Estate Planning in New Jersey

New Jersey imposes both an inheritance tax AND a state estate tax (with a $2 million exemption threshold), making it one of the most complex states for estate planning. The inheritance tax rate ranges from 0% (Class A beneficiaries: spouses, children) to 16% (Class D: unrelated individuals). This dual taxation creates critical planning opportunities and traps. Simple wills cost $600-$1,200, while comprehensive estate plans cost $3,000-$7,000 due to the tax planning complexity. New Jersey repealed its estate tax in 2018 but retained the inheritance tax, creating a somewhat unique landscape. Revocable living trusts are popular for probate avoidance, as New Jersey surrogates' court procedures can be lengthy. Powers of attorney and healthcare proxies under the NJ Advance Directives for Health Care Act are essential documents. The state's high property values make proper estate planning particularly important for middle-class families who may be surprised by inheritance tax liability on inherited real estate.