As an estate attorney, I’m asked a lot of questions about estate administration and probate. As a result, I decided to create a list of the most frequently asked questions (with answers) about probate and estate administration when advising my clients. I hope this is helpful to you. Of course, if you have a different question or need to meet with me, you can contact me toll-free at (855) 376-5291 or email me at fniemann@hnlawfirm.com. I’m always glad to discuss your questions in person, video conference or by phone.
Q: What is probate?
A: Probate is the process whereby a Will is proven to be valid by a Surrogate, who has the authority to determine the authenticity of such a document. It also involves appointing an individual for an estate when someone dies without a Will.
Probate is done when someone dies with assets in their name alone. The individual named in the Will as the Executor/rix (hereinafter referred to as the personal representative) would come to the office of the Surrogate with the original Will and a certified copy of the death certificate.
Application is made to the Surrogate of the County where the decedent resided at the time of death. If the Will is self-proving (language added to the Will that allows the document to prove itself), no further proof or testimony will be necessary to probate the Will.
If the Will is not self-proving, proof of one of the witnesses is necessary to complete the probate.
Certain qualification forms would need to be signed by the personal representative. No probate can be completed until the day following the tenth day after death. Fees will be charged as set forth by the New Jersey legislature. It is a relatively inexpensive process.
If someone dies without a Will, an individual can make an application to be appointed as Administrator/rix (also hereinafter referred to as the personal representative) to represent the estate.
After signing qualification papers, the Administrator/rix needs to post a bond that represents the full value of the estate and file renunciations from any individual that has a prior or equal right to be appointed. This bond is only required if there is no Last Will.
The Surrogate, as part of the process, will issue letters and certificates evidencing the appointment of the individual to the estate which will allow them to access and transfer assets such as bank accounts, stocks, bonds, etc.
Once the probate is complete, the personal representative of the estate has sixty days in which to notify the heirs at law, next of kin and beneficiaries that an application was made for probate.
What is the probate process if a person dies without a Will?
When a person dies without a Will, there are two types of legal procedures that may occur.
A) Affidavit
If there is a surviving spouse or domestic partner and the property (real and personal) owned by the decedent alone does not exceed $50,000.00, an Affidavit of Surviving Spouse or Affidavit of Domestic Partner may be issued to dispose of such property without the necessity of formal Administration.
If there is no surviving spouse or domestic partner, but there are heirs and there is property owned by the decedent alone, which does not exceed $20,000.00, an Affidavit of Heir may be issued to one of those individuals closest in kinship to the decedent without the necessity of formal Administration.
Consent from certain individuals may need to be filed. If all procedures are performed properly, the Surrogate will issue either an Affidavit of Surviving Spouse, an Affidavit of Domestic Partner, or an Affidavit of Heir, which will enable the individual to act with the same power as the decedent over the property reported on the Affidavit. The documents cannot be issued until the sixth day after death.
B) Administration
If there is a surviving spouse or domestic partner and the property owned by the decedent alone exceeds $50,000, the spouse or domestic partner may be appointed Administrator/rix of the estate. If there are others who are entitled to inherit a bond will be posted by the surviving spouse or domestic partner for the full value of the estate.
If there is no surviving spouse or domestic partner and the property owned by the decedent alone exceeds $20,000.00, then an heir who is next in line may be appointed Administrator/rix of the estate. A bond will be required to be posted that represents the full value of the state. Renunciations may need to be filed.
The Surrogate’s Court requires a certified copy of the Death Certificate and qualification papers signed by the applicant(s) for an Administration. Once completed, Letters of Administration and certificates will be issued. These documents are not issued until the sixth day after death after all requirements are met.
C) Heirs – Who May Be Appointed
To properly understand who can be appointed under an Affidavit of Heir or an Administration, the following relationships are eligible for appointment.
Children of the decedent are equally entitled to act. Normally, one child can act in such a capacity. Therefore, if a decedent has four children. three would renounce in favor of the fourth. In the alternative, they may be appointed as Co-Administrators.
If no child survives the decedent, but there are grandchildren, one may be appointed where the others renounce, or they may be appointed Co-Administrators.
If no child or grandchild survives, but the decedent is survived by parents, one parent may renounce in favor of the other, or they may be appointed Co-Administrators.
If no child, grandchild, or parent survives, but the decedent is survived by brothers and sisters (siblings), one may be appointed where the others renounce, or they may be appointed Co-Administrators.
If no child, grandchild, parent, or sibling survives, but the decedent is survived by nieces or nephews, one may be appointed where the others renounce, or they may be appointed Co-Administrators.
If none of the above survive, the decedent next in line are the decedent’s grandparents, followed by aunts and uncles, then cousins, etc., (the grandparents’ descendants).
Finally, if none of the above relatives survive, but the decedent is survived by stepchildren (not adopted), one may be appointed where the others renounce, or they may be appointed Co-Administrators.
