Current estate tax law demonstrates why it is so important to consult with a New Jersey estate administration and planning attorney.
A deceased individual’s estate is entitled to an exemption from Federal Estate Tax currently in the amount of $12,060,000.00. However, since a surviving spouse pays no Federal Estate Tax on inheritances from the deceased spouse, the surviving spouse is permitted to claim the deceased spouse’s exemption for use upon the death of the surviving spouse. When creating an estate plan and upon the death of the first spouse, a New Jersey estate attorney must consider whether the surviving spouse would benefit from claiming the deceased spouse’s exemption. In order to claim that exemption, a Federal Form 706 Estate Tax must be prepared and filed.
The surviving spouse and her estate attorney must decide if it is beneficial to use the estate tax exemption of the first spouse to die at that time. The decedent spouse’s estate may be valued far in excess of the exemption amount, and the deceased spouse’s exemption should be used to create a credit shelter trust that will allow assets to appreciate and accumulate outside the surviving spouse’s estate.