Joint Bank Accounts Upon Death

 Joint Bank Accounts Upon Death 

         Even if there is a joint bank account, there may be an Inheritance Tax due.  There is a tax due for Class ”C” beneficiaries- Brother or sister of the decedent, including half brother and half sister, wife or widow of a son of the decedent, or husband or widower of a daughter of the decedent.  -taxed at 11%–16%, with the first $25,000 exempt. 

 

Class “D” - Every other transferee, distributee or beneficiary who is not included in Classes “A”, “C” or “E”. They are taxed at 15%. 

  Your attorney will assist by preparing the Inheritance Tax returns.

         An excellent explanation on handling joint accounts is found at http://www.co.cumberland.nj.us/content/173/2139/3327/969.aspx#16

 

How do I handle joint bank accounts or certificates of deposit?

Certain bank accounts and certificates may be owned with rights of survivorship, which means that upon the death of one party to the account, the surviving party (or parties) become the sole owner (owners). If the decedent maintained such an account, the survivor will be able to withdraw one-half of the funds in the account by giving the bank a death Certificate and without the need to provide anything from the Surrogate. The other half will not be released until a tax waiver is issued by the New Jersey transfer Inheritance Tax Bureau, normally after the tax is paid and the return is filed.

Under the new inheritance tax laws governing estates from spouse to spouse, when the bank account is co-owned, funds may be transferred with a copy of the death certificate, without any type of certificate from the surrogate's office. The spouse will sign an L-8 tax waiver, usually completed by the financial institute. If the account is in the name of the decedent only, the bank will require a certificate from the surrogate in addition to the L-8.

When the bank account is co-owned by any other Class A, (parents, grandparents, children, grandchildren, adopted children, or stepchildren), the procedure is the same as spouse to spouse, except the co-owner will sign an L-8 tax waiver. If the account is in the name of the decedent only, the bank will require a certification from the surrogate in addition to the L-8.

 

If the particular bank is ignorant of NJ law, file a formal complaint for free against the bank and bank employee with

New Jersey Department of Banking and Insurance Consumer Inquiry and Response Center (“CIRC”) P.O. Box 471 – Trenton, New Jersey 08625-0471 

Phone: (609) 292-7272 Fax: (609) 777-0508 or (609) 292-2431