British Expats - Don't die In New Jersey as a green card holder !

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Re: Don't die In New Jersey as a green card holder !

Quote:

Originally Posted by Ash UK/US (Post 11634780)

I wonder how this works with life insurance?

It covers everything that is part of your estate, by definition. It's an estate tax.

Re: Don't die In New Jersey as a green card holder !

Quote:

Originally Posted by Steve_ (Post 11640988)

It covers everything that is part of your estate, by definition. It's an estate tax.

What if you nominate a beneficiary for your life insurance? Does that bypass your estate?

Re: Don't die In New Jersey as a green card holder !

Quote:

Originally Posted by Steve_ (Post 11640988)

It covers everything that is part of your estate, by definition. It's an estate tax.

Quote:

Originally Posted by Pulaski (Post 11641172)

What if you nominate a beneficiary for your life insurance? Does that bypass your estate?

Surely a life insurance payout to a beneficiary is not part of the deceased person's estate..?

Re: Don't die In New Jersey as a green card holder !

Quote:

Originally Posted by robin1234 (Post 11641585)

Surely a life insurance payout to a beneficiary is not part of the deceased person's estate..?

That is true in the UK if you nominate beneficiaries, otherwise it goes into your estate.

Re: Don't die In New Jersey as a green card holder !

Quote:

Originally Posted by Pulaski (Post 11641589)

That is true in the UK if you nominate beneficiaries, otherwise it goes into your estate.

True no doubt but I always assumed the main reason for life insurance was that it went to your designated beneficiaries after your death, typically spouse as beneficiary with children as contingent beneficiaries. So I assume most people do designate beneficiaries.

Re: Don't die In New Jersey as a green card holder !

Quote:

Originally Posted by robin1234 (Post 11641585)

Surely a life insurance payout to a beneficiary is not part of the deceased person's estate..?

Well without knowing the exact details it's hard to say obviously, but simply put, if it's part of the estate it's subject to estate tax, if not then it's not. :lol:

In the U.S. you have the IRD rules so the beneficiary would be taxed on income from the estate. Although life insurance is generally exempt, depending on various factors.

But the situation described is odd, because she's the spouse - who typically wouldn't be taxed on the transfer of an estate, but she has been because of some stupid NJ law which mirrors an obscure federal law which applies to far fewer people, because of the fantastically higher federal limit on estate tax.

So it appears either way she gets taxed, either on the transfer of the estate or the income from the estate and I'm not sure how NJ sees the life insurance. (Although in this situation it could be taxed twice because I'm not sure if NJ would allow the tax credit to the estate on the IRD tax being paid by the beneficiary).

Like I said, she needs to go to court over it, I would. I've always thought that Federal law was on weak ground and since US v. Windsor, weaker ground still. If gay married couples can transfer estates tax-free because of the 14th Amendment, then I fail to see why the same logic doesn't apply to long-standing residents of the US.

Quote:

...The liberty protected by the Fifth Amendment's Due Process Clause contains within it the prohibition against denying to any person the equal protection of the laws. While the Fifth Amendment itself withdraws from Government the power to degrade or demean in the way this law does, the equal protection guarantee of the Fourteenth Amendment makes that Fifth Amendment right all the more specific and all the better understood and preserved.

The case law is pretty substantial and the amount in question is also, so it's worth the effort of going to court imo.

Re: Don't die In New Jersey as a green card holder !

In fact thinking about it, the first thing to do would be to see if the AG has an opinion on the NJ law in the light of US v. Windsor and get a lawyer to draft the letter.