Remember that in both Affidavit and Administration applications to the Surrogate’s Court, renunciation or consent forms will be required to be filed from the appropriate individuals.
Q: What is the legal definition of “next of kin” under NJ estate administration law?
A: In the state of New Jersey, the legal definition of “next of kin” holds significant importance when determining heirship, inheritance, and decision-making rights.
Next of kin is commonly understood as a person’s closest blood relative, but New Jersey statute N.J.S.A. 3B:1-1 further elaborates on this definition. Next of kin refers to individuals who are entitled to inherit a decedent’s estate when there is no valid will in place. In such cases, the state’s intestate succession laws guide the distribution of assets among the closest relatives.
In New Jersey, the order of priority for next of kin starts with the spouse and children of the decedent. If none of these individuals exist, the deceased’s parents, siblings, or their descendants may be considered. However, the statute explicitly excludes cousins from the definition of next of kin.
Q: How is an estate distributed without a Will?
A: New Jersey law provides how your estate will be distributed if you do die without a Will and all the personal assets are in the decedent’s name alone.
Q: Why is having a Last Will important?
A: A Will is defined as an instrument, that comes into effect upon death, by which a person makes a disposition of property both real (land and buildings) and personal (bank accounts, stocks, and personal items.) Without a Will, an individual’s assets will be distributed according to New Jersey law.
A properly drawn Will should name an Executor/rix and alternate in case the individual first named is unable to serve. If applicable, it should name a trustee if a Trust is created in a Will and a guardian if there are minor children who will need to have someone appointed to handle their affairs.
A Will should state whether or not any of these fiduciaries are to be bonded. It should state specific bequests and determine how the rest or residuary of the Estate will be distributed.
Anyone over the age of eighteen can have a Will. It should be signed and witnessed by two individuals who are at least eighteen years of age and if properly worded, will become self-proving with the addition of signatures by the same witnesses and the signature of a notary public.
Whether your estate is large or small, it is beneficial to have a properly drawn Will. A minor mistake may invalidate your good intentions. It is suggested you seek the services of an attorney as the risk of problems is too great. Not having a Will properly drafted or executed can cause delays, great expense, and may force the Will to be probated in the Superior Court.
Remember that after a Will is executed, any changes to the document should be made through a codicil (a separate document that changes certain parts of a Will) or by a new Will. If markings, cross-outs, or handwritten changes exist on a Will, the Surrogate will be unable to act, forcing probate in the Superior Court.
The person named in a Will as the personal representative will have the responsibility to
Q: What is joint ownership and does a joint property need to be probated?
A: Property, both real and personal, may be transferred through joint ownership. Real estate owned by husband or wife or domestic partners, as tenants by the entirety, becomes the sole survivor.
If two or more persons other than husband and wife or domestic partners own real estate together, each owns an individual share as tenants in common (meaning a percentage of the estate), unless the deed states that they own as joint tenants with rights of survivorship.
An interest in real estate owned jointly will become the property of the survivor upon death.
Q: How is life insurance handled?
A: A life insurance policy is a contract between the policyholder and the company. The proceeds are paid according to the terms of each contract. It is not considered an asset of the estate unless paid to the estate. It is important to investigate primary and alternate beneficiaries named on a beneficiary designation form.
Q: How are/is Social Security, Pension and Veteran affairs handled?
A: The Social Security Act provides for survivor’s benefits to the family and other benefits to eligible persons. Benefits may include monthly payments and a lump sum death payment.
Upon the death of a person who may be entitled to benefits, a member of the family or interested party should contact the local Social Security office for further information.
If applicable, a widow, minor children or family members may be eligible for pension benefits. Contact the appropriate pension company official for further information.
If the decedent was a Veteran, the Veteran’s Administration should be contacted to inquire about burial or death benefit information.
Q:What is a Letter of Last Instructions?
A: Few people expect to die and relatively few leave their affairs in perfect order. Those who administer an estate often find themselves without the necessary information.
To ease their job, it is advisable to leave your personal representative a letter of last instructions. This document, outside of your Will. will act as an information source as well as an indication of how your affairs will be handled.
The document may contain the following information:
1) names and addresses of those individuals you would want to be contacted upon your death;
2) a list of family members and their relationship;
3) a statement as to where your Will can be located;
4) instructions as to funeral and burial arrangements;
5) where your important papers may be located such as marriage/divorce, automobile title, discharge from the military, etc.;
6) cemetery plot information;
7) location of safe deposit box;
8) list and location of insurance policies;
9) list and location of all bank accounts, checking and savings;
10) list of information on pensions, trusts, etc.;
11) location of all stocks, bonds, securities, etc.;
12) statement of all real property with location of mortgages, deeds, etc.;
13) location of all income tax returns for the previous five years;
14) current bills, debts, and canceled checks for five years.
Q: How do I transfer assets during estate administration?
