Dorothy Secol, CLA
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In accordance with N.J.S.A. 54:38-1 et seq., an estate tax has been due to the State of New Jersey on all estates subject to the federal estate tax. Under this statute, an estate tax is payable to New Jersey on all estates, including those with Class A beneficiaries where no inheritance tax is due. In the past, however, this tax has not been a lien on real property.

This has now changed. The new law, Chapter 31 of the Public Laws 2002 amends several existing sections of the state tax code to now impose a lien against property owned by the decedent at the date of death.

The law, which went into effect on July 1, 2002, applies to the estate of every resident dying after December 31, 2001. All estates having a gross value of less than $675,000.00 are exempt from the tax. There is no expiration date or statute of limitation date due the enforcement of the tax, however the lien period for unpaid inheritance tax is 15 years and the same may apply to the estate tax.

Title companies will undoubtedly require a statement in the affidavit of title to advise that:

  1. The N.J. Estate tax has been fixed or paid; or
  2. The Division of Taxation has given written consent to the transfer of the real property; or
  3. The estate is exempt from the N.J. Estate Tax.

Please note: In the year 2002, a decedent may be exempt from federal estate tax due to the exemption of $1,000,000.00, however the New Jersey exemption amount is only $675,000.00 and therefore will trigger a New Jersey estate tax.

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