How Can I Transfer Assets to a Family Member without Incurring Tax?
Are you thinking about giving some of your assets to an adult child or grandchild, or considering ways of leaving these assets to them when you pass away? This might seem like a relatively straightforward thing to do, but depending on the value of your assets, there could be significant tax implications. For many New Jersey residents who want to gift assets to family members — either in the present, or upon their death — being able to transfer property while minimizing taxes is a goal. Can you transfer assets to your loved ones without incurring tax? Our Summit estate planning lawyers can discuss family asset transfers and tax issues with you in more detail.
How Are Gifts Taxed Federally?
It is important to know that, if you are thinking about giving assets to family members and potential tax implications, you need to look at both federal tax implications and New Jersey state tax implications.
As far as federal tax goes, there is an annual gift exclusion amount that allows you to give a particular amount of money or property value to a party up to a certain amount each year without incurring any tax (for you or the recipient). For 2026, that amount is $19,000 per person. This gift tax exclusion is per person receiving the gift. Accordingly, you can give up to $19,000 per year to as many people as you want. You could give only $19,000 to one party, or you could give $19,000 to 10 or more people. Married couples can double the exclusion to give up to $38,000 (together) to each recipient. The gift tax exclusion generally increases annually (though the amounts for 2026 remained the same as 2025), so you should check regularly to determine if you may be able to gift more assets on a tax-free basis.
There is also a federal estate tax exemption. As of 2026, it is $15 million per individual under the One Big Beautiful Bill (OBBB). As such, if you are planning to leave assets to family members after your death, federal tax will apply only if the total value of your estate exceeds the current federal estate tax exemption threshold. That number could change in the future, so it is important to ensure that you know the estate tax exemption amount.
New Jersey State Tax Implications
What about New Jersey state taxes? New Jersey does not have a state gift tax, and it also does not have an estate tax (it used to, but the state estate tax was repealed in 2018). As such, you do not have to worry about state taxes in these regards.
However, some inheritances may be taxed in New Jersey. Inheritance taxes are paid by the recipient, and you can speak with an estate planning attorney about specific assets and beneficiaries to determine whether an inheritance tax will need to be paid.
Contact Our Summit Estate Planning Attorneys Today for Assistance
Do you have questions about or need assistance transferring assets while minimizing taxes? One of the experienced Summit estate planning attorneys at Dempsey, Dempsey & Sheehan can assist you. Contact our firm today.
Sources:
law.justia.com/codes/new-jersey/title-3b/
nj.gov/treasury/taxation/inheritance-estate/inheritance.shtml
