Estate Administration or Probate When a close family member or loved one passes away, it is often too difficult to think about retaining an attorney, paying estate and inheritance taxes, disclaiming assets where appropriate and the variety of other obligations and duties which may arise as a result of you being appointed as an executor, trustee or administrator. Our attorneys understand the emotional impact that clients feel as a result of the loss and the uncertainty that can arise in attempting to administer or probate an estate. As a result, our office discusses the various options available to them regarding our representation. We take into account the emotional impact of our client’s loss, their time constraints and the costs associated with our services. By discussing these factors we tailor our services to provide efficient and effective representation to all of our clients.
What is Estate Administration or Probate?
Estate administration or probate is the method by which an individual’s estate is typically resolved. Where there is a Will, that document is admitted to probate by filing it with the Surrogate in the County where the Decedent was domiciled at the time of their death. Where there is no Will, an individual must apply to the Surrogate to be appointed as the Administrator for the Decedent’s estate. The Administrator can be a relative, creditor of the decedent or someone appointed by the Court. Before being appointed as an Administrator, the individual has to qualify based upon certain priorities given to the nearest living relatives. In addition, an Administrator, normally, has to obtain a bond to ensure that they properly administer the estate.
The existence or nonexistence of a Will dictates how and to whom the Decedent’s probate assets will pass upon conclusion of the estate. Where there is a Will, the probate assets will pass in accordance with its terms, however, where there is no Will, the probate assets will pass pursuant to the intestacy statutes for the State of New Jersey. Probate assets are those assets which pass under the Decedent’s Will and do not pass by way of contract. Assets which pass by way of contract are known as non-probate assets. Non-probate assets can include jointly owned real property, joint bank accounts, life insurance and retirement accounts, to name a few. These assets pass to those designated beneficiaries which are named in the contracts executed between the Decedent and the institution in question. Because these assets do not pass pursuant to the terms of the Will or the intestacy statutes, they are not considered a part of the probate estate. These assets, however, must still be addressed during the administration process as they are part of the Decedent’s estate for tax purposes.
As noted, where an individual passes away without a Will or with a Will which fails in part, intestacy occurs. The intestacy statutes dictate which of the Decedent’s surviving relatives will receive a portion of the Decedent’s estate and are applicable to all individuals who die intestate. Because of the foregoing, the intestacy statutes are generic in nature and do not account for the quality of the relationship between individuals, a beneficiary’s age (unless a minor), the creditors of a beneficiary, or the impact that an inheritance may have on a beneficiary’s receipt of governmental assistance.
Because intestacy results in the strict adherence to the statutes and fails to consider the relationships you have established over your lifetime, as well as numerous other issues, our office strongly recommends that you establish an estate plan which represents your intent and furthers your goals. If you would like to read more on the estate planning services we offer please select the document of interest in the sidebar.
What are my duties as an Administrator or Executor?
Although the duties of an Administrator and an Executor can vary, normally because the Administrator distributes assets in accordance with statutes, while the Executor follows the terms of a Will, there are some general responsibilities to which both must attend. After being appointed as the personal representative of the estate, you will be required, in part, to:
- Provide the required notice to heirs, relatives and other interested parties;
- Ascertain and gather the assets of the estate;
- Pay lawful and legitimate expenses related to the Decedent and/or the Estate;
- Prepare, if necessary, the Decedent’s final income tax return, an estate income tax return, a federal estate tax return, a New Jersey Inheritance tax return and/or a New Jersey Estate tax return;
- Ensure that all necessary taxes are paid;
- Prepare an informal or formal accounting;
- Distribute assets and obtain the necessary release and refunding bonds so that you may be discharged from your services as the estate’s representative.
Although, the foregoing list seems relatively short and simple, numerous issues can complicate the process and a variety of questions can arise. For an executor or an administrator, the more common issues are:
- Do I have the authority to sell or transfer the Decedent’s home or real property?
- How do I manage, distribute, sell or otherwise address a business owned by the Decedent?
- What is the difference between probate and non-probate assets and who is responsible for the taxes associated with those assets?
- What is my responsibility to address ambiguities in the Will?
- Am I entitled to a fee for my services and how do I determine the amount of that fee?
- How do I address property owned by the Decedent and located in another state or country?
- How do I resolve disputes between beneficiaries over personal property owned by a Decedent?
- How do I prepare an informal or formal accounting and how do I address objections, if any, to the accounting?
For many estates, these issues can be resolved quickly and efficiently by retaining the services of experienced legal counsel. To discuss any issues related to estate administration or probate, please contact an attorney at our office at the telephone number listed above or by selecting the “Contact Us” page.
In addition to being appointed as an Administrator or Executor, some individuals are named as Trustees and are cloaked with similar responsibilities to those fiduciaries who represent an estate. A Trustee is typically identified in a document known as Trust which can be created during an individual’s lifetime or upon their passing under a Will. The Trustee’s responsibilities to the beneficiaries named in the Trust can be of a limited duration or extend over many years. Like other personal representatives, a Trustee is entitled to be compensated for his or her services and sometimes must apply to the Surrogate in order to be appointed. Trustees must also prepare tax returns, prepare accountings and perform a variety of other services in their fiduciary capacity.
Because of the foregoing, as well as the often complex terms of a Trust, Trustees are also recommended to retain experienced legal counsel. To discuss any issues related to Trust Administration, please contact an attorney at our Cherry Hill Law Office at the telephone number listed above or by selecting the Contact Us page.