What is Inheritance tax waiver?

 What is Inheritance tax waiver?

What is an Inheritance Tax Waiver 

A Tax waiver represents the written consent of the Director of the Division of Taxation to transfer or release certain property in the name of a decedent.

 

         Typically the attorney for the estate will prepare the Inheritance Tax Return

New Jersey property (such as real estate located in NJ, NJ bank and brokerage accounts, stocks of companies incorporated in NJ, and NJ bonds, etc.) cannot be transferred or released without this consent. 

If there is inheritance tax due, it must be paid prior to the tax waiver being issued by Trenton.

A separate waiver will be issued for each titled asset.

Each waiver will contain specific information about the property (such as: bank name, account balances, and names on the account).

         The original Waiver on real estate is filed with the County clerk where the property is located. (Typically the Attorney will handle).

       Example

Middlesex County Clerk

 

                                                                

                                                  Re: L-9 Property waiver

                                                  Estate of  _

 

 

Dear Middlesex County Clerk:

 

       Enclosed herewith please find the following:

1- Inheritance Tax Waiver

2-  Check for $15.00 for recording payable Middlesex County Clerk

3. Middlesex County Cover Sheet NJSA 46 26A 5

 

Would you kindly :

 

[  x ]  File and return a filed copy 

 

         The original waiver must be filed, not a copy.

 

More info at https://www.state.nj.us/treasury/taxation/inheritance-estate/inheritance-waivers.shtml

 

NJ Tax Guide A Guide to Being an Executor

Helpful information from the NJ Division of Taxation.

What if you are an Executor or Administrator of an estate? 

You are most likely looking to obtain waivers to release the decedent’s assets, such as NJ bank accounts, NJ stock, and NJ real estate. There are several steps to follow, and a few things you need to know before this can happen. 

Typically the attorney for the estate will prepare the Inheritance Tax Return.

What are the different types of waivers? 

A self-executing waiver (do-it-yourself) and the 0-1 waiver (issued by the Division of Taxation) are the different types of waivers. New Jersey banks are prohibited from closing a decedent’s bank accounts without one of these forms: 

 Form L-8 Self-Executing Waiver Affidavit can only be used when there is no Inheritance or Estate Taxes due (see below). 

 L-8s are to be filled out by you, as the estate representative. Then they can be sent or brought directly to the bank, transfer agent, or other financial institutions holding the funds. 

Many banks have these forms on hand, but they can also be obtained on our website.
o You do not file anything with the Inheritance and Estate Tax Branch if you qualify to use this form. 

 Form 0-1 is a “waiver” that can only be issued by the Division of Taxation.
o To get this form, you must file a return with the Division.
o Real Estate transfers always require Form 0-1.
o Note: 0-1 is not a form that you will be able to find on our website. This form can only be issued by the Division of Taxation. 

The original Waiver on real estate is filed with the County clerk. (Typically the Attorney will handle)

Are there any Inheritance or Estate Taxes Due? 

Your next job as Executor/Administrator is to figure out if any Inheritance or Estate taxes will be due. This will determine what forms or returns you will need to file. 

Besides the Federal estate tax, there are two separate State taxes related to a person’s death: the Inheritance Tax and the Estate Tax. You may owe one, but not the other. You will never pay more than the higher of the two taxes: 

 Inheritance Tax mainly depends on the relationship between the deceased person and the beneficiary. Estate proceeds payable to: 

Surviving spouses, parents, children, grandchildren, etc. are exempt from Inheritance Tax. These are Class A beneficiaries. 

 Brothers and sisters and children-in-law are subject to tax after built-in exemptions. These are Class C beneficiaries. 

Nieces, nephews, aunts, uncles, friends, and non-relatives are subject to Inheritance Tax. These are Class D beneficiaries. 

Charitable institutions are exempt from Inheritance Tax. These are Class E beneficiaries. 

If it turns out that Inheritance Tax may be due, the Inheritance Tax Resident Return (Form IT-R) needs to be filed. Any tax must be paid within eight months after the date of death or you will incur a 10% annual interest charge on unpaid tax. 

Sometimes, a return needs to be filed even if there might not be any tax due. If there are any Class C, D, or E beneficiaries, you will need to file a full return. . 

