It's Not Just About Kids: Smart Planning for Every Future - Trusts & Estates and Elder Law Newsletter
By: Victoria Friedrich
Estate planning isn’t just for married couples or individuals with children — it’s essential for everyone, including single adults and married people without descendants. Whether you're young and just starting to build your assets, or well-established in your career and financial life, having a clear estate plan ensures that your wishes are honored and your loved ones are protected.
For non-married adults in New Jersey without descendants, estate planning often comes with some unique considerations — especially when it comes to inheritance tax laws. Let’s break down the basics and help you plan with confidence.
Why Single Adults Need an Estate Plan
Estate planning provides several important benefits to all adults, regardless of your marital and/or parental status:
1. Control Over Your Assets
Without a Will or trust, the State decides how your assets are distributed through intestacy laws, essentially to your next of kin. This may be your parents, siblings, nieces and nephews, or cousins. This might not align with your personal wishes. An estate plan ensures that your money, property, and belongings go to the people and/or causes you care about most.
2. Coordination of Planning
You can name beneficiaries for financial accounts, insurance policies, and retirement plans. An estate plan makes it easier to coordinate these designations in your Will or trust and avoid confusion or disputes.
3. Choosing a Healthcare Proxy and Power of Attorney
If you become unable to make decisions for yourself, someone you trust should be legally authorized to act on your behalf. Through a healthcare directive and durable power of attorney, you can appoint someone to manage your medical and financial affairs.
New Jersey Inheritance Tax: What You Should Know
New Jersey is one of the few states that imposes an inheritance tax, which applies based on the relationship between the deceased and the beneficiary.
Here’s a quick overview:
- Spouses, children (including biological, step, and adopted), grandchildren, parents, and grandparents are Class A beneficiaries and are exempt from inheritance tax.
- Siblings and in-laws are Class C beneficiaries and will owe inheritance tax on any amount received over $25,000 (as of 2025).
- Friends, cousins, non-married partners and other non-relatives are Class D beneficiaries and typically face the highest inheritance tax rates in New Jersey.
- Qualified charities, religious institutions, educational and medical institutions, Non-profit benevolent or scientific institutions, and The State of New Jersey or any of its political subdivisions are Class E beneficiaries and are exempt from inheritance tax.
The tax rates for Class C and D beneficiaries range from 11% to 16%, depending on the amount inherited.
Example: If you leave $100,000 to a close friend (Class D), they (or your Estate) could owe up to $15,000 in inheritance taxes to the State of New Jersey.
This makes it especially important for single individuals and/or married couples without descendants—who are more likely to leave assets to non-Class A beneficiaries—to understand and plan with these tax implications in mind.
Strategies to Reduce Inheritance Taxes
There are a few ways to minimize or avoid inheritance taxes in New Jersey:
- Gifting during your lifetime. You can give up to $19,000 per person per year (as of 2025) outright or in trust, without triggering federal gift tax. New Jersey does not have a gift tax, so gifts can be made without state tax implications. Gifts made during your lifetime reduce your taxable estate. However, it should be noted that gifts made within 3 years of death, including those made to a trust, are generally presumed to be made "in contemplation of death" and will be subject to inheritance tax.
- Life insurance planning. A well-structured life insurance policy that passes to a named beneficiary (other than a person’s estate) or placed in an irrevocable trust may pass tax free to non-exempt beneficiaries.
- Charitable Giving. Gifts to charitable organizations during your life or after your death are exempt from inheritance tax.
- Utilize Trusts. Using trusts can remove assets from your taxable estate. Irrevocable trusts can reduce inheritance tax liability for beneficiaries, and Irrevocable Life Insurance Trusts (ILITs) ensure life insurance proceeds are excluded from your estate. Charitable remainder trusts also reduce your taxable estate by allowing you to donate assets while retaining income.
Getting Started with Your Estate Plan
Creating an estate plan that works for you does not have to be overwhelming. Here are a few first steps:
- Take inventory of your assets – bank accounts, investments, property, and personal items.
- Decide who should inherit what – and consider the potential tax impact.
- Choose your healthcare proxy and power of attorney.
- Meet with an estate planning attorney, preferably someone familiar with New Jersey laws.
- Keep your documents updated – especially after major life changes like buying property or changing relationships.
Estate planning is about protecting your legacy and making life easier for the people you care about. For single adults and married couples without descendants — especially in New Jersey where inheritance taxes can apply — starting sooner rather than later can save time, money, and stress down the road.
Taking control of your future is one of the most empowering steps you can take. The Trust and Estate attorneys at Pashman Stein Walder Hayden P.C. have a wealth of experience planning for people from all walks of life. And with the right guidance, it’s easier than you think.
Learn more about our Trust & Estates and Elder Law & Special Needs Planning Practices.
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The information contained herein is for informational purposes only and not for the purpose of providing legal advice. You should contact your attorney to obtain advice with respect to any particular issue or problem. Use of and access to these materials do not create an attorney-client relationship between Pashman Stein Walder Hayden P.C. and/or its attorneys, and the reader of the materials.