20 May How can I get money from this account after co-owner died?

Q. I have one checking and one savings account in Florida. One is funded with my pension and the other with my Social Security, both with direct deposit. All transactions, which I can prove with bank statements, were sent to me. I had my brother’s name added to the accounts as I was going for open heart surgery. He lived in New Jersey and also had his own accounts with the same bank. When he died in November 2023, I went to remove him from my accounts with a copy of the death certificate. The next thing? My balances were zeroed out. Then later, the bank put back half the balance for each account and held the total of $2500 as unavailable. My sister-in-law filed his final taxes and did not include the money from my accounts as she knew they were mine. The bank is now saying I need a waiver and the taxes must be paid before they will send me a waiver. What do I do?
— Rightful owner

A. We’re sorry to hear of the losses of your siblings.

Your story is a prime example of unintended consequences that can happen when someone adds a second person on their bank accounts.

In New Jersey, there is a general presumption that your brother is considered to have been the full owner of the account, and you, as the surviving tenant, are presumed to have inherited the entire account, not just a portion of it, said Mark Balian, partner and chair of the tax, trusts and estates department at Wells, Jaworski & Liebman in Paramus.

However, he said, this assumption can be challenged if you can demonstrate that the funds in the account were contributed entirely by you and not your brother.

“In order to release the account, the bank does need to receive a tax wavier Form L-01 in its original form issued by the Division of Taxation,” he said. “You can obtain a tax waiver by having your sister-in-law file — or amend — the Inheritance Tax Return (NJ IT-R) by listing the account and submitting it with proof that the funds were entirely contributed by you.”

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This story was originally published in May 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.