There are a variety of reasons why a Probate matter may need to be brought before a Judge of the Superior Court, including when there are issues of conflict, allegations of improper handling of the estate, etc. As a result, an Order to Show Cause and Complaint must be filed in the Surrogate's Office. The following is some helpful information to guide you in this area but is not intended to be inclusive, as there are countless situations which may necessitate that a matter be heard in Court.
Frequently Asked Questions About Probate
• What is meant by "Probate?"
• How do I begin the probate procedure?
• How is an administrator appointed when there is no will?
• What kind of information should I collect?
• What if the will is not properly executed?
• How soon must state inheritance taxes be paid?
• Are unpaid inheritance taxes a lien on property?
• How about federal estate taxes?
• How many Surrogate's Certificates ("Shorts") will I need?
• When is the will admitted to probate?
• What are Surrogate's Certificates used for?
• Is it necessary to send copies of the will to the beneficiaries and next of kin?
• Basically, what is the Executor/Administrator required to do?
• Where does the Executor/Administrator obtain the funds to pay debts?
• Am I entitled to compensation for acting as Executor or Administrator?
• How do I handle joint bank accounts or certificates of deposit?
• Is all the paperwork necessary even on small estates?
• How about small estates with no surviving spouse?
• Do I need formal accounting?
• If a formal accounting is made, can anyone take exception of it?
• What do I do about a safe deposit box in the name of the decedent?
• How can I protect myself from creditors after the estate is settled?
• Do I have to pay all claims?
• How do I prove that legacies were paid?
• What if there is no will?
• Without a will, how much is the surviving spouse entitled to? (intestate share of the surviving spouse)
What is meant by "Probate?"
Upon the death of the testator or testatrix (maker of the will), the probate procedure can begin. This is the legal process which establishes the genuineness of the will. It is done by the Surrogate in the county where the testator or testatrix resided at the time of death. Although the process can begin at any time, the Surrogate cannot issue letters until the 11th day after the death of the decedent.
How do I begin the probate procedure?
The executor, executrix, or personal representative can be appointed and the will admitted to probate in most cases by going to the Surrogate's Court with the original will, certified death certificate, and, of the will is not self-proven, at least one of the witnesses who signed the will must prove the signature of the will.
How is an administrator appointed when there is no will?
When there is no will, an administrator, administratrix, or personal representative is appointed by the Surrogate's Court. The surviving spouse has the first right to apply for the position of administrator; however, any heir of the decedent may be appointed. When one of several heirs seeks to be appointed administrator, all other heirs must renounce their right to be appointed administrator. In most cases, a surety bond must be furnished to cover the value of the real and personal property in the estate.
What kind of information should I collect?
The decedent's personal representative should make a list of all the next of kin of the person who died, along with their degree of relationship, addresses, and ages.
What if the will is not properly executed?
The Surrogate will advise the personal representative as to the proper procedure in order to allow the will to be admitted to probate. This procedure normally involves a formal hearing before a Judge of the Superior Court.
How soon must state inheritance taxes be paid?
State inheritance taxes must be filed and the tax paid within eight (8) months after decedent's death to avoid interest.
Are unpaid inheritance taxes a lien on property?
Yes, to sell real estate, you will need to obtain "tax waivers" from the New Jersey State Transfer Inheritance tax Bureau, and the waivers must be filed with the County Clerk in the county where the land is located. Land held by husband and wife as "tenants by the entirety" need not be reported and may be transferred without a waiver.
Other property may be subject to a lien for unpaid inheritance taxes such as bank accounts and certificates of deposit.
How about federal estate taxes?
Under present law, there is no federal tax due unless the estate exceeds the following amounts:
1984 - $325,000
1985 - $400,000
1986 - $500,000
After 1986 - $600,000
There is also an unlimited federal marital deduction, which means unlimited amounts of property can be transferred between spouses without estate or gift taxes.
How many Surrogate's Certificates ("Shorts") will I need?
A list of all the assets of the estate should also be prepared to help determine the number of Surrogate's Certificates that must be issued by the probate clerk in the Surrogate's Office.
When is the will admitted to probate?
After all the proper forms are filed with the probate clerk, the clerk will prepare a judgement which admits the will to probate. The Surrogate then signs the judgement and issues "Letters Testamentary."
What are Surrogate's Certificates used for?
Surrogate's Certificates act as evidence of the authority of the personal representative (Executor, Administrator, Administratrix) to act. These certificates are necessary to accomplish certain tasks such as transferring stocks, closing bank accounts, etc.
Is it necessary to send copies of the will to the beneficiaries and next of kin?
From the time the will is probates, the Executor has 60 days to mail all beneficiaries and next of kin a copy of the will, along with a notice giving the specific date and place the will was entered into probate.
Basically, what is the Executor/Administrator required to do?
The Executor or Administrator is, in general, required to collect and safeguard all of the assets of the estate and eventually to pay all the debts of the decedent, as well as any taxes due, and be able to provide an accounting of his actions to the beneficiaries or heirs. You may wish to call your attorney to give you further advice as to specific duties and obligations.
Where does the Executor/Administrator obtain the funds to pay debts?
The executor may, in most cases, withdraw up to one-half of the funds in the decedent's New Jersey bank accounts. Generally, the Executor should open an estate checking accounts which can be used to receive and disburse funds.
