by the
decedent while he lived, or both is not subject to the
Inheritance Tax.
Any amount recovered by the legal representatives of any
decedent by reason of any war risk insurance certificate or
policy, either term or converted, or any adjusted service
certificate issued by the United States, whether received
directly from the United States or through any intervening
estate or estates, is exempt from the New Jersey Inheritance
Tax.
This exemption does not entitle any person to a refund of any
tax heretofore paid on the transfer of property of the nature
aforementioned; and does not extend to that part of the estate
of any decedent composed of property, when such property
was received by the decedent before death.
9. The proceeds of any pension, annuity, retirement allowance,
return of contributions or benefit payable by the Government
of the United States pursuant to the Civil Service Retirement
Act, Retired Serviceman’s Family Protection Plan and the
Survivor Benefit Plan to a beneficiary or beneficiaries other
than the estate or the executor or administrator of a decedent
are exempt.
10. All payments at death under the Teachers Pension and Annuity
Fund, the Public Employees’ Retirement System for New
Jersey , and the Police and Firemen’s Retirement System of
New Jersey, and such other State, county and municipal
systems as may have a tax exemption clause as broad as that
of the three major State systems aforementioned, whether such
payments either before or after retirement are made on death to
the employee’s estate or to his specifically designated
beneficiary, are exempt from the New Jersey Inheritance Tax.
The benefit payable under the supplementary annuity plan of
the State of New Jersey is not considered a benefit of the
Public Employee’s Retirement System and is taxable whether
paid to a designated beneficiary or to the estate.
The death benefits paid by the Social Security Administration
or railroad Retirement Board to the spouse of a decedent are
also exempt. For purposes of filing a return these amounts
need not be reported nor are they to be deducted from the
amount claimed as a deduction for funeral expenses.
In all other cases the death benefit involved should either be
reported as an asset of the estate or deducted from the amount
claimed for funeral expenses.
11. Other pensions. An exemption is provided for payments from
any pension, annuity, retirement allowance or return of
contributions, which is a direct result of the decedent’s
employment under a qualified plan as defined by section
401(a), (b), and (c) or 2039(c) of the Internal Revenue Code,
which is payable to a surviving spouse or domestic partner.
12. No Fault Insurance. The amount payable by reason of medical
expenses incurred as a result of personal injury to the decedent
should be reflected by reducing the amount claimed for
medical expenses as a result of the accident.
The amount payable at the death of an income producer as a
result of injuries sustained in an accident, which are paid to the
estate of the income producer, is reportable for taxation. In all
other instances this amount is exempt.
The amount paid at death to any person under the essential
services benefits section is exempt from taxation.
The claim for funeral expense is to be reduced by the amount
paid under the funeral expenses benefits section of the law.
SAFE DEPOSITBOXES
Safe deposit boxes are no longer inventoried by the New
Jersey Division of Taxation. On September 30, 1992, the Division
issued a blanket release in the form of a letter from the Director,
Division of Taxation, to all banking institutions, safe deposit
companies, trust companies, and other institutions which serve as
custodians of safe deposit boxes. The contents of the boxes may be
released without inspection by the Division.
WHERE TO FILE
All returns except the L-8 are to be filed with the New Jersey
Division of Taxation, Individual Tax Audit Branch, Transfer
Inheritance and Estate Tax, 50 Barrack Street, POBox 249,
Trenton, New Jersey 08695-0249.
WHEN TAX RETURNS ARE DUE
ATransfer Inheritance Tax Return must be filed and the tax
paid on the transfer of real and personal property within eight
months after the death of either:
ARESIDENTdecedent for the transfer of real or tangible
personal property located in New Jersey or intangible personal
property wherever situated, or
ANONRESIDENTdecedent for the transfer of real or tangible
personal property located in New Jersey. No tax is imposed on
nonresident decedents for real property located outside of New
Jersey and intangible personal property wherever situated.
Page 2
IMPORTANTREMINDERS
• If the decedent died TESTATE you must supply a legible copy of the LASTWILLAND TESTAMENT, all CODICILS thereto and any
SEPARATE WRITINGS.
• Acopy of the decedent’s last full year’s FEDERALINCOME TAX RETURN is required.
• All returns, forms and correspondence must contain the decedent’s SOCIALSECURITYNUMBER.
• PAYMENTS ON ACCOUNTmay be made to avoid the accrual of interest. (Form IT-EP)
• If PAYMENTS are not made by CERTIFIED CHECK the issuance of waivers may be delayed.
