When a person passes away, their estate is either distributed according to their will or according to the state’s intestacy law. This process, referred to as probate, is overseen by either an executor or an administrator, depending on whether the person has left behind a will or not. Without a will, there is a significant possibility that the estate would not be distributed according to the deceased person’s wishes nor handled by a trusted individual.
There are different ways in which you can ensure that your estate’s probate will be handled by someone you trust. An experienced New Jersey probate lawyer can help you understand what probate actually is and how it can affect your estate. A skilled attorney can walk you through the process of probating an estate from the authentication of the will, to the distribution of assets to beneficiaries. Our New Jersey estate planning attorneys at Matus Law Group provide customized legal solutions to give you a sense of security for your family’s future. To learn more about our services, contact us today at (732) 785-4453.
Probate Administration in New Jersey
Probate is the legal process of authenticating and recognizing the Last Will and Testament of a deceased person – also referred to as a decedent. Probate also authorizes a personal representative to act on behalf of the decedent. The personal representative has the responsibility of pooling the decedent’s assets, paying off any outstanding debts to creditors, fulfilling legal obligations such as paying the estate tax, and distributing any remaining assets to the decedent’s heirs and beneficiaries.
Probate in New Jersey can proceed in different ways depending on whether the decedent left behind a valid will and whether they named their own personal representatives. A person who has left behind a will is referred to as a testator. In the event that the testator has named an executor in their will and the person assigned is willing to perform their duty, they will be referred to as the executor of the testator’s estate. The distribution of the testator’s estate will proceed according to their Last Will and Testament.
Conversely, if the decedent did not leave behind a will or has named an executor who cannot perform their duty, the state can assign an administrator from the decedent’s heirs or assign a public administrator if there is no suitable candidate. Once the administrator has done their probate duties, they would proceed with facilitating the distribution of the estate’s remaining assets to the decedent’s heirs according to New Jersey intestacy law.
An estate’s executor or administrator has significant responsibilities that need to be fulfilled. The executor or administrator is also afforded the authority to act on behalf of the decedent’s estate which should not be taken lightly. An estate’s personal representative is accountable to the decedent’s heirs and beneficiaries as well as the estate’s creditors and can be subject to legal challenges if they are found to be performing their duty irresponsibly. To compensate them for the services they rendered, personal representatives are allowed to receive a commission computed as a percentage of the total value of the estate and its income.
Duties and Responsibilities of an Executor
An executor is a person or an entity appointed by the testator of a will to settle the estate once the testator has passed. The testator can name a person, a bank, or a trust company. It is also possible to appoint multiple co-executors to fulfill the duty of administration which can be beneficial in cases where the testator left behind a sizable estate.
Being assigned as an executor does not make a person obligated to accept the responsibility. They can decline the responsibility or be relieved at any time during the probate administration process. New Jersey has a few limitations regarding who can be assigned as an executor.
- Must be of legal age
- Did not acquire the position through fraud or misconduct
- Is not legally incapacitated
- Is not otherwise unsuitable to serve under N.J. Stat. Ann. § 3B:14-21; 77 N.J. 316
It is also possible to assign a successor executor as a contingency in the case that the initial choice is unable to perform their duties. It takes considerable time and effort to take on the responsibility of an executor. This is why testators can also opt to hire a professional executor to take on the task. Lawyers, bankers, and accountants are most commonly hired to act in this capacity.
When the testator passes away, it is the task of the executor to locate and submit the will to the Surrogate’s Court to initiate the probate process. The will must be submitted to the Surrogate’s court in the county where the decedent resided. Once the will has been validated, the court will issue Letters Testamentary to provide the executor with the authority to liaise with banks and other relevant institutions when conducting business in the estate’s capacity.
As mentioned, the executor would also be responsible for locating the testator’s assets and valuing them either according to the market value at the time of death or an alternate valuation date as determined by the Internal Revenue Code. Locating the testator’s assets is especially important due to the fact that, while other assets can undergo probate in the county where the testator resided, probate for real estate may need to be dealt with in the county where the property is located. The executor is tasked with keeping an Inventory of Estate Assets and giving notice to any interested claimants to the estate regarding the assets and the valuation of the estate.
Keeping clear and detailed information about the testator’s estate is important to account for any debts. It is also the task of the executor to pool and validate any claims made by creditors. If the claim has been denied, the creditor can escalate the claim to the court which will make the final decision on the validity of the claim.
The executor also has the responsibility of paying the last income tax returns on behalf of the decedent. Estate taxes also have to be paid one year from the date of the decedent’s passing.
