Key Points

1. Tax Waiver Forms:

• Form IT-R: Covers all assets to release funds from bank accounts, investments, or real estate.
• Form L-8: Releases funds from bank accounts or investment accounts (e.g., TD Bank, Fidelity, Schwab).
• Form L-9: Used for real estate tax waivers to release proceeds from selling real estate.

2. Classes of Beneficiaries:

• Class A: Immediate family members (spouses, children, stepchildren, grandchildren, parents, grandparents). No tax due.
• Class C: Siblings and in-laws of the decedent. Tax is 11% on amounts over $25,000.
• Class D: Extended relatives (nieces, nephews, friends). Tax is 15% to 16% on amounts over $500.
• Class E: Nonprofits like hospitals, schools, and churches. No tax due, but waivers must still be obtained by filing Form IT-R.

3. Examples of Tax Implications:

• Class A: Beneficiaries pay no taxes and can file Form L-8 or L-9 directly with the bank or state.
• Class C: Beneficiaries may face taxes of 11% on inheritance amounts over $25,000.
• Class D: Beneficiaries pay 15%-16% tax if the amount inherited is above $500.
• Class E: Beneficiaries must file forms even when no tax is due.

4. Executor Liability:

Executors are personally liable for unpaid taxes if they distribute assets without settling the inheritance tax first. It is highly recommended to hire a tax professional or attorney specializing in New Jersey inheritance tax filings. These forms are subject to audits.

Conclusion:

The process involves submitting the appropriate tax waiver forms based on the class of beneficiaries and the type of assets involved. Executors should seek professional guidance to ensure tax compliance and avoid liability.