Inheritance Tax Issues For NonMarried Individuals

By: Marc S. Galella, Esq. of R.C. Shea & Associates

Quite often I am asked to prepare an estate plan for an unmarried couple. In many cases they have been together a number of years and have lived their lives as if they were married, but for various reasons the couple cannot marry.

In some cases, they want to leave a significant portion of their estate to the other partner but at the same time they have surviving children. An issue that arises is that New Jersey still has an inheritance tax. The inheritance tax exempts spouses, parents, children and lineal descendants. In the case of an unmarried couple, the surviving partner is treated by New Jersey as a stranger and will be subject to the inheritance tax at the rate of 15% of what the surviving partner inherits.

So, if one of the partners dies and that persons will leaves all of their assets to the surviving partner the surviving partner would pay a 15% inheritance tax. However, what happens when the Will of the deceased partner divides the assets equally between the surviving partner and the children of the deceased partner? In that case, that portion of the estate passing to the surviving partner will be subject to the inheritance tax at the rate of 15%, but that portion of the estate passing to the children would be exempt from the tax. If the Will directs that the inheritance tax be paid by the estate, then the share passing to the children would be reduced by the amount of the inheritance tax to be paid for the surviving partner. For example, if the decedent leaves an estate of $1,000,000 and divides it equally between the surviving partner and a child intending that each receive $500,000.00, the $75,000 inheritance tax would be taken off the top of the estate thus reducing the share going to the child. In the alternative, the Will could direct that each beneficiary pays their own share of the inheritance tax. Thus, in this situation the child would inherit the $500,000 which would not be subject to inheritance tax while the surviving partner would receive $425,000 after the payment of the $75,000 inheritance tax from the surviving partner’s share.

As you can see, it is critical in these situations to allocate the payment of the inheritance tax between the surviving partner and the children. The person making the Will has to determine how the inheritance tax should be paid and the Will needs to be specific as to payment. If you are in this situation, you should discuss with your estate planning attorney how you want the inheritance tax paid.

Real Estate

Cemetery Mount - Calvary Linden, NJ. Grave for two persons. Plot C! Market Offer. Stan-T. 732-300-9888 or text. Saint Adalbert's. (25)

Misc.

Take notice that in accordance with N.J.S.A. 39:10-16*, application has been made to the Chief Administrator of the Motor Vehicle Commission, Trenton, New Jersey, to receive title papers authorizing and the issuance of a New Jersey certification of ownership for, 2004, Nissan, VIN Number JN8DR09Y94W904212. Objections, if any, should be made in writing, immediately in writing to the Chief Administrator of the Motor Vehicle Commission, Special Title Unit, P.O. Box 017, Trenton, New Jersey, 08666-0017. (26)

Jersey Shore Design - Glass shower doors fits 60"L bathtub included. Custom frame $375 OBO. 732929-3475 Leave message. (26)

Items Wanted

COSTUME/ESTATE JEW -

ELRY Looking to buy costume/ estate jewelry, old rosaries and religious medals, all watches and any type of sterling silver, bowls, flatware candlesticks or jewelry. Same day house calls and cash on the spot. 5 percent more with this AD. Call Peggy at 732-581-5225. (t/n)

$$$ WANTED TO BUY $$$

Jewelry and watches, costume jewelry, sterling silver, silverplate, medals, military items, antiques, musical instruments, pottery, fine art, photographs, paintings, statues, old coins, vintage toys and dolls, rugs, old pens and postcards, clocks, furniture, brica-brac, select china and crystal patterns. Cash paid. Over 35 years experience. Call Gary Struncius. 732-364-7580. (t/n)

Entire Estates Bought - Bedroom/dining sets, dressers, cedar chests, wardrobes, secretaries, pre-1950 wooden furniture, older glassware, oriental rugs, paintings, bronzes, silver, bric-a-brac. Call Jason at 609-970-4806. (t/n)

CASH PAID!! LP records - stereos, turntables, musical instru-ments, guitar, saxophone, CD’s, reel tapes, music related items. Come to you. 732-804-8115. (30)

Cash - Top dollar, paid for junk, cars running and nonrunning, late model salvage, cars and trucks, etc. 732-928-3713. (t/n)

Vinyl Records Wanted - Paying cash for LP albums. Rock, Blues, Reggae, Soul. Very good condition only. Call Rick 908-616-7104. (26)

Used Guns Wanted - All types: collectibles, military, etc. Call 917-681-6809. (t/n)

Junk or Wrecked Cars and Trucks

Wanted - Cash paid. 732-6577251, Steve. Thanks. (26)