Untangling Real Estate from an Estate

Updated: Oct 26, 2020

By: Rachel W. Glavis, Esq.

Overview of Estate Taxes in New Jersey

Before January 2018, New Jersey residents were affected by two estate taxes: the estate tax, and the transfer inheritance tax. The estate tax affected estates whose assets exceeded a certain amount. The legislation that took effect at the beginning of the New Year removed the estate tax, but not the transfer inheritance tax, which is imposed on certain estates whose beneficiaries are not lineal beneficiaries.

Lineal beneficiaries are in direct line to the decedent, including a parent, child, grandchild, or great-grandchild. An estate that names any other beneficiary; such as a sibling, aunt, uncle, cousin or friend; may be subject to the New Jersey Transfer Inheritance Tax.

If the decedent had a will, an Executor must be appointed to administer the estate. When there is no will, an Administrator will be appointed instead. Executors and administrators fulfill the same role and both also receive documents from the court that give them the authority to administer the estate, called Letters Testamentary for executors and Letters of Administration for administrators.

How the Transfer Inheritance Taxes Affects Real Estate

Real property as well as assets may be subject to the transfer inheritance tax. If a decedent owned pro