How Do I Access a Deceased Owner’s Account? Part 3

In my blog posts the past 2 weeks I have addressed this commonly asked question.  I explained the distinction between probate assets – ones controlled by a will or the intestacy laws – and non-probate assets which are not.  Generally, an executor or administrator must be appointed before an account can be accessed.  On the other hand,  if the account has a joint owner with right of survivorship or beneficiary on death, that person (or persons if more than one co-owner or beneficiary exists) can immediately access the account by presenting a death certificate.

I discussed last week that this person can unfreeze and become the owner of the account, but I alluded to a potential holdup.  That is because of something called the New Jersey tax waiver system.  This process is designed to protect the NewJersey’s interest in insuring that its inheritance tax is paid.  

Inheritance tax is payable as a result of and after one’s death. The tax is determined not by the size of the deceased person’s estate (that would be an estate tax which New Jersey eliminated in 2018), but instead by the relationship of the heirs to the person who died.  Only a small percentage of estates actually owe inheritance tax.  The reason is because most people leave their estates exclusively to spouses, children and grandchildren who are categorized as Class A heirs, exempt from the tax.  Other more distant relatives and non-relatives are placed in different classes, each with different tax rates.

By law when someone dies, New Jersey automatically has a lien on assets in New Jersey financial institutions and on New Jersey real estate.  So, how big is this lien and how does one get the State to release it?  We’ll cover that next week.