New Jersey Inheritance Tax, A Waiver Shortcut (Form L-8 or L-9)
By Peter Klenk, Esq.
New Jersey provides its citizens the opportunity to pay two “Death Taxes”; the New Jersey Inheritance Tax and the New Jersey Estate Transfer Tax. These taxes are transfer taxes…not income taxes, sales taxes or use taxes…they represent a tax on the privilege of transferring assets from one person (the deceased) to someone else (the beneficiary).
The New Jersey Division of Taxation insures it will receive its tax revenue from the New Jersey Inheritance Tax by requiring banks, title companies, stockbrokers, wealth advisors and other financial institutions to hold one-half the amount in the accounts until they receive proof that the Inheritance Tax has been paid. This proof can take two forms. The first is a Waiver from the Division of Taxation issued once the New Jersey Inheritance Tax Return has been filed and the amount due as been paid in full. The second is a Waiver obtained by filing a Form L-8 or L-9.
Because spouses, civil union partners, children, stepchildren, grandchildren and parents of the deceased are exempt from the New Jersey Inheritance Tax, often no Inheritance Tax Return need be filed, but a Waiver is needed to obtain the remaining one-half of the funds held by the bank or other institution. In such cases, the Form L-8 may be used to secure the Waiver or a From L-9 (or Form L-9NR for a non-resident decedent) may be filed to release New Jersey’s lien on real property.
You may find more information about the Forms L-8, L-9 and L-NR on our website, Klenklaw.com. Our firm focuses exclusively in the area of Estate Planning and Probate, so if you need assistance in a Probate matter please call us for a free consultation.