Am I entitled to compensation for acting as Executor or Administrator?
An Executor or Administrator is entitled to corpus commissions of 5% of the first $200,000.00 of estate assets subject to administration, 3 1/2% on the excess over $200,000.00 up to $1,000,000.00 and 2% or such other percentage as the court may determine on the excess over $1,000,000.00.
If there is more than one executor or administrator, an additional 1% corpus commission may be allowed by the court for each additional executor or administrator.
In addition to corpus commissions, an Executor or Administrator is entitled to income commissions of 6% of income earned on estate corpus during the administration of the estate.
How do I handle joint bank accounts or certificates of deposit?
Certain bank accounts and certificates may be owned with rights of survivorship, which means that upon the death of one party to the account, the surviving party (or parties) become the sole owner (owners). If the decedent maintained such an account, the survivor will be able to withdraw one-half of the funds in the account by giving the bank a death Certificate and without the need to provide anything from the Surrogate. The other half will not be released until a tax waiver is issued by the New Jersey transfer Inheritance Tax Bureau, normally after the tax is paid and the return is filed.
Under the new inheritance tax laws governing estates from spouse to spouse, when the bank account is co-owned, funds may be transferred with a copy of the death certificate, without any type of certificate from the surrogate's office. The spouse will sign an L-8 tax waiver, usually completed by the financial institute. If the account is in the name of the decedent only, the bank will require a certificate from the surrogate in addition to the L-8.
When the bank account is co-owned by any other Class A, (parents, grandparents, children, grandchildren, adopted children, or stepchildren), the procedure is the same as spouse to spouse, except the co-owner will sign an L-8 tax waiver. If the account is in the name of the decedent only, the bank will require a certification from the surrogate in addition to the L-8.
Transfer of real estate to a Class A beneficiary: To obtain a real estate tax waiver, Form L-9 is used in estates of resident descendent only, and filed directly with the Division of Taxation. The waiver, when received is filed in the County Clerk's Office.
Is all the paperwork necessary even on small estates?
There is a procedure whereby the assets of small estates can be transferred to the surviving spouse without the necessity of administration. The spouse files an affidavit stating, among other things, that the decedents had no will and that all of the real and personal assets of the decedent do not exceed $10,000.
How about small estates with no surviving spouse?
A similar procedure is used when the decedent dies without a will and leaves to surviving spouse but does leave next of kin. In such a case, if the total value of the real and personal property does not exceed $5,000.00, one of the next of kin with the consent of the others may file an affidavit in lieu of administration.
Do I need formal accounting?
In New Jersey, most estates are settled without having formal court accountings. Instead, the Executor/Administrator obtains the written agreement and consent of all the beneficiaries dispensing with a formal accounting, approving the actions of the executor/Administrator, the amount and manner of distribution and releasing the Executor/Administrator from further liability.
If a formal accounting is made, can anyone take exception to it?
If the Executor/Administrator, any interested party or the Court wants a formal judicial accounting, it will consist of a detailed summary of the transactions incident to the administration of the estate. Any party who has an interest in the account and who disagrees with the account can take "exception" to the account.
What do I do about a safe deposit box in the name of the decedent?
Individuals generally keep their will in their safe deposit box. The personal representative is permitted to remove the original will, as well as a deed to a cemetery plot and certain life insurance policies from the decedent's safe deposit box before probate. The executor should contact the banking institution where the safe deposit box is located to determine their requirements to release the balance of the contents of the box.
How can I protect myself from creditors after the estate is settled?
It may be advisable for the Executor to obtain an order requiring public notice to creditors of the decedent requiring then to present their claims within six months from the time of the order. This notice is published by the Surrogate. The Executor may then act in reliance upon the belief that all creditors have presented claims within that period.
Do I have to pay all claims?
If claims are made, the Executor does not have to automatically accept the claims but can dispute them and has three months to make any decisions.
How do I prove that legacies were paid?
The Executor has a duty to pay the legacies or distribute shares as provided for under the will; however, when he/she does so, he/she must take a release and refunding bond from the person taking the share. The refunding bond is then forwarded to the Surrogate for filing and recording.
What if there is no will?
If the decedent dies without a will (intestate), there is a statute which determines to whom the decedent's property is to be distributed according to the degree of family relationship.
Without a will, how much is the surviving spouse entitled to?
The intestate share of the surviving spouse is:
- The entire intestate estate if:
- No decedent or parent of the descendant survives the decedent; or
- All of the decedent's surviving descendants are also descendants of the surviving spouse and there is no other descendant of the surviving spouse who survives the decendent;
- The first 25% of the intestate estate, but no less than $50,000.00 nor more than $200,000.00, plus three-fourths of any balance of the intestate estate, if no descendant of the decendent survives the decendent, but a parent of the decendent survives the decendent;
- The first 25% of the intestate estate, but not less than $50,000.00 nor more than $200,000.00, plus one-half of the balance of the intestate:
- If all of the decendent's surviving descendants are also descendants of the surviving spouse and the surviving spouse has one or more surviving descendants who are not descendants of the decedent; or
- If one or more of the decedent's surviving descendants is not a descendant of thesurviving spouse.