If there are remaining assets after all the debts and taxes have been paid, the executor would be responsible for distributing the assets in accordance with the testator’s will. If the estate is insolvent, meaning its liabilities cost more than its assets, debts should be paid according to the order of priority as determined by NJ statute. The personal representative will petition the court to declare the estate insolvent and for the court to approve a repayment plan for the outstanding debts. To ensure that the right order of priority is followed, it is important to get the help of an experienced New Jersey probate administration attorney.
It is also important to note that if the beneficiaries of the estate are liable for back child support, their inheritance may be seized as part of a Child Support Judgment.
Choosing the right person as the executor of your will is as important as building a comprehensive estate plan. An executor should be a person you trust to act on your behalf and who will fulfill their duties in accordance with your best interests and that of your estate.
Executor vs Executrix
The roles and responsibilities of an executor and an executrix do not differ. An executor can be used to refer to a male individual or a general entity assigned to settle the affairs of a testator while an executrix is meant to refer to a female personal representative. While it is an official role, the term executrix is not commonly used as people acting in the role are generally referred to as executors.
| Probate Administration in New Jersey | Description |
|---|---|
| Authenticating the Will | Probate authenticates the Last Will and Testament and authorizes a personal representative to act. |
| Asset Management | The personal representative pools the decedent’s assets, pays debts, fulfills legal obligations, and distributes remaining assets. |
| Distribution of Assets | Assets are distributed according to the decedent’s wishes (if outlined in a will) or intestacy law. |
| Responsibilities of Representative | Executors/administrators must fulfill their duties responsibly, being accountable to heirs, beneficiaries, and creditors. |
| Commission for Personal Representative | Personal representatives may receive a commission based on a percentage of the estate’s total value. |
Executor vs. Administrator vs. Personal Representative
It is important to understand the roles of an executor, an administrator, and a personal representative when dealing with a deceased person’s estate. A personal representative is a general term that refers to a person assigned to handle an estate. This individual could be an executor or an administrator, the distinction being dependent on the presence of a will.
When a will is present, the deceased typically specifies an executor to fulfill their final wishes. This executor is officially empowered by a probate judge through the issuance of Letters Testamentary, which authorizes them to act on behalf of the estate. The decedent may select anyone as an executor, such as attorneys or trust companies, as long as they are of legal age and not under conservatorship. It’s also a good practice to designate alternate executors in case the first choice cannot or does not want to act.
If there is no will or the executor named in the will is not confirmed by the court, then an administrator is appointed to manage the estate. This individual receives Letters of Administration and is generally chosen following a specific legal order of precedence, usually starting with the deceased’s spouse and then other family members. The responsibilities carried out by an administrator are similar to those of an executor, except they are not specifically chosen by the deceased.
When a Person Dies Without a Will
The difference between an executor and an administrator mostly lies in the way they are appointed rather than the way they perform their tasks or the scope of their responsibilities.
An administrator is tasked with settling the affairs of a decedent who did not leave a will behind (dying intestate). Compared to an executor who is assigned through a will, an administrator is someone who is assigned by the Surrogate’s Court or someone who sends in an application from the pool of the decedent’s heirs. Qualified administrators would be given letters of administration as an equivalent to letters testamentary that gives them the authority to handle the decedent’s assets.
The Surrogate’s Court recognizes a hierarchy of heirs to determine the order of who would be given precedence when applying as an administrator. The court will typically honor the following order in accordance with the statute of descent and distribution:
- Spouse or domestic partner
- Children above the age of 18
- Guardians of any minor children, if there are no spouses or adult children
- The decedent’s parents
- The decedent’s siblings
- The decedent’s grandparents
- The decedent’s aunts and uncles
- The decedent’s stepchildren
To apply as an administrator, the interested party should submit the following documents to the Surrogate’s Court and be interviewed by the probate clerk to determine the interested party’s standing in their eligibility for appointment.
- Certified Death Certificate of the decedent
- A detailed list of the decedent’s assets
- An estimate of the decedent’s debts and liabilities
- Contact information for the heirs at law
In the event that there are multiple applicants with equal rights to become administrator, renunciations of rights or declarations of consent may be necessary to appoint a sole administrator for the estate. If the relatives with an equal degree of kinship cannot agree on who will become the administrator, the Surrogate’s Court can make the determination.
Due to the reason that administrators apply for the responsibility of handling the decedent’s estate and are not appointed by the decedent themselves, the Surrogate’s Court can require them to pay a bond. This bond acts as insurance in the event that the administrator misappropriated the estate’s assets for their own benefit. The cost of the bond is determined by the Surrogate’s Court and is often calculated based on the size of the estate.