A: To make a transfer of an asset at death, the personal representative will usually need to perform the following functions:
To determine if a waiver is necessary, use the following formula:
1) Personal Property
2) Real Property
Real property, if in the decedent’s name alone, will pass according to the terms of the Will, or if no Will, then by the laws of intestacy.
If the property is owned jointly with rights of survivorship, it will pass to the surviving owner.
If owned as tenants by the entirety as husband and wife or domestic partners, the property will pass automatically by operation of law to the surviving spouse or domestic partner.
3) Motor Vehicles
Title held jointly in the name of the decedent and their spouse or domestic partner becomes the property of the survivor upon death. No Surrogate’s certificate or Affidavit is required. The title can be changed by the spouse or domestic partner upon appearing at a Motor Vehicle office and executing a proper Affidavit.
If the title is in the decedent’s name alone or jointly with another person other than the surviving spouse or domestic partner, the personal representative or co-owner must show a Surrogate’s certificate or Affidavit together with the original title, registration, and insurance identification card.
4) Stocks, Bonds, and other Securities
Examination of the stock certificate should be done first to determine who is the registered or transfer agent. It will then be necessary to contact that individual to ascertain the company requirements for the transfer of the stock.
Normal requirements include a transfer agent’s transmittal form, an affidavit of domicile, a certified copy of the death certificate, the Surrogate’s certificate, the original stock certificates, and if a New Jersey corporation, a tax waiver or affidavit or waiver.
Stock that is owned by the decedent and another individual may have the same requirements as indicated above in order to transfer the stock to the surviving owner.
5) Clearing Title and Transferring Property
Unpaid inheritance taxes are a lien on New Jersey real estate and shares of stock of corporations and financial institutions organized under the laws of New Jersey.
The New Jersey Inheritance Tax Bureau sells waivers that are required to clear the title to the land and transfer ownership of bank accounts or securities. If there is a tax, a bill is submitted and the waivers are sent when the tax is paid.
To clear the title to the real property, a tax waiver is filed with the County Clerk in the county where the land is located. Land held by husband and wife or domestic partners as tenants by the entirety need not be reported and may be transferred without a waiver.
To transfer stocks, shares, and securities of financial institutions and New Jersey corporations, the personal representative will need waivers to obtain assets. The waivers will be sent from the New Jersey Inheritance Tax Bureau to the individual who files the form.
Q: Who’s responsible for administering a Last Will or Trust?
A: The executor you name in your last will is responsible to carry out the instructions set forth in the will. A trustee of a trust created within the will plays a similar role, but usually for a longer time period- typically until all assets are distributed to the beneficiaries.
A trustee is also usually given some discretionary authority over trust funds and when distributions should be made to beneficiaries.
While the titles of executor or trustee may sound similar, the responsibilities of an executor and trustee are different. Their responsibilities include paying or negotiating with creditors, making distributions of estate funds and trust funds to beneficiaries and creditors, filing the final income tax return(s) and managing any investments. Each is a responsible position.
Q: Does a court play any role or have any involvement with a Trust or Will in a typical probate matter?
A: Generally, court involvement is minimal unless there are problems.
A last will is filed with the County Surrogate’s Office of the county where the decedent resided at the time of death in order to be probated. Probate is generally not costly, complicated, or time-consuming. If the will is contested, however, probate can sometimes take as long as a couple of years. If there is a will contest or contentious family relatives, delays can take place. The use of a will is more common in states like New Jersey with simple probate laws. There are no court hearings with an uncontested will. Usually the presence of only one person, often the executor or a family member is required to probate a will.
With a trust, your assets are simply transferred to the designated trustee (or trustees) upon your death. A trust avoids probate if not contested. One common reason for setting up a trust rather than a will is to avoid court proceedings and probate.
You can also set up a “trust within a trust” or a trust within a will, usually for a single beneficiary.
Q: What about death and inheritance taxes that may influence the estate?
A: The New Jersey Inheritance Tax is a tax on the right to receive an inheritance or property at the time of someone’s death and is determined by the relationship of the beneficiary to the decedent.
There is currently no tax imposed on a transfer to a spouse domestic partner, child, adopted child, stepchildren, grandchildren, parent, or grandparent.
On a transfer to a brother or sister of the decedent, a wife or widow of a son of the decedent, or husband or widower of a daughter of the decedent the first $25,000.00 is exempt. Any amount over that up to $1,075,000.00 is currently taxed at 11%.
Any other transferee, distributes, or beneficiaries (other than those entirely exempt such as charities or educational institutions) will be currently taxed at 15% up to $700,000.00 and 16% on anything over that amount. You are exempt from paying tax if you receive any amount up to $499.00. You will pay tax on the entire amount if you receive $500.00 at 15%.
Depending on the size of the estate, Federal and/or State estate tax may apply. It is suggested you seek the guidance of an attorney, accountant, or estate planner to address those concerns.
Q: How do I handle a Trust under a Last Will?
A: A Trust created under a Will can be established for minor children, adults, or any other designated beneficiary. It can be done for any number of reasons including tax savings, the ability of a beneficiary to handle finances, or the distribution of one’s assets.
