Releasing Frozen Funds

When someone passes away in New Jersey, it is common for financial institutions to freeze 50% of the funds in bank and investment accounts until a Form 0-1 tax waiver is issued. To unfreeze these funds, the executor must obtain a New Jersey inheritance tax waiver, which involves the submission of appropriate forms

Tax Waiver Forms

Several forms are used to obtain Form 0-1 tax waivers for releasing funds from estates, depending on the class of the beneficiary:

- Form IT-R or IT-NR: This comprehensive form covers all assets and is required for Class C, Class D, and Class E beneficiaries. It is often complex and subject to audits by the New Jersey Division of Taxation.

- Form L-8: Used exclusively by Class A beneficiaries to release funds from bank accounts and investment accounts. Documentation is submitted directly to the financial institution to obtain the waiver.

- Form L-9: Designed for Class A beneficiaries, this form is used to obtain a real estate tax waiver. It is submitted to the New Jersey Division of Taxation to release funds from real estate sales.