If additional assets of the decedent are found after the application for administration has been submitted, the administrator is required to declare these assets to the court by way of filing an Affidavit for Additional Funds.
The process of probating a decedent’s estate as an administrator is largely similar to that of an executor. However, when the time comes that the remaining assets are distributed after the creditors and taxes are paid, minors who have a share in the inheritance need to have an appointed guardian to protect their interests. The hierarchy of inheritance would also follow New Jersey’s intestacy laws in the absence of a will.
Special Cases in Intestacy Law
When a person dies intestate and with only a minimal estate, specific members of the decedent’s family can file an affidavit with the Surrogate’s Court to allow them to become the estate’s de facto administrator to some capacity.
Affidavit of Surviving Spouse – The decedent’s surviving spouse would be the only one able to inherit and file this type of affidavit. The surviving spouse can receive letters of administration to their decedent spouse’s estate as long as the estate is valued at no more than $20,000.
Affidavit of Next of Kin – Those who are entitled to inherit according to intestacy law may apply under this affidavit. However, if there are multiple next of kin who share the same degree of kinship, notarized documents of consent from the other individuals must be secured before a person can obtain letters of administration. Assets in the decedent’s estate should also not exceed $10,000 in entirety. The next of kin should also be able to provide certification of their relationship to the decedent.
How Long Does an Executor or Administrator Have To Distribute Assets During Probate?
Personal representatives in a probate administration case are mandated by New Jersey statute to close out the estate and distribute any remaining assets to the heirs/beneficiaries in a timely manner. However, there is no set minimum or maximum time by which a personal representative should have already finalized the estate administration. If the estate is sizable enough to be taxed, the executor/administrator should wait for the closing letter from either the state or the IRS to be able to close out the estate.
Fiduciary Duty of a Personal Representative
Once the personal representative has been issued either the letters testamentary or letters of administration necessary to have authority over the estate, they have a fiduciary responsibility to ensure that they act in the best interest of the estate and the heirs/beneficiaries.
If the estate contains assets such as business shares and stocks, their fiduciary responsibilities allow personal representatives to act as proxies for the decedent in managing the businesses. Personal representatives are required to promote the interests of the estate and its beneficiaries when situations arise in which the personal representative can make a choice regarding the business. If the shares are enough such that the personal representative would be holding a controlling interest, the personal representative should use that control for the benefit of the business.
Equitable owners such as co-owners or co-shareholders may be able to get the decedent’s stock depending on the administration of the estate and on whether the stock is part of the estate to be distributed.
Duties and Responsibilities of Executors: Trusts vs Wills
In estate planning, wills and trusts are both tools that can require the help of a separate individual. This help is needed to administer the terms of the documents as per the wishes of the grantor (in the case of trusts) or testator (for wills). The role of executor is given when a person is appointed through a will while a person who is appointed through a trust is called a trustee.
Executors have a more temporary role and only take on fiduciary duties once the testator has passed away. Most duties performed by the executor include the liquidation of assets and termination of the testator’s pending accounts. An executor would need to acquire letters testamentary before they are authorized to handle the estate’s affairs.
On the contrary, trustees can exercise their authority to handle assets in a trust while the grantor is still alive. The role of trustee may even be performed by the grantor themself. The role of trustee expires when the trust runs out of assets or is terminated in accordance with the trust’s conditions. Duties performed by the trustee involve the administration of assets, including the management and disposal or distribution of assets, and liaising with creditors and beneficiaries. The trustee’s authority is derived from the legal authority of the trust itself and does not need to be confirmed by the Surrogate’s Court to be considered valid.
Trusts can be a useful tool to avoid probate and can also provide a lot of advantages not afforded to estates undergoing probate. To learn more about how trusts can help avoid probate, contact Matus Law Group today at (732) 785-4453 to schedule a consultation.
Getting the Help of An Experienced New Jersey Probate Lawyer
To ensure that your goals for your estate are honored, creating an estate plan with a legally binding Last Will and Testament and choosing an executor you trust is important.
Our team of experienced probate and estate planning professionals at Matus Law Group provides quality legal counsel and representation relevant to the probate administration process in New Jersey. We can perform a comprehensive evaluation of your financial circumstances and assist you in creating a plan that can streamline the probate process and honor your estate planning goals.
Contact us today at (732) 785-4453 to schedule a consultation with one of our top-rated New Jersey probate attorneys.
