- NJ imposes an inheritance tax to non-exempt beneficiaries.
- A girlfriend of a deceased NJ resident is not an exempt beneficiary.
- How can the estate representative honor a decedents dying wish that a portion of his estate go to his girlfriend?
I was recently asked to comment about the following case. A client is the only child of her deceased Dad, who died unmarried and without a Will, making the estate intestate because there is no signed Last Will. His daughter has been appointed Administrator of his estate. She intends to honor her father’s dying wish that many of his assets go to his long-time girlfriend and companion. The value of the gift will be around $300k going to the girlfriend. The total value of the Estate is under $750,000.00.
There are no legal documents creating any legal obligation to give the girlfriend anything. The daughter has no reasonable expectation of ever coming close to having an estate large enough for her having to pay estate taxes upon her death.
The questions posed to me are:
- If the client as administratrix of dad’s estate writes a check to the girlfriend from the Estate account would NJ inheritance tax be due?
- Or is it best (meaning the most tax effective way) to transfer estate assets to the daughter as an exempt beneficiary who can then gift a portion of the estate to the girlfriend directly after the child has administered the estate, writing a check from personal funds to the girlfriend?
The best answer, in my opinion, is a choice number 2. This option will avoid NJ inheritance tax and honors her father’s wish.
To discuss your NJ Estate Administration & Probate matter, please contact Fredrick P. Niemann, Esq. toll-free at (855) 376-5291 or email him at firstname.lastname@example.org. Please ask us about our video conferencing consultations if you are unable to come to our office.