Selling an inherited house in New Jersey: Surrogate's Court, inheritance tax and waivers
Short answer
To sell an inherited house in New Jersey, someone first needs authority from the Surrogate in the county where the owner lived: letters testamentary for the executor named in a will, or letters of administration if there is no will. The state's inheritance tax lien on the house must also be released with a tax waiver (Form 0-1), which estates where every heir is a close relative usually request with Form L-9.
- No will can be admitted to probate until 10 days after the death (N.J.S.A. 3B:3-22). Surrogates issue letters from the 11th day (Mercer County Surrogate; Camden County Surrogate).
- Without a will, the surviving spouse has the first right to administer, then the other heirs (N.J.S.A. 3B:10-2).
- New Jersey has had no estate tax for deaths on or after January 1, 2018, but it still has an inheritance tax that depends on who inherits (NJ Division of Taxation).
- Spouses, children, grandchildren, parents and stepchildren (Class A) pay no inheritance tax. Siblings pay 11% to 16% after the first $25,000; most others pay 15% to 16% (Division of Taxation).
- Real estate transfers always require a Form 0-1 waiver from the Division of Taxation (Executor's Guide). The tax is a lien on the decedent's property for 15 years unless paid (N.J.S.A. 54:35-5).
Probate at the county Surrogate
In New Jersey, probate starts at the Surrogate's Court in the county where the person lived when they died. Each county has one, listed in the NJ Courts directory of county Surrogates. Mercer County's Surrogate says the probate "must be filed in the county where the decedent resided at the time of death," with the original will and a certified death certificate (Mercer County Surrogate).
State law adds a short wait: "No will shall be admitted to probate until after 10 days from the death" (N.J.S.A. 3B:3-22). You can start the paperwork earlier, but Mercer's Surrogate explains that short certificates are not issued until the 11th day. The 10 days give an heir time to file a caveat (an objection) (Mercer County Surrogate).
When the will is admitted, the Surrogate issues letters testamentary and executor short certificates. A short certificate is what the executor shows banks, title companies and buyers as proof of authority "to transfer or sell assets of the deceased" (Mercer). Within 60 days of probate, the executor must mail notice to the beneficiaries and heirs (Camden County Surrogate). Mercer's Surrogate also notes that creditors generally have nine months from the death to present claims to the executor.
Administration when there's no will
If there is no will, the Surrogate appoints an administrator. By statute, the surviving spouse or domestic partner has the first right. If they decline, letters go to the remaining heirs. If no heir claims administration within 40 days of the death, the court or Surrogate can appoint "any fit person" (N.J.S.A. 3B:10-2).
Mercer County's Surrogate lists the steps (Mercer County Surrogate, administration):
- Apply in the county where the person lived. Administration is not granted until the fifth day after the death.
- List the next of kin. An applicant without first priority needs written renunciations from relatives with an equal or prior right, or proof that they were notified.
- Post a surety bond if the Surrogate requires one, based on the estate's value and the family situation.
- Receive letters of administration and administration short certificates, which work like an executor's.
Who inherits without a will is set by the intestacy statutes (N.J.S.A. 3B:5-3 and 3B:5-4, per the Camden County Surrogate). That matters for the tax step below, because the tax depends on each heir's relationship.
Inheritance tax by beneficiary class
New Jersey no longer has an estate tax for deaths on or after January 1, 2018. It still has a transfer inheritance tax, which depends on who receives the property and how they were related to the person who died. Where the beneficiaries live is not a factor (NJ Division of Taxation).
| Class | Who it includes | Tax rate |
|---|---|---|
| Class A | Spouse, civil union or domestic partner, child (including adopted), grandchild and other lineal descendants, parent, grandparent, stepchild | No tax |
| Class C | Brother or sister; a child's spouse or civil union partner | First $25,000 exempt; then 11%, 13%, 14% and 16% in brackets |
| Class D | Anyone not in Classes A, C or E, such as nieces, nephews and friends | 15% on the first $700,000; 16% above |
| Class E | Qualified charities, religious, educational and medical institutions, the State | Exempt |
Sources: Inheritance Tax Beneficiary Classes and Inheritance Tax Rates, NJ Division of Taxation. Step-grandchildren are not Class A.
