Starting January 1, 2018, Delaware will no longer require estate taxes. The state is increasing taxes on certain goods such as tobacco, alcohol, major corporations, and real estate transfers. The estate tax was actually only in place since 2009, in an effort to bring Delaware out of its $800 million deficit. It is important to note that there is still a 40% federal estate tax applicable to those individuals who have an estate worth more than $5.49 million. In 2016, Delaware’s estate taxes brought in roughly $9 million.
Who is impacted by the estate tax repeal?
It is important that if you are a person with a high net worth estate, you are prepared for any estate taxes that may apply to you. You should consider estate taxes when creating your estate plan and determining the inheritances each of your beneficiaries would receive.
Delaware will be the 18th state, including the District of Columbia, to repeal estate taxes. The state said that they weren’t making as much in estate taxes as they were losing in income taxes so state representatives made the decision to repeal the bill.
New Jersey also impacted for 2018
Delaware isn’t the only state repealing its estate tax. As of January 1, 2018, the state of New Jersey will also be repealing estate taxes as well. Governor Christie signed this into law in October 2016. However, it is important to note that New Jersey will not repeal its inheritance taxes. Inheritance taxes in New Jersey only apply to siblings, nieces, and nephews. Spouses and children will not be subject to this tax.
If you need assistance with planning or administrating an estate in Delaware or New Jersey, contact MWM today.
The law firm of Mattleman, Weinroth & Miller, P.C., is composed of experienced attorneys throughout the states of New Jersey and Delaware. Please contact the office for a free initial consultation and get any questions answered regarding your specific case.