22 Jan My sister died. How can I get funds released from her bank accounts?

Q. My sister passed away in New Jersey in November 2023. I’m her executrix and need access to her bank accounts, which are on hold. Is there another form besides the L-8 since I’m not a Class A beneficiary?
— Sibling

A. We’re sorry to hear about your sister.

There are several items to consider as you serve as her executor.

When a New Jersey resident dies, there is a New Jersey transfer inheritance tax lien on all property owned by the decedent for a period of 15 years from the date of death unless the tax is paid or a waiver is obtained, said Catherine Romania, an estate planning attorney with Witman Stadtmauer in Florham Park.

However, she said, there is a blanket waiver provided with respect to 50% of the total funds in a decedent’s bank or financial account.

“This allows the executor — or transfer-on-death beneficiary — to access up to 50% of the account without additional tax filings,” Romania said.

In addition, funds can be released from the decedent’s account directly to the New Jersey Division of Taxation to pay any inheritance tax due, she said.

In order to obtain release of the remainder of the account, an additional form must be filed, she said.

“The L-8 can be provided to the financial institution if all of the beneficiaries are Class A, namely a surviving spouse, civil union partner or domestic partner; child, stepchild, grandchild, great-grandchild, parent or grandparent,” she said. “In all other cases, the Inheritance Tax Resident Return (Form IT-R) would be required (or IT-NR for non-residents).”

Romania said the return date and date payment of any tax is due is eight months after death.

Waivers (Form 0-1) will be issued by the Division of Taxation thereafter which can be presented to the financial institution to obtain a release of the remaining funds, she said.

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This story was originally published in January 2024.

NJMoneyHelp.com presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.