A: The Trust created under a paragraph in the Will appoints a Trustee. The Trustee administers and invests the funds for the Trust and pays income and/or principal from the Trust as set forth under the terms of the Trust in the Will. For more information about Trusts, go to my dedicated web page devoted to Trusts (click here) or Trusts Found Within a Last Will (click here).
Q: What about guardianships for minors?
A: A guardian for a minor can be named in a Will or the Surrogate can appoint a guardian if a minor receives an inheritance or proceeds from a lawsuit.
Normally, the money is deposited in the County Surrogate’s Court Intermingled Minor Account and held until the minor reaches the age of eighteen.
As an alternative, the guardian can seek to post a bond and invest the monies themselves on behalf of the minor. If the minor owns any real property and the guardian wishes to sell it, they must first obtain court permission.
Q: Does probate address an existing Power(s) of Attorney?
A: A Power of Attorney is a written document in which another adult person is authorized to act on your behalf regarding real property, bank accounts, and other financial and legal matters.
It is generally used when someone is unable for some physical or mental reason to carry out his or her affairs. With this instrument, a spouse, friend, or family member, called an Agent, can act on behalf of you, the principal.
There are generally two kinds of Power of Attorney: limited and general. The limited Power of Attorney gives a person authority to act for a specific purpose. An example is the sale of a house when the owner cannot be present. The agent with the Power of Attorney can sign the documents in the principal’s absence.
With a general Power of Attorney, the agent has the authority to act on anything and everything for the principal. Most general Powers of Attorney will have a provision that allows the agent to act even in the event of the disability of the principal. A Power of Attorney automatically ends at the death of the principal. For more information about Powers of Attorney, go to my dedicated web page on Powers of Attorney (click here).
The person that wishes to be appointed to represent the estate will bring a certified copy of the death certificate and the original Will. While the Surrogate can begin the paperwork any time after death, probate cannot be completed until the eleventh day after death.
Q: How do I begin the probate procedure?
A: The person that wishes to be appointed to represent the estate will bring a certified copy of the death certificate and the original Will. While the surrogate can begin the paperwork any time after death, probate cannot be completed until the eleventh day after death.
Q: Why do I need to post a bond if someone dies without a will?
A: New Jersey has determined that a bond must be posted that represents the full value of the real and personal property in the estate. The bond acts as an insurance policy on the estate to ensure that the creditors are paid and the assets are distributed properly.
The Surrogate does not have the discretion or right to waive the bond.
Q: How does the surviving spouse or domestic partner access joint bank accounts or certificates of deposit?
A: Certain bank accounts or certificates of deposit may be owned with rights of survivorship which means that upon the death of one party to the account, the surviving spouse or domestic partner becomes the sole owner. The surviving spouse or domestic partner to the account can fill out an affidavit of waiver or L-8 form at the bank to access the funds.
Q: How many surrogate certificates will I need?
A: A list of the Estate assets should be prepared to show the number of transfers that will need to take place. That number should reflect the required number of certificates.
Additional certificates can always be requested from the surrogate’s office.
Q: What happens to my debts I leave behind during probate?
A: Whether you have a will or a trust (or neither), the debt(s) you have at the time of your death must be paid or settled. If your assets aren’t liquid, creditors can force the sale of your property to get paid. Of course, a trustee or an executor can and often do negotiate with creditors to repay debts over time, if necessary.
Below is an actual client question:
Q: I am the Executrix of my mother’s estate. She named me Executrix in her Last Will. I inherited the family home, as a joint tenant with my siblings together with all the house contents. Combined, the house and contents have a total value of approximately $430,000. My brother and sister equally inherited the remainder of the Estate – all cash and investments totaling $500,000, before taxes. In New Jersey, the law requires me to advertise for any creditors for a period of six months, and usually any payments to the beneficiaries will not be paid until the final taxes, expenses such as legal and accounting fees, are established. I am confident my mother has no outstanding debts, so I went ahead and released a portion of my brother’s inheritance to him because he needed the money. Now my problem is my brother is demanding his full share even before the estate is closed, final taxes paid and creditors’ claims wiped out. Am I being unreasonable as Executrix if I refuse to release the full share to my brother as beneficiary?
A: This is a great question! It’s a judgment call. I probably would not disburse all of his funds just yet but wait until a reasonable period of time elapses. If you are confident that you have enough funds to cover the remaining estate expenses, most beneficiaries will welcome a distribution before the balance of the estate is paid out. But beware! You should keep in mind that, as Executrix, you are personally responsible to cover all estate expenses. If you distribute all the assets to the beneficiaries and it turns out that you don’t have enough money to cover the expenses, you will be personally responsible for the deficiency unless the beneficiaries return enough of their inheritance to cover the remaining costs. If as Executrix you’re not sure how much debt may be remaining and the likelihood of getting reimbursed from your siblings is real to you, then it is perfectly legal to withhold a final distribution until all expenses have been determined and/or paid. If you make an early or partial distribution, be sure to withhold enough funds to cover all estimated expenses. This is the advice I give to all Executors.
