This month, Forbes Editor Ashlea Ebeling turned to John O. McManus for insight on the court case of Peter Muscle and Linda Jackson. Ebeling’s article begins:
Here’s a heartbreak story that might make you decide to get married, move to Florida or hire a trusts & estates lawyer—or all three. A woman who dated her beau for 44 years and was on the verge of finally marrying him lost a case recently in New Jersey tax court that cost her beau’s estate $214,000 in state taxes. That’s money that would have otherwise gone to her and the man’s niece and nephew.
The piece goes on to cite the thoughts of McManus:
Making lifetime gifts to reduce the impact of state estate taxes still can work. “This case should not stop people from making lifetime gifts,” says John McManus, an estate lawyer in New Providence, N.J., adding the general warning: “Just take care to be mindful of issues with states.” Many wealthy folks are taking advantage of a bumped-up $5 million lifetime federal gift tax exemption, to transfer assets to loved ones (it’s in place through year-end 2012; it reverts to $1 million on Jan. 1, 2013). But it’s key that you consult a trusts & estates lawyer in your state (Jackson and Muscle had consulted with a Medicaid planning lawyer).
Find out about options with “gifting” by reading the full story.
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