If a return is required, it is due, and any tax must be paid, within eight months of the death. Unpaid tax after that accrues interest at 10% a year. An extension is available to file, not to pay (Division of Taxation, filing requirements).
Tax waivers to transfer real estate
The inheritance tax is a lien on everything the person owned at death for 15 years unless it is paid (N.J.S.A. 54:35-5). To clear that lien on a house, the estate needs a tax waiver, Form 0-1, issued only by the Division of Taxation. It is not a form you can download and fill out yourself (Division of Taxation, waiver requirements). The Executor's Guide puts it plainly: "Real Estate transfers always require Form 0-1" (Executor's Guide).
- Form L-9 is how a resident estate asks for a real estate waiver when every beneficiary is Class A, no New Jersey tax is due, and no return is required. The executor, administrator or a joint tenant files it with copies of the will, the deed, the letters and the death certificate (Form L-9).
- Form L-8 is a self-executing waiver for bank and brokerage accounts. It does not cover real estate (waiver requirements).
- If any beneficiary is not Class A, the estate files an inheritance tax return (Form IT-R), and the Division issues waivers after reviewing it (filing requirements).
- A home held by a married couple as tenants by the entirety passes to the surviving spouse without a waiver (waiver requirements).
Who signs the deed
Usually the executor or administrator. Unless the will or a court order says otherwise, a New Jersey fiduciary has the power to sell estate real property "at public or private sale," except property that the will gives to a specific person (N.J.S.A. 3B:14-23). When the will leaves the house to a named person, or heirs disagree, the estate's attorney can tell you whose signatures the title company will need.
At closing, the title company will typically ask for the short certificate and the 0-1 waiver. The sale proceeds pay off any mortgage and costs, including New Jersey's seller-paid Realty Transfer Fee (see transfer tax by state), and the rest goes to the estate.
Many inherited houses need work, and the heirs live elsewhere. If you'd rather not repair, clean out or list the house, we can make a written cash offer anywhere in New Jersey, including Trenton and Camden County. If the house is behind on property taxes, see New Jersey tax sale certificates.
Frequently asked questions
How soon after a death can a will be probated in New Jersey?
Not until 10 days have passed. N.J.S.A. 3B:3-22 bars admitting a will to probate until after 10 days from the death, and county Surrogates issue letters and short certificates from the 11th day. You can bring the will in earlier to start the paperwork.
Do my children pay New Jersey inheritance tax on a house I leave them?
No. Children, grandchildren, a spouse, parents, grandparents and stepchildren are Class A beneficiaries, and no inheritance tax is due on what they receive. A waiver is still needed to transfer the real estate.
Does New Jersey still have an estate tax?
No. There is no New Jersey estate tax for deaths on or after January 1, 2018. The separate inheritance tax still applies to Class C and Class D beneficiaries, such as siblings, nieces, nephews and friends.
What is Form L-9?
It is the affidavit a resident estate files with the Division of Taxation to get a real estate tax waiver (Form 0-1) when every beneficiary is Class A, no tax is due, and no return is required. It must include the will, deed, letters and death certificate.
Can the executor sell the house without every heir agreeing?
Often, yes. A New Jersey fiduciary has power to sell estate real property unless the will or a court order limits it, or the will leaves the house to a specific person. Disagreements among heirs are a reason to involve the estate's attorney early.
When is New Jersey inheritance tax due?
Within eight months of the death. Tax not paid by then accrues interest at 10% a year. You can get an extension to file the return, but not to pay the tax.
Sources
- NJ Division of Taxation, Inheritance and Estate Tax, Tax Rates, Beneficiary Classes, Filing Requirements, Tax Waiver Requirements, Form L-9 and Executor's Guide to Inheritance and Estate Taxes
- New Jersey Statutes: 3B:3-22, 3B:10-2, 3B:14-23, 54:35-5
- Mercer County Surrogate, Probate of Wills and Administration of Estate (No Will)
- Camden County Surrogate's Court, Probate FAQ
- New Jersey Courts, County Surrogates directory
This is general information, not legal or tax advice. Estate and tax rules depend on the facts and can change. For advice, contact your county Surrogate, the Division of Taxation's Inheritance and Estate Tax Branch at 609-292-5033, Legal Services of New Jersey, or a New Jersey estate attorney.