Q: My father-in-law passed away this February in Florida. He had no life insurance and $7,500 in his bank account. His only asset is his house which has a reverse mortgage on it. After the sale, the net proceeds of his estate will be less than $25,000. To this point, the monthly bills, medical expenses, funeral expenses, lawyers’ fees and other expenses may be greater than $25,000, leaving nothing to pay unanticipated expenses and beneficiaries. Are the beneficiaries personally responsible for the estate debts; is the Executor?
A: No, you’re not financially responsible for estate debt as executor. It appears the estate is insolvent. Beneficiaries are never liable for estate expenses unless they have received a distribution from the probate and/or non-probate estate. If there are not enough funds to pay creditors, New Jersey’s probate code dictates a priority for paying creditors. Typically, expenses of administration, such as filing fees, executor commissions and attorney fees are paid first, then funeral expenses followed by federal and state taxes, followed by the expenses of the decedent’s last illness, and then general unsecured debts. You should contact an experienced probate attorney for guidance.
Q: My brother is named the Trustee of my father’s Living Trust in New Jersey where he recently died. Another brother is the Executor of his Last Will (that can be a big problem, at times!). The three of us are all beneficiaries of the Estate and the Trust. As a beneficiary, I thought it was a good idea to research some information about the real estate he owned to maximize the most out of its sale. Now here’s my question: Does the Trustee have any legal obligation to consider my research? Does he have to respect my opinion? My concern is that he may hire some realtor who doesn’t know the market, thereby squandering what our father left to us. Do I have any rights to vote on who he may hire to sell the property to make sure we all get the most we can get out of it? Or, does he simply have all the say over how it is handled? Is there a final word on how the estate is dispersed? Do I have any rights to have my opinion considered? Like for instance, can I contest who she decides to have as a realtor?
A: This is a well thought out question. It mixes and matches the role of Trustee and Executor. Both are distinct. As Executor or as Trustee (I think you mean Trustee of your father’s Trust) your brother is legally responsible for handling your father’s Trust. While he can consider your opinion, he is responsible for making all the final decisions. One undisclosed issue is the length of the trust for you and your siblings. If your father’s Trust terminated upon his death, you and your other siblings should, as a general rule, immediately list the house for sale. If your father’s Trust continues for a period of time, let’s say until one of you attains a certain age (say 40), then your Trustee brother must make the best decision for managing the Trust until it terminates with or without your input. As I indicated above, he has the say when and even if the property is sold depending on how much of your father’s Trust is a continuing Trust. However, he will be responsible to you and your siblings as beneficiaries for the decisions he makes. Any beneficiary can object to a Trustee’s decision. In order to have that decision legally reversed, a beneficiary must file an action with the Chancery Court, Probate Division, and the court must evaluate your position.
Q: My daughter’s grandmother has died. Her Will was executed in 2009. She left cash to her nephew and niece and her house with all its contents to my daughter. My nephew is the Executor. The value of the house is estimated at $300K. The furniture is worth perhaps another $5,000+. It is believed that there was also some jewelry of considerable value (perhaps $20K) in the house. The grandfather was a jeweler and the grandmother often spoke of the beautiful jewelry he had made for her. A few years ago, the grandmother was defrauded by investment “crooks” out of most of her cash (which was estimated to have been about $150K). A small repayment has since been made by the thieves, about $25K. Under the circumstances – i.e., the house and contents are worth a lot more than the lost cash assets. The Executor has asked my daughter to consider sharing the proceeds of the sale of the house with the nephew (Executor) and niece (his sister). Thinking that it may well have been the intention of the grandmother to share her Estate equally between her granddaughter and her nephew/niece, my daughter was inclined to honor the proposal. It has recently come to light that the grandmother’s jewelry has already been removed from the house. The Executor has informed my daughter that his sister took the jewelry and gave it to her daughters. Needless to say, my daughter is now less inclined to “share.” The question is – what is the legal liability of the Executor in allowing the inappropriate distribution of the jewelry? Is there a criminal penalty, or merely an obligation to “make the Estate whole?”
A: The Executor of any Estate has a legal obligation to distribute the assets of the Estate to the named beneficiaries who are legally entitled to receive those assets. Executors are legally required to protect Estate assets during the period of administration until they are distributed to the beneficiary(ies) who are entitled to receive them. It sounds like the Executor in this case allowed assets that belong to your daughter to be taken by someone else. Then again, jewelry is not “house contents”, it’s personalty. Does the Will address personalty? The Executor has an obligation to recover the jewelry unless your daughter chooses not to pursue her rights to this property. The remedy for any wrongdoing or mismanagement by the Executor, if not worked out between the parties, is through the probate court in the county of your residence.
