10 May After death, trying to avoid inheritance tax
Q. My brother did his will a year ago because he was very sick. He went to a free clinic. He left everything to his three sisters who were taking care of him. He had no idea of this Class C situation, which means the inheritance tax will be a lot. Otherwise he would have left everything to mom. Do we have any recourse?
A. This won’t be easy.
Your brother’s estate is certainly subject to the inheritance tax.
Sisters are Class C beneficiaries subject to New Jersey inheritance tax at a rate as high as 16 percent, said William McDevitt, a certified public accountant with Wilkin & Guttenplan in East Brunswick.
And you’re correct that he could have written the will to leave everything to his mother.
“A parent is a Class A beneficiary not subject to tax,” McDevitt said. “Then Mom could have gifted or willed the proceeds to her daughters with no New Jersey Inheritance tax.”
Now that he has passed, the sisters could “disclaim” their inheritance if it’s within nine months of his death, McDevitt said.
“But before disclaiming they would need to review with an attorney where the proceeds would be directed if they do so,” he said. “Moral to this story is a `free’ will may cost your heirs a bundle.”
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