While major changes are likely on the Federal level following national elections last month (see our post here on tax changes post-elections) including the repeal of the federal estate tax, many states will still retain their own estate tax. Readers should keep in mind that on the state level, the exclusions from state estate taxes can be much lower than on the federal level. In New York, the current estate tax exemption is $4,187,500.00 and rises to $5,250,000 on April 1, 2017. New York estates valued at 105% (or greater) of the exemption lose the exemption entirely. In Connecticut, the exemption is now $2 million and the estate tax ranges from 7% to 12%, depending on the amount above the Connecticut estate tax exemption. (Connecticut, along with Minnesota, are the only two states in America which also impose a gift tax.)
On September 30, 2016, New Jersey Governor Chris Christie and New Jersey legislators announced an agreement to repeal the New Jersey Estate Tax. The exemption from New Jersey Estate Tax will be raised from $675,000 currently to $2,000,000 for 2017, and the estate tax is to be repealed in 2018. This will likely make New Jersey an appealing jurisdiction (like Florida) for clients from an estate tax perspective.