• All CHECKS should be made payable to NJ INHERITANCE ANDESTATE TAX and sent to the New Jersey Division of Taxation, Individual
Tax Audit Branch, Transfer Inheritance and Estate Tax, 50 Barrack Street, POBox 249, Trenton, NJ 08695-0249.
The return must be filed whenever any tax is due or a waiver
is needed. The tax is a lien on all property for fifteen years unless
paid sooner or secured by an acceptable bond. Interest accrues on
unpaid taxes at the rate of 10% per annum.
For EXEMPTIONS see the heading “EXCEPTIONS”
below.AMENDMENTS TO AN ORIGINALRETURN
In the case of both resident and non-resident estates, any assets
and/or liabilities not disclosed in the original return and all
supplemental data requested by the Division is to be filed in
affidavit form and attested to by the duly authorized statutory
representative of the estate, next of kin, or beneficiary certifying in
detail a description of the asset, real or personal and/or the liability
and the reasons for failure to disclose same in the original return
and filed directly with the NJ Transfer Inheritance.
ESTATE TAX
In addition to the inheritance tax, the State of New Jersey
imposes an estate tax on the estate of certain resident decedents.
Even estates that are partially or fully exempt from the inheritance
tax may be subject to the New Jersey Estate Tax.
ANew Jersey Estate Tax Return must be filed when the gross
estate plus adjusted taxable gifts as determined in accordance with
the provisions of the Internal Revenue Code in effect on December
31, 2001, exceeds $675,000.
The law requires that a copy of the Federal Estate Tax return
be filed with the Division within thirty days after the filing of the
original with the Federal Government. Also, the Division must be
supplied with copies of all communications from the Federal
Government making final changes or confirming, increasing or
decreasing the tax shown to be due. Instructions are contained in
form IT-Estate.
WAIVERS
Bank accounts, certificates of deposit etc., in the name of, or
belonging to a RESIDENTdecedent, in financial institutions
located in this state, cannot be transferred without the written
consent of the Division of Taxation. This consent is referred to as
a WAIVER.
Stocks and bonds etc., in the name of, or belonging to a
RESIDENTdecedent, of corporations organized under the laws of
this state are subject to the same waiver requirements.
Real property, located in New Jersey, in the name of, or
belonging to a RESIDENTor a NON-RESIDENTdecedent is
subject to the same waiver requirements, however, real property
held by a husband and wife/civil union couple as “tenants by the
entirety” in the estate of the spouse/civil union partner dying first
need not be reported, regardless of the date of death and waivers are
not required.
Amembership certificate or stock in a cooperative housing
corporation held in the name of the decedent and a surviving
spouse/civil union partner or domestic partner as joint tenants with
the right of survivorship is exempt, if it entitled them to use it as
their principal residence. However a waiver is required for this
transfer in the estate of a RESIDENTdecedent.
Waivers are not required for automobiles, household goods,
personal effects, accrued wages or mortgages, but these items must
be reported in the return filed.
EXCEPTIONS
Notwithstanding the waiver provisions above any financial
institution may release up to 50% of any bank account, certificate
of deposit etc. to the survivor, in the case of a joint account, the
executor, administrator or other legal representative of a
RESIDENTdecedent’s estate. This procedure is referred to as a
BLANKETWAIVER. This procedure is not available for the
transfer of stocks and bonds. For a detailed explanation see
N.J.A.C. 18:26-11.16.
ASELF EXECUTING WAIVER, FORM L-8, has been
created for Class“A” beneficiaries in the estates of RESIDENT
decedents.
Use of this form MAYeliminate the need to file a formal
Inheritance Tax return. Your attention is directed to the instructions
contained in the body of the L-8, a copy of which is included in this
booklet. (Not included in IT-R Schedule Booklet.)
This form is to be filed with the financial institution which will
then be authorized to release the subject asset without the necessity
of receiving a waiver from the Division. DO NOTfile this form
with the Division.
AREQUESTFOR AREALPROPERTYTAX WAIVER,
FORM L-9, has been created for Class “A” beneficiaries in the
estates of RESIDENTdecedents. This form may be used in two
instances where property passes to class “A” beneficiaries.
Use of this form MAYeliminate the need to file a formal
Inheritance Tax Return. Your attention is directed to the
instructions contained in the body of the L-9.
This form is to be filed directly with the Branch. If the form
is in order the necessary waiver/waivers will be promptly issued.
NEITHER THE L-8 NOR THE L-9 may be used where it is
claimed that a relationship of mutually acknowledged child exists.