PROBATE

Will contests and probate litigation happen when:

1. The leading source of probate litigation is questionable pre-death expenditures by powers of attorney/agents appointed by the decedent. While the law requires a power of attorney to serve in a fiduciary capacity for the sole benefit of the principal, some agents use their authority as a license to steal. The power of attorney may not be aware that upon the death of the principal, the law can require an accounting of how the funds were spent during the principal’s lifetime, which will be scrutinized by the probate court, surrogate and/or the will beneficiaries.

2. Joint POD and TOD accounts — These are another frequent source of litigation due to the following scenario. The elder appoints someone to handle his or her banking and financial affairs for convenience purposes only. The financial institution recommends that agent be added to the account, as a joint owner or upon death, by operation of law, the joint, POD or TOD holder becomes the sole owner of the remaining funds on deposit. Often, the agent then decides that the elder intended to gift him or her the funds upon death, ignoring that the arrangement was for convenience purposes, without any donative intent by the elder. This results from the misguided advice given by the financial institution to add that party’s name to the account. For legal advice, see a lawyer, not a banker or broker.

   To avoid this complication, an experienced certified elder law attorney (CELA) drafts a power of attorney document stating that the agent may be added to the account for convenience purposes only and without intent to gift, thus avoiding expensive probate litigation.

3. Exercise of undue influence over the person creating the will, especially by caregivers or those with confidential relationships, including, unfortunately, the person’s own children.
4. The “I took care of them so I’m entitled” syndrome. Funds may have been taken during the decedent’s lifetime or by a change in a prior testamentary plan, like a “new” will. To avoid this syndrome, draft a written caregiver agreement for services before they are rendered and even if the caregiver is family.
5. Improvident gifting — This is the scenario where substantial predeath “gifts” are given with the usual excuse being “mom or dad wanted me to have it.” That answer will not pass judicial muster.

PROBATE ADMINISTRATION IF EVERYTHING IS NOT CONTESTED

If you’re an executor, administrator or beneficiary of an estate in probate, we’ll answer your questions, help you resolve any issues that you may be confronting, coordinate the transfer of assets to beneficiaries, pay bills and file income, estate, death and inheritance tax returns. If you’re a family member whose loved one died without a will, we’ll help you understand the process required to finalize their estate in a timely and professional manner.

Probate and Estate Administration Steps and Process in New Jersey

The term “probate” of an estate is a legal term that is often used in conjunction with a Last Will or a trust within a Last Will, for example, “probating a will” and “probating an estate”.  But what does probate mean when it’s referred to under NJ law?  When an individual passes away, an executor is typically appointed under his or her Last Will to probate and administer their estate.  In the absence of a will, an administrator is appointed by a court under New Jersey Probate Law.  Both positions involve being the representative of the estate charged with legal responsibility to ensure that all required steps are taken to comply with New Jersey probate laws regarding creditors, taxation, and the distribution of estate assets to beneficiaries.

In New Jersey, the executor must file the original will for probate with the Surrogate of the county in which the decedent resided at the time of his or her death. Only the original Will can be admitted to probate without involving a judge of the Superior Court of New Jersey. If the executor cannot locate the original Will, then he or she will need to file an order to show cause in the Superior Court to admit a copy of the Will to probate. The county will not admit a copy of the Will to probate with the Surrogates consent. After this step is taken, the executor generally opens an estate bank account from which any debts and claims against the estate are to be paid. Title to assets is transferred into the name of the estate or the beneficiaries of the estate, as appropriate. In order to undertake these steps, a tax identification number (commonly called a Federal Tax ID number) is acquired because an individual’s social security number becomes invalid upon death. In addition, the executor for the probate estate must file a variety of forms with the Internal Revenue Service and the County Surrogate’s Office to ensure that he or she is not held personally liable for the debts of the estate.

How Probate and the Probate Process Works in New Jersey

New Jersey Estate Administration and Probate Laws

Under NJ law, an estate consists of all property owned by a deceased person prior to the distribution of his/her property in accordance with the terms of a will or trust, or, when there is no will or trust, in accordance with the law of intestate succession in New Jersey or the state where the individual lived. The process of estate administration and probate can be complicated. Several things must happen.

• The will is proven to be valid or invalid.
• The property covered by the will or trust is verified and valued.
• The way in which the property of the decedent is to be distributed to beneficiaries is established.
• Creditors of the decedent are identified and given the opportunity to file claims against the estate.
• Fees and taxes for administration of the estate are established and paid.
• The assets of the estate are distributed to heirs and beneficiaries.

Probate is a judicially supervised process for gathering a decedent’s assets, paying taxes and claims, and distributing assets to the beneficiaries. Probate is only necessary when a person dies with assets titled and owned in his or her name individually. Assets in a living trust, revocable trust, irrevocable trust, property that is jointly owned or with a beneficiary designation does not go through the probate process in this state. 

What is a Self-Proving Will, and What is its Place in Estate Administration?

A Self-Proving Will can be very easily probated as part of estate administration before a New Jersey Surrogate.  A Self-Proving Will contains an affidavit with several important provisions relating to the age, mental capacity and understanding of its maker. Witnesses to the will must acknowledge the signing of the Will before a notary public or some other person authorized to take an acknowledgment.

If the self-proving Will is notarized as described above, our office can initiate the process of presenting the original Will and a copy of the death certificate, with raised seal, to the Surrogate‘s Office in the county where the deceased resided at the time of death.  This begins the process of estate administration and probate.

Wills that are not self-proving can also be probated.  A copy of the death certificate with raised seal must be presented to the Surrogate’s Office.   The Executor must locate one of the witnesses who signed the Will and request that this person appear at the Surrogate’s Office to “prove” the Will.

If you cannot locate at least one(1) witness, then it will be necessary to commence the “diligent inquiry” process to locate the witness.  Should the witness reside out of the country or outside of the state, our office can coordinate probate with the Surrogate’s Office in order to make alternate arrangements to prove the Will.

Search to Locate the Will to Begin the New Jersey Estate Administration Process

So, where do you begin to find a will? The best place to start is where the deceased kept his/her important papers.  If it is not there, look in drawers, cabinets or “secret” places.  If the deceased had a safe deposit box, contact the bank where the box is kept and make an appointment to open the box in the presence of a bank officer.  If there is a Will in the box, it will be released to the named Executor.  But beware, check with your bank on how to retrieve items in a safe deposit box. Chances are they will make it tough so ask the manager what you can do.

Death and Inheritance Taxes

There are three primary taxes which can potentially be levied upon an individual’s death: (1) the federal estate tax, (2) the New Jersey Inheritance Tax and/or NJ Estate Death Tax and (3) federal and NJ income taxes. The executor needs to determine whether the first two taxes are due and must be paid. Income taxes must always be addressed by an executor on income received by the decedent before death or generated on estate assets between the decedent’s date of death and the date of distribution to beneficiaries.

In 2018, NJ abolished the estate death tax.  Will it last?  Who knows with this present Governor?  Hopefully, he’ll be voted out of office next time.  The NJ inheritance tax, however, still exists.  

Informal or Formal Accounting of the Estate

In order to properly conclude an estate, an accounting must be made by the executor to all eligible beneficiaries. Once approved and in exchange for a release and refunding bond is signed by each beneficiary, estate property can be distributed. The release and refunding bond is always filed with the County Surrogate’s Office and all beneficiaries acknowledge the receipt of their share of the estate. A fully executed release and refunding bond discharges the executor from further obligation to the estate, and each beneficiary accepts pro rata responsibility for any debts filed against the estate subsequent to the beneficiary receiving his/her distribution