Recently, the New Jersey Legislature revised the New Jersey Estate Tax.  For 2017, estates, plus certain gifts, with a total value of under $2 million do not have to file an estate tax return.  For 2018, and thereafter, they have eliminated the New Jersey Estate tax.

Two cautions.  First, the next legislature could restore the estate tax in some form.  Second, the state has not revised or eliminated the inheritance tax.  Therefore, this discussion applies only to those estates which would have to file only an estate tax but are under the threshold.

First, you must probate the will.  A signed copy of the decedent’s will, along with any codicils or amendments, gets submitted to the surrogate of the county in which the decedent resided by the executor or by a surviving relative, if no executor exists.  The surrogate, unless someone contests the will, issues a paper called Letters Testamentary.  

The Letters Testamentary authorizes someone, usually the person named in the will, to act as executor.  The executor's responsibilities include carrying out the decedent’s will and confirming payment of all taxes.   

The executor should read the will and any codicils.  He or she should make certain he or she understands the will.   This is because the executor is responsible for carrying out the provisions of the will and any codicils.

The executor may consider hiring an attorney to help, especially if the will is complex.  Usually estates under $2 million are not complex.  Therefore, this is generally not an issue.

The executor will then gather information about the assets and liabilities of the decedent.  If the executor was close to the decedent this may not be difficult.  In other cases, this process may be time-consuming.  In the latter case, a good place to start is with the decedent’s tax return.

Once you gather information about the assets and liabilities, you then pay the liabilities, if that conforms with the will.  Most wills do provide for the payment of debts, except for mortgages on real property.

After the executor pays the liabilities (and the decedent’s remains have been properly cared for), the assets of the estate can be distributed according to the will.  In New Jersey the state will issue a paper called a waiver once you pay all relevant estate and inheritance taxes.

If no tax is due (as in this case), the executor can prepare a self-executing waiver.  For bank accounts and securities, you complete this on a Form L-8 and for real estate, you complete a Form L-9.

The executor completes a Form L-8 for each bank or brokerage house at which the decedent had at least one account.  However with all accounts at one bank or brokerage house you can report on one form.    The executor keeps one copy of the completed form.  The recipient files one copy with the state.

There are separate Forms L-9 for resident and non-resident decedents.  The L-9 is an abbreviated version of the New Jersey Estate Tax return.  You submit it to the state to obtain waivers to complete the sale of real estate.

We can help you complete these forms and answer any questions you might have.  Please feel free to contact us.