            

                      Form L-9: Resident Decedent Affidavit Requesting Real Property Tax Waiver. This Form needs to be filed with the Inheritance & Estate Tax Branch to receive a Form 0-1 Waiver for real estate. 
Non-Resident Decedents (someone who died as a legal resident of another state or a foreign
country): People who did not live in New Jersey, but owned certain types of property in New Jersey (usually real estate) may need to pay NJ Non-Resident Inheritance Tax. See New Jersey Non-Resident Inheritance Tax Frequently Asked Questions for more information. There is no Estate Tax on non-resident decedents. 
Other Important information for executors/administrators to know: 


                      Banks and financial institutions may release up to 50% of the entire amount of funds on hand before a waiver is received. These funds may only go to the executor or administrator or joint owner of the account(s). 


                      Banks also must pay (without a waiver) any checks for Inheritance/Estate Taxes written to New Jersey Inheritance and Estate Tax from a decedent’s account (if there are sufficient funds in the account, of course.) 


                      When filing any return for Inheritance Tax, the fair market value of decedent’s assets should be reported as of the date of death, not as of the filing date. 
How long does processing take? 
Once you have filed a return with the Division, please plan for processing to take at least several months. If a return must be audited, it may take several months longer. About 40 to 50% of returns require additional attention in the form of an audit. Returns are processed and audited in the order they are received. 
Inheritance and Estate Tax payments are usually posted within two weeks from the time they are received, but the processing of a return and issuing of waivers will take longer. 
Full details regarding the above information are available on our website or by calling the Inheritance and Estate Tax Hotline at 609-292-5033 M-F 8:30 a.m.- 4:30 p.m. EST. 

      
As executor, you may be required to file income tax returns on behalf of the decedent.  

YEAR OF DEATH	EXEMPTION LEVEL	RETURN REQUIRED
2016 or earlier	$675,000 including adjusted taxable gifts	IT-Estate
2017	$2 million	IT-Estate 2017
2018 or after	All exempt	No Estate Tax return

Source https://www.state.nj.us/treasury/taxation/documents/pdf/guides/General-%20Guide-to-Being-an-Executor

 

Writing intended as Will under N.J.S.A. 3B:3-3

  Writing intended as Will under N.J.S.A. 3B:3-3

         The NJ Legislature in 2005 effectively reversed the decision in Will of Ferree to permit certain writings and pre-printed forms when the New Probate Law was adopted. However, it usually requires hiring an attorney to file a complaint and Order to show cause.

         As set forth in the NJ SENATE JUDICIARY COMMITTEE STATEMENT TO

SENATE, No. 708:

         “…The bill also clarifies situations where writings that are intended as wills would be allowed, but requires that the burden of proof on the proponent would be by clear and convincing evidence.”

 

   N.J.S.3B:3-3 was amended to read as follows:

    3B:3-3. [Holographic will] Writings intended as wills.

    [A will which does not comply with N.J.S.3B:3-2 is valid as a holographic will, whether or not witnessed, if the signature and material provisions are in the handwriting of the testator- old statute]

    Although a document or writing added upon a document was not executed in compliance with N.J.S.3B:3-2, the document or writing is treated as if it had been executed in compliance with N.J.S.3B:3-2 if the proponent of the document or writing establishes by clear and convincing evidence that the decedent intended the document or writing to constitute: (1) the decedent's will; (2) a partial or complete revocation of the will; (3) an addition to or an alteration of the will; or (4) a partial or complete revival of his formerly revoked will or formerly revoked portion of the will.   New statute

 

         The intent of the Legislature was to overrule the decision in Will of Ferree.

 

   Requires a formal Complaint and Order to Show cause in the Superior Court.

 

Who pays the NJ Inheritance tax? The beneficiary does, unless the Will says the Estate pays the inheritance tax.

  Who pays the NJ Inheritance tax? 

 The beneficiary does, unless the Will says the Estate pays the inheritance tax.

    Transfer Inheritance Tax is a “beneficiary” tax, and is based on who specifically receives a decedent’s assets, and how much each beneficiary received. 

https://www.state.nj.us/treasury/taxation/pdf/other_forms/inheritance/o10c.pdf

 Currently, the law imposes a graduated Inheritance Tax ranging from 11% to 16% on the transfer of real and personal property with an aggregate value of $500 or more to certain beneficiaries. 

https://www.state.nj.us/treasury/taxation/pdf/other_forms/inheritance/o10c.pdf

Class C: First $25,000 free, then taxed at 11%. Calculate taxable amount, then multiply by 11% to calculate amount due.