Q: My husband recently died. His Will named his sister as Trustee over the children’s Estate. I am named as the personal representative (Executrix) of his estate but most everything we owned was jointly owned by us in our names. Can I cause a court to remove my sister-in-law as Trustee over my childrens’ Trust since my husband and I own everything together and my three children are minors in my custody?
A: Probably not, in fact no, unless… Here’s my reason. First look at the terms of the Trust. If the Trust language gives the beneficiaries the right to remove the Trustee, you might be able to exercise that right on their behalf if they are minors since they cannot make that decision themselves until they are adults. If the Trust does not permit removal of the Trustee, you probably must petition the probate court for removal of the Trustee and the appointment of yourself as the successor Trustee. But don’t waste your money foolishly. You need a strong reason to remove a trustee, i.e., senility, substance abuse, indifference, etc. Speak to an experienced New Jersey probate attorney.
Q: My father passed away recently and did not have a Will. My siblings and I have not had any contact or relationship with him for more than 45 years. We were recently sent a letter from an attorney regarding his assets. This letter was generated because of the concerns of my father’s two surviving sisters. They are looking for one of us to be appointed the administrator of his Estate. The problem is we DO NOT want to have anything to do with him or his Estate. Can one of us be forced to take care of the Estate?
A: This is a good question and I see this a lot in my practice. Here’s the low down. No! No one can be forced to serve as Executor or Trustee regardless of whether he or she is named (nominated) in the Will or Trust. You can just refuse! You never volunteered for the job. However, someone needs to serve as the Executor of your father’s Estate. If a family member is not willing, the probate court will appoint an individual or bank to serve, if there is money. I’d read the Will to see if it’s in your economic interest to serve as Executor. You might be pleasantly surprised.
Q: My father has just recently passed and had no Will. My brother and I have been taking care of most of his debts and monthly payments through his checking account, (of which I am a legal signer). There is very little money left in the account after paying most of his medical bills, but there is an IRA that has about $10k in it. The IRA custodian is asking for a certified copy of the death certificate, which we have. In addition, they are requesting a certified copy of our appointment as Trustee/Executor of his Estate, which we do not have since there was no Will or Trust. They are also asking for an IRA distribution form from the Executor, which we can fill out if an Executor is appointed. The main question is how can my brother or I become the Trustee/Executor after the fact? Do we have to hire an attorney? There is only a very small amount of money left and it seems that after hiring an attorney, there wouldn’t be much left for the rest of the expenses. How should we handle this?
A: What a potential waste of money if your dad failed to name beneficiaries to the IRA. Typically, an IRA designates a beneficiary. The beneficiary, technically, is responsible for recovery of the IRA proceeds. If there was no designated beneficiary on the account, the account proceeds are payable to the Estate of the account owner and the Executor (personal representative) makes the claim. So, that’s your answer. New Jersey has an option for settling a small Estate. The process involves the appointment of an Executor (personal representative) to handle the decedent’s affairs. An attorney is usually not necessary in this type of proceeding. You should contact the Surrogate of the county in which your father died for more information about this procedure.
Q: My father passed away in January of this year. His sister, my aunt, is the Executrix and the Trustee of his estate, and I am the beneficiary. I have asked several times for an accounting of the estate, but each time she has refused to advise me. I am 21 years old and I’m trying to go back to college. My father’s Will specifically recites that his Trustee (my aunt) is authorized to distribute principal and interest in such amounts as the Trustee shall determine reasonable to provide for college or professional training for my son (the beneficiary).” She and the accountant want me to be responsible for my living expenses during school. They want to sell my dad’s house (where I live) even if I go back to school. Do I have legal recourse? Can I object? What are her legal obligations and how do I protect myself?
A: I’ve run into this issue several times. Both outcomes were different for all parties involved. As trustee, your sister must follow the terms of your father’s trust. In doing so, she is empowered to sell the house if, in her judgment, it is the best thing to do to carry out the purpose of the trust. As a beneficiary, you have the right to an accounting of the trust’s activities at least once a year. If you have not done so already, I suggest you make your request for accounting in writing. If, after a reasonable amount of time has lapsed, you do not get a response, hire a lawyer who will petition the court to order her compliance.
Q: Can you explain to me in simple English the differences between an Executor vs. a Testamentary Trustee?
A: Sure, it’s quite simple. An Executor is responsible for finalizing a decedent’s probate Estate. A probate estate is an estate where a person died owning property titled in the decedent’s individual name. The Executor is responsible for marshalling and collecting possession of property, paying the final expenses and taxes owed by the person before and after death, and distributing estate assets/real estate in accordance with the decedent’s Will, or if he or she did not leave a Will, in accordance with New Jersey law. The job of an Executor ends when the property is distributed to the beneficiaries.
