Inheritance tax waiver

What it means

In some states an institution may not release an account, a security or a vehicle until the state confirms the tax position. The waiver is that confirmation.

States that use waivers usually publish exemptions — transfers to a surviving spouse, or below a stated value — and a blanket waiver may cover a whole class of transfer.

It is separate from paying the tax. A waiver can be issued because nothing is owed.

Why it matters

It is a step that stays invisible until a bank refuses to release an account, and obtaining one can take weeks.

Knowing whether the state uses waivers at all, and whether this transfer is exempt, is usually the difference between a delay and none.

When you are likely to meet it

• When a bank or transfer agent refuses to release an asset.
• When transferring a vehicle in a state that charges inheritance tax.
• When an estate holds securities registered in such a state.

How this varies by state

Which states use waivers, what they exempt, and which institutions must demand one are all set by state law.

Related terms

• Certificate of titleThe state-issued document that proves who owns a vehicle — and whose issuing state decides the procedure after a death.
• Estate taxA tax on the value of what somebody left, paid by the estate before anything is distributed.
• Inheritance taxA tax on what a person receives from an estate, charged to the recipient rather than to the estate — and only in a few states.
• Non-probate assetSomething that passes to a new owner automatically, without a court.
• Transfer agentThe company a corporation employs to keep its share register and to move shares from one owner to another.

Sahvelo guidance that uses this

• New Jersey inheritance tax
• Taxes after a death