More than a half year into the increased New Jersey estate tax exemption, and months shy of the tax's outright elimination, the issue seems barely to have registered for lawyers at bulky trusts and estates practices.
They're not even so sure it will stay this way. Remarks by gubernatorial front-runner Phil Murphy indicating his support for such a tax means the phaseout's permanency is far from certain, more than one practitioner pointed out.
Either way, it appears the status of New Jersey's estate tax was never going to make or break a T&E practice. After all, last year's change raising the exemption to $2 million from $675,000 for 2017, and repealing the tax for 2018 is not the first shift T&E practitioners have seen over the last several decades.
Mary Patricia Magee recalled how, when she began her practice in 1982, the federal estate tax exemption, then at $225,000, was to nearly triple within a few years, and the T&E bar was fretting over business.
"I said, how the hell are we going to make any money?" said Magee, of Lindabury, McCormick, Estabrook & Cooper's Red Bank office. The firm has an eight-member wills, trusts & estates practice. "We've always been faced with a planning environment full of tax uncertainty."
An influx of tax attorneys to T&E in the 1990s made it more tax-centric, she noted.
"We are really lawyers that advise families as to the dispensation of their assets, and taxes are just one aspect of that," she said.
Judson Stein of Genova Burns in Newark, which has three T&E lawyers and a handful more who handle some estate-related litigation and transactional matters, echoed the same sentiment. "Estate taxation is only one of a number of reasons to focus on estate planning," he said.
"But these other reasons don't seem to be as motivating," he added. "There is the concern among practitioners, which I share, that a lot of people will have another reason to procrastinate."
The New Jersey phaseout can make the T&E lawyer's job tricker, or lead to different sorts of work. Stein said some new clients might come with existing wills that provide for disbursements by reference to exemption limits rather than by formula and limits, as last year's legislation illustrates, can change.
Michael Backer, chairman of the tax, trusts and estates department at Greenbaum Rowe Smith & Davis in Woodbridge, said his group has seen a slight uptick of late in "disclaimer wills," which allow a survivor to avoid taxation on a portion of the inheritance by placing it in a trust for the survivor's benefit.