Unlike most jurisdictions, New Jersey imposes an inheritance tax on certain heirs who receive assets from a decedent’s estate. The tax is based on the relationship between the decedent and the beneficiary, as well as the value of the inheritance. There are instances where the Division of Taxation makes a mistake, however. With the inheritance tax running as high as 16 percent of asset value, it is important to take timely action if you believe you’ve been the victim of an incorrect assessment.  

The Inheritance and Estate Taxes Branch sets forth strict rules for filing an inheritance tax appeal. When you are contacted regarding your inheritance tax obligation, you only have 90 days from the date of the notice to challenge the decision. After that, the determination becomes final. To commence an appeal, you must either file a complaint in New Jersey Tax Court or send a letter to the branch chief explaining the basis for your protest.  

Some appeals stem from the fact that the Division of Taxation has misclassified the relationship between the decedent and the heir. Under state law, inheritance tax is not imposed on spouses, children, parents and grandchildren of someone who dies. Religious and qualified charitable organizations are also exempt. Siblings and spouses of the decedent’s children are subject to taxation, and rates are higher for more distant relatives or heirs with no family connection. Other appeals are based on alleged overvaluation of assets left to distributes. 

When filing an appeal, it is essential to include evidence supporting your case. This may include financial statements, appraisals, beneficiary relationships, or other relevant documents. These materials will help substantiate your claim that the assessment is incorrect. The following information must be included:

• The decedent’s name, date of death, Social Security Number and county of residence

• Contact information for the personal representative for the decedent’s estate

• A copy of the determination and the amount of tax being assessed

After filing, a hearing might be scheduled to review the case. In some instances, disputes may be resolved through negotiation with the Division of Taxation. Filing an inheritance tax appeal can be a complex and time-sensitive process. An experienced attorney can help identify errors, gather necessary documentation and represent you effectively in pursuit of an appropriate resolution.

At Parsons & Nardelli in Red Bank, we assist clients throughout New Jersey with a wide range of matters related to wills and probate administration. If you’re considering challenging a recently probated will, please call 888-309-5589 or contact us online to make an appointment.