Experienced Beneficiary Attorney in Red Bank, NJ

father and son

A beneficiary is a person or charitable entity that inherits under the provisions of a will. If there is no will, meaning that a person died “intestate,” New Jersey law sets forth a hierarchy of who will inherit beginning with the decedent’s closest relatives. There may be multiple beneficiaries of an estate and their interests may or may not align. Sometimes conflicts develop between beneficiaries that must be resolved. If a beneficiary is a minor child, then a guardian or trustee will be appointed to handle any distributions with regards to the child. A grantor may change their will at any time and usually the most recently executed version of a will is what will prevail with regards to inheritance.

Sometimes a beneficiary must pay tax on an inheritance. In order to be aware of tax rights and implications and your rights as a beneficiary, you should consider consulting with an experienced attorney. The inheritance tax varies and depends on the amount received and the relationship between the decedent and the beneficiary. No tax, however, is imposed on “Class A” beneficiaries – father, mother, grandparents, descendants, spouses, civil union partners or domestic partners. Charitable institution beneficiaries are also exempt from the tax. Other categories of beneficiaries are taxed at various rates. A “domestic partner” arrangement involves a couple, both age 62 or older, but not involved in a civil union or marriage. A “civil union partner” is a same sex person engaged in a committed partnership recognized by the state.

Class C and D beneficiaries are taxed at other rates. Class C beneficiaries – which includes siblings, the spouse or widow(er) of a child of the decedent, and the civil union partner or surviving civil union partner of a child of the decedent are exempt from paying tax on the first $25,000 of an inheritance and transfers that exceed $25,000 are taxed at 11%–16%. Class D beneficiaries – all other beneficiaries – are exempt from the first $500 of an inheritance and transfers that exceed $500 are taxed at 15%–16%.

The executor can distribute estate assets to inheritors only after debts and taxes are paid. The executor must also check before distributing assets to ensure that an inheritor has not been determined to be delinquent in child support payments. When the executor has paid all required estate debts and filed any necessary tax returns, he or she can then distribute assets to beneficiaries. When all of these tasks have been accomplished, the court will relieve the executor of his or her duties. Working with a beneficiary attorney can help you ensure you are following proper protocols.

If you need assistance with a probate matter, contact Margaret M. Mahon, professional beneficiary attorney at (732) 530-6626 or online. I offer free 30-minute initial consultations. My Red Bank office provides free parking and flexible hours for appointments by request. If necessary, I can travel to meet with you.

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Margaret M. Mahon, Esq. LLC
211 Broad Street, Suite 203
Red Bank, New Jersey 07701
(732) 530-6626

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