A Trustee of a Testamentary Trust, on the other hand, is responsible for property placed in a trust upon receipt from the executor under a Will. Trust details are found in the Last Will of the decedent which created the Trust. A Trust is a legal entity created in accordance with New Jersey law but is not subject to New Jersey probate. The Trustee’s job is to manage the Trust property for the benefit of the beneficiaries named in the Trust. This responsibility often extends for many years and can extend to several generations, depending on the terms of the Trust. The Trustee’s duties end when the Trust, by its terms, terminates and the Trustee distributes the Trust property to the beneficiaries named in the Trust.
Q: If I am nominated under a Will or Trust to be the Executor or Trustee, should I agree to serve?
A: That’s a tough answer. Generally, I would advise yes, but not always. It often depends on your willingness to assume legal responsibility for the Estate or Trust. You should evaluate whether or not you are mentally and emotionally prepared and capable of serving (i.e., gathering assets, identifying the important information, handling legal and regulatory filings, managing the financial details of the assets and investments, dealing with heirs, etc.) and your willingness to make the time commitment.
Q: If I am named Executor or Trustee, am I legally required to serve?
A: The short answer is “No”. Being named in a Will or Trust does not legally obligate you to serve, if you feel you shouldn’t. You must accept the nomination before you assume any responsibility. You can decline serving by signing a document called a “Renunciation”. But even after you have accepted the position you are not obligated to continue. You can resign, however, once you begin serving you will not be relieved of responsibility until someone else takes over.
Q: Is there somewhere I can go to find out what my responsibilities as an Executor and/or Trustee are?
A: First, begin by reading the Will or Trust thoroughly. A well-written document will contain specific instructions for the Executor or Trustee to follow. An attorney or other Estate/Trust professional can be contacted to explain the duties and responsibilities that apply to the Will and/or Trust and state laws that must be followed. It’s often not that hard.
If you are willing to make the time commitment and seek professional assistance when you need it, you should be able to handle the job. The size of the Estate or Trust, how complex it is and your level of knowledge in handling financial matters will determine to what extent you will need help from an attorney, CPA or other professional.
Q: My Executor refuses to contact me. Do I have legal recourse to force him or her to do their job?
A: Absolutely. New Jersey Estate and Probate laws require an Executor to provide a beneficiary with an accounting and information concerning the administration of the Estate. I suggest you call me to set up an appointment to learn about the specific state statutes that require this and bring it to the attention of the Executor. In extreme situations, you may have to take legal action to compel the Executor to provide you with this information through the Superior Court. It begins with filing an Order to Show Cause against the Executor. This process always works.
Q: Can the Executor/Trustee who resigns select his or her replacement when he/she cannot or will not fulfill their obligation, or will a judge decide who takes over? For example: can the person named as Executor choose a family member as substitute Executor/Trustee or will the judge choose to appoint a bank Trustee who will possibly deplete the funds of a long term (28 years) Trust?
A: The answer begins with a review of the Last Will or Trust. You must first look at the Will to see if an alternate Executor is named. If no alternate is named in the Will, then a court will name a successor. The court will typically name a family member, but sometimes will appoint a bank if the bank is willing to serve and family members can’t agree upon a replacement.
Q: My brother lived with my mother for the last 10 years (rent free) of her life. He helped with the maintenance and remodeling of the house on occasion. My mother recently passed and left the house to all the children equally. I am the Executor/Trustee of the Estate. My brother is attempting to buy the house; however, he is vacillating on his decision and is extremely possessive on any and all items in the house. I stated that I need a decision about whether he is buying the house, or we are going to put it on the market. I also told him that starting next month he will be charged “rent” for the premises. He is livid. I thought that as Executor it was my job to be fair to all beneficiaries, not just one. How does the law in New Jersey view this type of circumstance?
A: An Executor/Trustee has a duty to preserve and make all assets productive for the benefit of all beneficiaries. This means that you have a duty to charge your brother fair market rent because he is benefiting from the property and you and the other beneficiaries are not. One way to handle this is to deduct from his share the fair market rent for the period he occupies the house from the date of your mother’s death. You should, however, inform him of the rent (which should be a reasonable fair market value) and his method of payment. Again, you are responsible to all beneficiaries and cannot allow one to benefit to the detriment of the others.
Q: My grandfather recently died. He supported himself by buying high-risk mortgages. Now we have mortgages that have 20 and 30 years left to pay, five heirs, and we don’t know what to do. Should we resell the mortgages and split the proceeds and be done with it? Can we assign the mortgages to an LLC we may create to take ownership and have the mortgages pay automatically to an account that will disperse the funds to the LLC and from there have the LLC disperse to the beneficiaries? It’s a mess. Please help!
A: This is a common problem, and yes, it is a mess. You basically have three options. First, as you mention, the mortgages can be sold to a third party and the proceeds split among the beneficiaries in accordance with their respective ownership interests. Second, one or more beneficiary(ies) can purchase all or some of the mortgages and disburse the funds to the beneficiaries. Third, the mortgages can be distributed (i.e., ownership put into the names of the beneficiaries or an LLC) and an agent appointed, either one of the owners or a third party, to collect the principal and interest and make distribution to the beneficiaries/owners until the mortgages mature. You should seek professional assistance and work closely with the beneficiaries.
