What the Inheritance Means For Step-Families [New Jersey]

In New Jersey, there is legislation presented that could make step-grandchildren Class A beneficiaries rather than Class D. Because of their current classification, step-grandchildren are taxed on their inheritance, determinant on the amount. If the transfer is less than $700,000, the rate is 15%, while anything over is taxed at 16%.

If you were to pass away before your spouse, leaving your assets to your spouse in a trust, and then to your stepchildren as remainder upon your spouse’s passing, then they would be subject to a “compromise” tax. This tax would be calculated based on your spouse’s “age, her state of health, her financial needs, the terms of the trust, etc,” according to Catherine Romania, an estate planning attorney with Witman Stadtmauer in Florham Park.

See Karen Price Mueller, What the Inheritance Means For Step-Families, NJ.com, May 17, 2018.

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.) for bringing this article to my attention.