Estate and Wealth Tax Planning in NJ
Estate, gift and trust tax planning for New Jersey families: the $15M federal exemption, NJ inheritance tax, Form 1041 and succession.
Estate planning is mostly a legal exercise, but nearly every decision in it has a tax result: which assets go into a trust, when gifts are made, how a business passes to the next generation, and who pays income tax on trust earnings. We work alongside your estate attorney and financial advisor on the tax side, and we prepare the returns that follow.
The federal picture for 2026
The federal estate and gift tax exemption is $15 million per person for 2026, $30 million for a married couple, and the 2025 tax law made that level permanent with inflation adjustments. You can also give $19,000 per recipient in 2026 without using any of it. Above the exemption, the rate is 40%.
New Jersey inheritance tax
New Jersey repealed its estate tax in 2018 but kept its inheritance tax. Transfers to a spouse, children, grandchildren and parents are exempt. Transfers to siblings, nieces, nephews, friends and other beneficiaries can be taxed at rates up to 16%. Beneficiary designations and lifetime gifts can change the result significantly.
What we handle
- Gift tax returns (Form 709), including elections that use the lifetime exemption.
- Trust and estate income tax returns (Form 1041), including decisions about distributing or retaining income.
- New Jersey inheritance tax returns and waivers.
- Business succession modeling: gifting shares over time, installment sales and buy-sell arrangements.
- Coordination of trusts, partnerships and real estate held across several states.
Frequently asked questions
If my estate is under $15 million, do I need tax planning?
For federal estate tax, possibly not. But income tax on trusts, New Jersey inheritance tax for non-lineal heirs, capital gains basis at death and business succession still matter at almost any size.
Why are trusts taxed so heavily?
Trust income tax brackets are compressed and reach the top 37% rate at about $16,000 of retained income. Distributing income to beneficiaries in lower brackets often reduces the total tax.