 

Class ”C” - 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. 

First $ 25,000

Next 1,075,000  11%  tax

 

Class “D” - Every other transferee, distributee or beneficiary who is not included in Classes “A”, “C” or “E”. taxed at 15% Class D: taxed at 15%. Multiply amount by 15% to figure out tax due.

 

 

Benjamin Franklin famously said nothing in life is certain, except for death and taxes. Had he been alive today, he could have been referring to New Jersey. As of January 1, 2018, it no longer levies an estate tax, but that's not the case for many people who died in 2017 or their beneficiaries. There's also an inheritance tax and understanding the rules governing the NJ inheritance tax will ensure that you make the right financial decisions related to your role as a beneficiary.

                  Certain beneficiaries are exempt from the inheritance tax in the state of NJ. Others will be required to pay a tax on the inheritance based on the classification given them by the state.

Looking For Information About Spouses

If you’re married, you can leave all your assets to your spouse free of charge. Spouses are exempt from paying inheritance tax, and if everything you own goes to your spouse in your will, New Jersey won’t tax your estate, either. However, a caveat exists. 

When someone passes away, New Jersey immediately places a tax lien against everything the person owned so the executor can’t legally transfer or sell any assets without the state getting its tax cut. 

Also, someone does not want to buy a property that has the tax lien attached.

The executor must file Form L-9 for any real estate you owned and Form L-8 for financial assets with the Division of Taxation to have the liens lifted so your spouse can inherit them.

For non-spouse beneficiaries, the full inheritance tax return must be filed.

        To have your Inheritance and Estate Tax questions answered by a Division representative, inquire as to the status of an Inheritance or Estate Tax matter, or have Inheritance and Estate Tax forms mailed to you, contact the Inheritance and Estate Tax Service Center at 609-292-5033 or email Taxation.NJInheritancetax@treas.nj.gov.

 

Obtaining More Information About Other Individuals

Your children, parents, grandparents and grandchildren do not have to pay inheritance tax on anything you leave them. However, bequeathing to them does not avoid your estate having to pay taxes on the assets you leave behind. For those dying in 2017 with an estate worth more than $2 million, estate tax is due in New Jersey. Your stepchildren and adopted children are included among these Class A beneficiaries.

 

New Jersey places your siblings and in-laws in its Class C beneficiary category. The state now exempts the initial $25,000 of the amount you leave to any of these people, but beyond that, they have to pay a rate that may reach as high as 16 percent.

If you leave everything to the housekeeper who cared for you in your old age, she’s going to pay dearly in New Jersey. She must pay 15 percent of everything worth up to $700,000, and 16 percent on any value over that. She’s considered a Class D beneficiary. This category catches everyone who doesn’t fall into Classes A or C. There is no Class B in New Jersey. Friends, significant others and business associates are all Class D beneficiaries.

   If you leave everything to the housekeeper who cared for you in your old age, she’s going to pay dearly in New Jersey. She must pay 15 percent of everything worth up to $700,000, and 16 percent on any value over that. She’s considered a Class D beneficiary. This category catches everyone who doesn’t fall into Classes A or C. There is no Class B in New Jersey. Friends, significant others and business associates are all Class D beneficiaries.

Of course, if you choose to name the state of New Jersey as one of your beneficiaries, the state doesn't impose a NJ death tax. You can also leave everything to charity free of charge.

 

https://pocketsense.com/pays-inheritance-tax-new-jersey-1861.html

 

     When to File Inheritance Tax 

   The executor, administrator, or heir-at-law of the estate must file an Inheritance Tax return (if required) within eight (8) months of the date of the decedent’s death. If tax is due, the tax also must be paid on the transfer of taxable real or personal property within eight (8) months of the date of the decedent’s death.

Interest always due at 10%
Interest is calculated at the annual rate of 10% on any direct tax or portion not paid within eight (8) months of the date of the decedent’s death. To make a payment and avoid potential interest, please see How To Pay.

