Legal Question in Wills and Trusts in New Jersey
Estate tax returns
My wife's mother died recently; she has a simple will that divides the estate between my wife and my wife's brother, the sole surviving heirs. The estate is approximately $200K in cash and securities. There is obviously no federal tax liability (except for an IRA, but that'll be handled as ordinary income by the beneficiary), and since the heirs are children, no NJ liability. Does the estate need to file any returns at all? Do we need to get any kind of tax waiver before we liquidate the securities (we already transferred everything to an estate account)?
2 Answers from Attorneys
Re: Estate tax returns
Depending on the stock transfer agent, you may not have to file any returns. If one is requested, the L-8 return is not difficult to complete. The L-8 will produce a waiver for you.
Re: Estate tax returns
Presuming that none of the security issuers requires a Waiver (usually only NJ based entities require one) all that should be required to transfer the assets would be an original death certificate and a Surrogate's Certificate for each security. Since they are already in an estate account, you should ask the broker to split the estate account in half and create 2 new accounts, one for your wife and one for her brother. The IRA account should also be split, with both of them receiving the forms to report the distribution for income tax purposes. To close the estate, each of them also needs to file a Release and Refunding Bond with the Surrogate's office, reflecting their share of the estate. If you need assistance, contact me directly.
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