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Sunday, April 24, 2016

Probate Answers

Probate Answers

Probate is the process where after death the instructions of the Will are carried out. Will is admitted to “Probate” in the County Surrogate. Some people refer to the Surrogate as the Will Clerk. 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.
The probate application must contain the following information:
1. the applicant's residence;?
2. the name, domicile and date of death of the decedent;?
3. the names and addresses of the decedent's spouse, heirs (those entitled to take under the laws of interstate succession), and any person named to serve as Executor;?
4. the ages of any minor heirs; and?
5. the names of the testator's children when the Will was made and the names of children born and adopted after the Will was made, or their children, if any.
To minimize time spent in the Surrogate, it is recommended, and in some counties required, that before an Executor submits the Will for probate the executor’s attorney or executor send the Court:
1) a data sheet (referred to in some counties as an information sheet or a fact sheet) containing the information needed by the Surrogate to complete the application;
2) a copy of the Will; and
3) a copy of the death certificate.
 more at

FILING A PROBATE APPLICATION Upon the death of a person, a probate proceeding may be commenced by offering the decedent's (the dead person's ) last Will for probate in the Surrogate's Court of the county in which the decedent was domiciled at death. R. 4:80-1(a). Generally, the Executor nominated in the Will brings the proceeding by filing a verified application with the Court.

When the applicant files the original Will for probate, the applicant must also file a death certificate (and original with a raised seal). A filing fee of approximately $150 must be paid. Once the Will, application and death certificate are filed, the Surrogate will review the papers, and if there are no irregularities or objections, admit the Will to probate. Although New Jersey law prohibits admission of a Will to probate within 10 days of the testator's death, an applicant may submit the application prior to expiration of the 10-day period. If the Will is filed after the 10-day waiting period, many Courts will issue a judgment for probate contemporaneously with the filing of the probate papers.
Qualifying the Executor
Once the Will is admitted to probate, the Court will issue letters testamentary to an Executor who has properly qualified to serve. An Executor named in a Will qualifies to serve by filing a form affidavit in which the Executor agrees to perform his or her duties. The nominated Executor must also provide a power of attorney to the Surrogate empowering the Surrogate to accept service of process of claims against the estate. Once the Executor qualifies, the Court then issues letters testamentary.
Mailing Probate Notices
After a Will is admitted to probate, the Executor’s Attorney or Executor must mail within 60 days a notice of probate to the decedent's spouse, heirs and all beneficiaries under the Will. The notice of probate should contain the executor's name and address, place and date that the Will was probated, and an offer to furnish a copy of the Will upon request. Within 10 days of mailing the notice the Executor’s Attorney or Executor should file proof of service of the notice with the Surrogate's Court. Once notice of probate has been sent and proof of mailing has been filed the probate process is essentially completed.
Completing the probate process should cause only minimal delay, perhaps a few weeks, in administering a decedent's affairs. The cost of admitting a Will to probate should be limited. Unlike in some other states, the Surrogate's filing fee in New Jersey is the same regardless of the size of the estate. See Zimiles Probate is not a Dirty word in New Jersey N.J. Lawyer pg. 14 ( July/August 1992)
How do I begin the probate procedure?
The Executor 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, if the Will is not self-proven, at least one of the witnesses who signed the Will must prove the signature on 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 of 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 tax returns 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?
In 2008 there is no federal tax due unless the estate exceeds $2,000,000. However, there is a New Jersey Estate tax for estates over $675,000.
There is also an unlimited federal marital deduction, which means unlimited amounts of property can be transferred between spouses without estate of gift taxes.
How many Surrogate's Certificates (Shorts) Will I need?
A list of all of 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 judgment which admits the Will to probate. The Surrogate then signs the judgment 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, Trustee ) 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?
From the time the Will is probated, the Executer has 60 days to mail all beneficiaries a notice that they can be provided with a copy of the Will, along with a notice giving the specific date and place the Will was entered into probate. See Zimiles Probate is not a Dirty word in New Jersey N.J. Lawyer
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 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. An Executor or Administrator must obtain the necessary legal documents, called either LETTERS TESTAMENTARY (for an Executor) or LETTERS OF ADMINISTRATION (for an Administrator), are obtained through the Surrogate in the county in which the DECEDENT (the deceased person) resided at the time of death.
The duties of the personal representative include:
* - finding the Will and having it PROBATED. Probate is the legal procedure used to establish the validity of a Will.?* - locating and protecting the assets of the estate.?* - finding and notifying the heirs.?* - paying the debts, expenses, and taxes of the estate from the assets of the estate.?* - complying with the requirements of state and federal law.?* - distributing property to the heirs after all proper procedures have been followed.
Is an attorney necessary in estate administration?
As a practical matter, it is very difficulty for a non-lawyer to correctly follow the required procedures in administering an estate without the assistance of an attorney. The personal representative selects the attorney for the estate. 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 account 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 (or owners). If the decedent maintained such an account, the survivor Will be able to withdraw on-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.
Is all this 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 decedent had no Will and that all of the real and personal assets of the decedent do not exceed $10,000.