Q: The Estate is worth about 2 million dollars. There is a Will naming about 12 beneficiaries. There is no litigation. Two years have already passed since the decedent died and no settlement has been reached. How long should probate of an estate this size and number of beneficiaries take?
A: New Jersey, like most states, allows for a “reasonable” amount of time to settle an Estate. Once the Federal Estate Tax Return (Form 706) and the N.J. Estate Inheritance Tax Return (IT-R) has been filed (within 8/9 months of date of death) and the time period to absolve the Executor from personal liability has elapsed, the Estate should be ready for distribution. However, there could be extenuating circumstances, such as estate litigation, the sale of a business, etc., absentee heirs overseas or out of state that could delay the distribution and closing. Two years should be more than a reasonable amount of time at this point. You should ask the Executor for a time frame for making final distribution or provide a reason why a distribution cannot be made at this time. If you are not satisfied with the response, consult an experienced probate law attorney.
Q: If cemetery lots were owned by the decedent, and they are sold by the three children, must the monies received be split among all those named in the Will? Our lawyer told us only the house is considered part of the Estate – not the personal belongings inside, etc. There was another person named in the Will besides the three children. Therefore, we need to know this information about the cemetery lots in order to follow the law.
A: What does the Will say? Does it say, “all property”? If the decedent owned the cemetery plots in his or her own name, the plots, or the proceeds if they were sold, must be distributed in accordance with the terms of the decedent’s Will. The only exception would be if the lots were specifically bequested to the children and therefore not part of the probate estate.
Q: As Trustee, I am looking at distributing the household items in my deceased parents’ house to the four beneficiaries. We are inventorying the “items” and seeing which beneficiary wants them before attempting to dispose of them. Disposition will be by donation, and/or sale. One sister does not want anything and feels ALL items should be put up for sale. Three others disagree. In addition, the other sister residing in the house is wanting to purchase the house and feels all items should remain in the house. She is also making it very uncomfortable, allowing us in the house to inventory and clean. She strongly objected to even items being taken to Goodwill. How in the world does one handle this type of situation?
A: First, as Trustee, your job is to follow (specifically) the terms of the Trust. If, for example, the Trust directs that all tangible personal property is to be distributed to all four beneficiaries in equal shares, then each of you should select the items you want and the rest can either be sold or given away. To equalize the distribution, differences should be adjusted by increasing or decreasing what each beneficiary gets from the rest of the Trust assets so that the net value each receives is the same. If there is no provision for tangible personal property, then it becomes part of the residuary of the Trust and is distributed accordingly. If you decide to dispose of these assets in another way, such as giving some of it to charity, you should get the approval of the other beneficiaries, preferably in writing, especially if these items have value. Majority approval might be enough in your jurisdiction. If not, you may want to seek court approval if the items have significant value. As Trustee, you have the legal authority to access Trust property to carry out your Trustee duties.
Q: I am the executrix of my father’s estate, which consists of a home with a large mortgage. Since we have been unable to sell the house, I have had to let the house go into foreclosure. None of the beneficiaries want it or can afford it. Do I have any PERSONAL liability or anything I need to do other than just let it go?
A: You do not have any liability if the estate is insolvent. Just follow the laws of New Jersey governing an insolvent estate.
Q: My question concerns a request by the executor to me as a beneficiary of my late father’s estate, to sign a waiver called a “Release and Refunding Bond” prior to the actual distribution of my share of the estate. This document says I waive any (further) claims against the estate. I have been told that if I do not sign this waiver, I will not get my inheritance as Executor of the estate and funds will be collected from the estate to cover possible future claims and litigation expenses. Is this request legal?
A: Yes, it is and it is a very common practice, though many beneficiaries object to its use, just like you. Executors and trustees often ask the beneficiaries for approval, and release from liability, of their estate administration. This is a reasonable request as an executor should not be held liable “forever” for his or her administration unless he has committed a breach of his duties. However, the executor or trustee cannot make this a condition for distribution. Distribution must be made in a reasonable amount of time and cannot be pre-conditioned on your approval. If you do not release the executor/trustee, he or she must seek approval of his administration through the Chancery Division of New Jersey Superior Court.
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Q: Is a non-resident decedent’s interest in New Jersey real estate subject to the New Jersey Inheritance Tax per N.J.S.A. 54:34-1(b)?
A: Unfortunately, yes, the value is included in the decedent’s estate. The tax is calculated according to its fair market value of the real estate as of the date of death and must be paid within 8 calendar months of death.
Well, I covered a lot of questions and answers, didn’t I? If you need to speak with a knowledgeable and caring attorney about this matter, please call me toll-free at (855) 376-5291 or e-mail me at fniemann@hnlawfirm.com and set up an office consultation at your convenience. It’s my pleasure to serve.
Fredrick P. Niemann, Esq., NJ Probate Attorney