Understanding the estate tax in Manalapan Township probate cases is essential for executors, administrators, and beneficiaries. Taxes are a priority debt, so they are paid before other creditor claims are settled and any distributions are made to beneficiaries. A large amount of taxes owed could greatly reduce the value of the estate and, in turn, any inheritance.

A talented probate attorney could help you understand whether a will is subject to state or federal taxes and determine the amount. Taxes can add challenges to the probate process, but experienced legal guidance could eliminate unnecessary stress and worry.

Is There a State-Level Estate Tax?

As of January 1, 2018, there is no state-level estate tax on probate cases in Manalapan Township. Historically, the estate tax originated in 1934, and the inheritance tax was credited against it. This means that between 1934 and 2018, an estate only paid the higher of the estate tax and the inheritance tax.

However, the state-level estate tax was phased out in 2017. If an individual died before December 31, 2016, the estate tax exemption was capped at $675,000. For those who died between January 1 and December 31, 2017, the exemption was capped at $2 million.

While there is now no state-level estate tax, estates may still be subject to a federal estate tax and the state’s inheritance tax.

Federal Estate Tax

The government imposes a federal estate tax on any probate case in Manalapan Township that exceeds the exemption amount. Only the value of assets above this amount is subject to the estate tax. As of 2025, this exemption is $13,990,000. This means that only high-value estates are subject to the tax, and very few estates will need to pay it.

The federal estate tax ranges from 18 percent to 40 percent, depending on the value of the estate. If the amount exceeds the exemption limit by up to $10,000, the tax rate will be 18 percent. For amounts exceeding the exemption limit between $10,001 and $20,000, 20 percent is payable. For between $20,001 and $40,000, the tax rate is 22 percent, and so on, up to 40 percent.

Gift Tax and Estate Tax

The government also includes a gift tax in the federal estate tax. An individual does not pay tax on gifts while they are alive, but any gifts given during their life that exceed the annual gift tax exclusion amount count toward the taxable estate. Therefore, taxes on gifts are only owed if the entire estate exceeds the exemption amount.

Inheritance Tax

While the state no longer imposes an estate tax, probate cases in Manalapan Township may still be subject to an inheritance tax. The inheritance tax has existed since 1892 and is a tax on all property transferred from the decedent to a beneficiary.

The amount of tax will depend on several factors. These include the beneficiary’s relationship to the decedent, the value of the assets, the type of assets, and whether the decedent resided within the state. Even if the decedent did not live in the state, any property they owned in New Jersey may be subject to the inheritance tax.

Again, the percentage of tax will depend on the value of the assets being transferred. Currently, no tax is due on the first $25,000 of assets. The next $1,075,000 is taxed at a rate of 11 percent, the following $300,000 at a rate of 13 percent, and so on.

Contact a Manalapan Township Probate Lawyer To Discuss Estate Tax for Your Situation

Determining how the estate tax in Manalapan Township probate cases impacts inheritance is an essential part of estate planning. The proper calculation and timely payment of any taxes are crucial to effectively and efficiently closing out a probate. Contact our trusted probate attorneys at Nesevich Law, LLC to help you understand the inheritance and estate tax requirements, determine how much tax you need to pay, and assist with your tax filings.