25 Sep I inherited a Roth from my sister. How do I get the money?

Q. I inherited a Roth IRA from my sister, who recently passed. She lived in New Jersey but I live in Pennsylvania. I have already opened an account to receive these funds, however, I was told I need to get a tax waiver from the New Jersey Treasury. This has proven to be much more difficult than I thought, and the folks at Treasury have not been helpful at all. My sister did not have a will so her two kids are next of kin and are handling her estate. As the beneficiary of funds, I would think that this has nothing to do with her estate. I was told as a Class C beneficiary, I would need an 01 waiver, but I do not know how to get this.
— Beneficiary

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

There are often complications with inheritances — especially when an inheritance tax is due — so let’s break it down.

The transfer of an IRA to a Class C beneficiary, which includes a sibling, daughter-in law or son-in-law, is subject to the New Jersey inheritance tax to the extent the account exceeds $25,000, said Catherine Romania, an estate planning attorney with Witman Stadtmauer in Florham Park.

The tax rate is from 11% to 15%, depending on the amount of the inheritance, she said.

“Absent a provision in a will making the estate responsible for the tax, each beneficiary is responsible for the tax on the inheritance received, which can be paid from the asset itself or from the beneficiary’s other funds,” Romania said. “The tax owed is a lien against the asset and remains for 15 years from the date of decedent’s death.”

A financial institution may, but is not required to, release one-half of the account without a waiver — (Form 0-1) issued by the New Jersey Division of Taxation, she said. However, once the tax is paid and the waiver issued, the account will be released in full, she said.

The executors (where a will is probated) or administrators (if no will) appointed are responsible for filing the New Jersey Inheritance Tax Return (Form IT-R) and ensuring the tax is paid within eight months of the date of death, she said.

Although an extension of time to file may be obtained, the tax must be paid or interest accrues, she said.

“Unfortunately, a beneficiary is permitted to sign and file the return only where executors or administrators are not appointed by the surrogate,” she said. “The rationale is that the New Jersey Division of Taxation only wants to work with the individuals officially representing the estate once they are appointed.”

You said your sister’s children are “handling the estate,” but let’s run through all the options.

If there was no appointed representative of the estate, the beneficiary may act to complete the Form IT-R, file it with the New Jersey Division of Taxation, pay any applicable tax, and obtain the Form 0-1 to provide to the financial institution holding the account in order to have the account released, Romania said.

Once there is a representative appointed — as it seems you said with her kids “handling the estate” — the beneficiary must work with that representative to have a Form IT-R prepared and timely filed to obtain the waiver to release the account, Romania said.

“You are not the first or only beneficiary of a non-probate asset — for example an asset that passes by beneficiary designation and not under the will — who has expressed frustration with having to rely on an executor or administrator who may be without incentive to act in a timely fashion or may be just too busy with other estate administrative matters to address your concern before the filing deadline,” she said.

So it sounds like you need to talk to your sister’s kids to get this ball rolling.

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This story was originally published in September 2025.

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.