When formulating an estate plan for a same-sex couple, an attorney must not only consider the federal tax regime, but must also give thought to New Jersey estate and inheritance taxes. Same-sex couples in New Jersey who have entered into a civil union may claim the unlimited marital deduction for New Jersey estate tax purposes, but not for federal estate tax purposes. Consequently, planning can be tricky.
New Jersey grants civil-union partners the same rights enjoyed by married heterosexual couples who are both citizens of the United States. For New Jersey inheritance tax purposes, a civil-union partner is a Class A beneficiary and no inheritance tax is imposed on a transfer to a civil-union partner. Generally, the children of a civil-union couple are also Class A beneficiaries. For New Jersey estate tax purposes, the marital deduction is available for transfers outright to a civil-union partner and transfers to a trust that would otherwise qualify for the marital deduction under the federal internal revenue code.
