05 Sep Will tax be owed on this inheritance?

Q. An uncle passed away in February 2025. He was domiciled in Florida and never lived or owned property in New Jersey. Does his nephew, domiciled in New Jersey, have to pay inheritance taxes of 15%? The gift is from a trust created in Florida.
— Unsure

A. We’ve got good news for this nephew.

Where the recipient of property resides is not a factor in determining whether New Jersey transfer inheritance tax will be assessed.

Where the decedent resides at the time of death, as well as where the real and tangible personal property owned by the decedent is located, are factors in determining what transfers may be taxable, said Catherine Romania, an estate planning attorney with Witman Stadtmauer in Florham Park.

“If the decedent is domiciled in Florida and leaves property to his nephew, but all of the real and tangible property is located outside of New Jersey, there would be no New Jersey transfer inheritance tax, notwithstanding that the nephew resides in New Jersey,” she said. “However, if any of the real or tangible property owned by the decedent is located within New Jersey at the time of decedent’s death, then such property transfer to a nephew would be subject to tax and it would not matter where the nephew resided.”

If the uncle was a New Jersey resident at the time of death — though that doesn’t seem to be the case for you — then all of his real and tangible property located in New Jersey, as well as all intangible property, would be subject to the transfer inheritance tax unless otherwise exempt, Romania said. For example, life insurance paid to a named beneficiary is exempt.

“The New Jersey transfer inheritance tax is also an issue here because the nephew is a Class D beneficiary,” Romania said. “If the recipient of the property transferred was a Class A beneficiary — spouse, domestic partner, parent, grandparent, child, grandchild, step-child — then there would be no New Jersey inheritance tax.”

But if the uncle and all of his property is not located in New Jersey, the nephew has nothing to worry about.

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This story was originally published in September 2025.

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