Short answer
The lien is on the property, not the person. The Division of Taxation says inheritance tax creates a 15-year lien on a decedent's property unless the tax is paid or bonded. A Form 0-1 waiver is the state's written consent to transfer. Without it, the lien is the problem a buyer and title company will raise.
What the lien is
The Division of Taxation's waiver page says the Inheritance Tax, under N.J.S.A. 54:35-5 and 54:35-19, creates a 15-year lien on all the decedent's property unless the tax is paid or bonded. The Division's non-resident instructions repeat it, saying the tax is a lien on all New Jersey real property for fifteen years unless paid sooner or secured by an acceptable bond. A lien is a legal claim attached to the property itself.
How the waiver releases it
The Division describes Form 0-1 as the written consent of the Director of the Division to transfer or release certain property in the name of a decedent. In practice, that is the document that tells a buyer the state has no remaining claim on that particular property. That is why the executor guide says real estate transfers always require Form 0-1. A buyer's title company is likely to ask for it, because the buyer does not want to inherit a claim from the seller's side.
Paying or bonding the tax
The sources describe two ways the lien can be dealt with before 15 years pass: the tax is paid, or it is secured by an acceptable bond. The details of how to post a bond are not in the pages I reviewed, so ask an estate attorney. If tax is owed on the house and the estate sells it, the closing is normally the moment the estate has cash to pay. A closing attorney can arrange for the payment to be made from proceeds.
When there is no lien issue
Not every house in an estate has this problem. The Division says no waiver is required for real property held as tenants by the entirety by spouses or civil union partners, and the non-resident instructions say that no tax waiver is issued in that situation. Estates that pass entirely to exempt Class A beneficiaries still need the real estate waiver, but they request it with Form L-9 rather than a full return, according to the executor guide.
If the estate does not want to wait it out
Estates with a lien question sometimes choose a buyer who will close once the waiver arrives. Kaizen Home Buyers makes cash offers on New Jersey houses as-is, with no repairs and no agent commission. We can give an offer within 24 hours and close in 14 to 30 days or on the date the estate picks. Call 267-329-0084. Your attorney should confirm the waiver is in hand before closing, and a standard listing with an agent remains an alternative.