No Extension to File permitted
There is no extension of time to pay tax due. Interest charges still apply to any unpaid tax. An extension of time is given only to file the return. If you cannot file the return on time, you may complete Form IT-EXT,  Inheritance and Estate Tax Application for Extension of Time to File a Return. 

Resident Decedents - What to File

You must file a paper return or form(s) to determine whether any tax is due or when a waiver is needed.

Note: Electronic filing is not available for Inheritance and Estate Tax returns.

Source https://www.state.nj.us/treasury/taxation/inheritance-estate/inheritance-taxfilerequirements.shtml

How to request access to a deceased family member's Apple account

 How to request access to a deceased family member's Apple account

This article explains how to request access to or delete someone’s Apple ID and the data stored with it after they have passed away.

Every day, people all over the world save important documents, memories, and more on their Apple devices and in iCloud. At Apple, we consider privacy to be a fundamental human right, and our users expect us to help keep their information private and secure at all times. In the unfortunate event of a customer’s death, Apple provides options for their loved ones to request access to or delete their Apple ID and the data stored with it.

While we may also be able to help remove Activation Lock from devices that use your loved one’s original Apple ID, their iPhone, iPod, and iPad will need to be restored to factory settings before they can be used with another Apple ID. Please note that devices locked with a passcode are protected by passcode encryption, and Apple can't help remove the passcode lock without erasing the device.

For security, Apple requires and verifies legal documentation before we can assist with a deceased person’s account. This generally includes a death certificate, and may also require a court order or other documentation. The requirements vary by country and region. We have great sympathy for surviving family members and try to help with requests as much and as quickly as possible.

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If you have a Legacy Contact access key

Starting in iOS 15.2, iPadOS 15.2, and macOS 12.1, Apple users can add a Legacy Contact for their Apple ID. Adding a Legacy Contact is the easiest, most secure way to give someone they trust access to the data they stored in their Apple account after they pass away. 

If you're a Legacy Contact for a family member or friend who passed away—and you have both the unique access key they created when they added you as a Legacy Contact and their death certificate—you can start a request right on your device* or on the Digital Legacy - Request Access page.  

If you don't have a Legacy Contact access key, you can still ask to delete an account or request access to an account using the options below.

If you want to delete an Apple ID permanently

If you'd like to request the permanent deletion of an Apple ID and data for someone who passed away, you'll need your Apple ID, the Apple ID for the account that you want to delete, and required legal documentation for your country or region.

You can start a request to delete a deceased person's Apple ID on the Digital Legacy - Delete Apple ID page.

If you're not sure whether the email address that you have for the deceased person is associated with an Apple ID, you can use iforgot.apple.com to check. If you don’t have an Apple ID of your own, you can create one.

Request access with a court order or other legal documentation

In the U.S. and other locales, you can request access to a deceased person’s Apple ID and data with a court order that names you as the rightful inheritor of your loved one’s personal information. In some jurisdictions, such as France, Germany, Japan, Australia, and New Zealand, alternative documentation and process instead of a court order are accepted.

Where applicable, the court order needs to specify:

·       The name and Apple ID of the deceased person.

·       The name of the next of kin who is requesting access to the decedent’s account.

·       That the decedent was the user of all accounts associated with the Apple ID.

·       That the requestor is the decedent’s legal personal representative, agent, or heir, whose authorization constitutes "lawful consent.”

·       That Apple is ordered by the court to assist in the provision of access to the decedent’s information from the deceased person's accounts. The court order should be addressed to the relevant Apple entity. 

If you have a court order with this information, or if you need additional help, please contact Apple Support.

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About estate planning 

We encourage Apple users to consider adding a Legacy Contact for your Apple ID* or an inheritance plan to your will that covers the personal information you store on your devices and in iCloud.

This can simplify the process of acquiring a legal order and reduce delay and frustration for family members during a difficult time.

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Learn more

·       Learn how to add a Legacy Contact for your Apple ID.

·       Learn what you should know if you were added as a Legacy Contact. 

·       Learn how to remove Activation Lock.

 

* To add a Legacy Contact, store a Legacy Contact access key, or make a Legacy Contact request on your device, you need a device with iOS 15.2, iPadOS 15.2, or macOS 12.1 or later.

 

Source https://support.apple.com/en-us/HT208510