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.
Estate administration and Probate Newsletter 2015
Kenneth Vercammen, Esq. Co-Chair ABA Probate & Estate Planning Committee
1.  Executor Duties and Responsibilities
2. Power of Attorney   
3  Provisions in a Living Will
4. Removing Executor of an Estate and complaint for accounting by an unhappy Beneficiary
5. Upcoming seminars 
1. Executor Duties and Responsibilities
At some point in time, you may be asked to serve as the executor of the estate of a relative or friend, or you may ask someone to serve as your executor. An executor’s job comes with many legal obligations. Under certain circumstances, an executor can even be held personally liable for unpaid estate taxes. Let’s review the major duties involved, which we’ve set out below.
      In General, the executor’s job is to 
1. Administer the estate--i.e., collect and manage assets, file tax returns and pay taxes and debts--and 2. Distribute any assets or make any distributions of bequests, whether personal or charitable in nature, as the deceased directed (under the provisions of the Will).
Duty of Executor in Probate & Estate Administration
1. Conduct a thorough search of the decedents personal papers and effects for any evidence, which might point you in the direction of a potential creditor;
2. Carefully examine the decedents checkbook and check register for recurring payments, as these may indicate an existing debt;
3. Contact the issuer of each credit card that the decedent had in his/her possession at the time of his/ her death;
4. Contact all parties who provided medical care, treatment, or assistance to the decedent prior to his/her death;
Duties/ Executor to Do
Fill out surrogate info sheet and send to surrogate
Bring Will to Surrogate from Probate 
Notice of Probate to Beneficiaries (Attorney will handle)
If charity, notice to Atty General (Attorney will handle)
File notice of Probate with Surrogate (Attorney will handle)
File first Federal and State Income Tax Return [CPA- ex Marc Kane]
Prepare Inheritance Tax Return and obtain Tax Waivers (Attorney will handle)
Apply to Federal Tax ID #
Set up Estate Account at bank (pay all bills from estate account)
Pay Bills
File waivers within 8 months upon receipt (Attorney will handle)
Prepare Informal Accounting
Prepare Release and Refunding Bond (Attorney will handle)
Obtain Child Support Judgment clearance (Attorney will handle)
        Let’s take a look at some of the specific steps involved and what these responsibilities can mean. Chronological order of the various duties may vary.
      Step 1: Probate. The executor must probate the Will. Probate is a process by which a Will is admitted. This means that the Willis given legal effect by the court. The courts decision that the Will was validly executed under state law gives the executor the power to perform his or her duties under the provisions of the Will.
       Step 2: Manage the Estate. The executor takes legal title to the assets in the probate estate. The probate court will sometimes require a public accounting of the estate assets. The assets of the estate must be found and may have to be collected. As part of the asset management function, the executor may have to liquidate or run a business or manage a securities portfolio. To sell marketable securities or real estate, the executor will have to obtain stock power, tax waivers, file affidavits, and so on.
     Step 3: Take Care of Tax Matters.
       An employer identification number (EIN) should be obtained for the estate; this number must be included on all returns and other tax documents having to do with the estate. The executor should also file a written notice with the IRS that he/she is serving as the fiduciary of the estate. This gives the executor the authority to deal with the IRS on the estates behalf.
        The executor is legally responsible for filing necessary income and estate-tax returns (federal and state) and for paying all death taxes (i.e., estate and inheritance). The executor can, in some cases be held personally liable for unpaid taxes of the estate. Tax returns that will need to be filed can include the estates income tax return (both federal and state), the federal estate-tax return, the state death tax return (estate and/or inheritance), and the deceased’s final income tax return (federal and state). Taxes usually must be paid before other debts. The New Jersey Estate tax starts from Estates over $675,000.
Often it is necessary to hire an appraiser to value certain assets of the estate, such as a business, pension, or real estate, since estate taxes are based on the fair market value of the assets. After the filing of the returns and payment of taxes, the Internal Revenue Service will generally send some type of estate closing letter accepting the return. Occasionally, the return will be audited.
Step 4: Pay the Debts. The claims of the estates creditors must be paid. Sometimes a claim must be litigated to determine if it is valid. Any estate administration expenses, such as attorneys, accountants and appraisers fees, must also be paid.
Step 5 Last step: Distribute the Assets. After all debts and expenses have been paid, distribute the assets 
         The executors legally imposed fiduciary duty is to act in all ways in the best interests of the estate and its beneficiaries. The duties of an executor can be difficult and challenging and should not be taken lightly. This is why it is important for the Executor to retain a skilled attorney to assist them and the estate. Casual or part-time attention is not likely to achieve success.
2. Reasons to sign a Power of Attorney 
A Power of Attorney allows your spouse or another person to administer your assets during your lifetime, either upon disability or now.  The lack of a properly prepared and executed Power of Attorney can cause extreme difficulties when an individual is stricken with severe illness or injury rendering him/her unable to make decisions or manage financial and medical affairs. 
In the absence of a Power of Attorney or other legal arrangement to distribute property if you become disabled, your family or partner cannot pay your bills or handle your assets. The result can be lengthy delays.  
The Power of Attorney can be effective immediately upon signing or only upon disability. 
Most people who give a Power of Attorney to someone else do it with the thought that if they should become ill or incapacitated or if they should travel, the Power of Attorney will permit the holder of it to pay their bills and to handle all of their affairs for them as limited in the Power of Attorney. 
The term durable in reference to a Power of Attorney means that the power remains in force for the lifetime of the principal, even if he/she becomes mentally incapacitated. A principal may cancel a Power of Attorney at any time for any reason. Powers granted on a Power of Attorney document can be very broad or very narrow in accordance with the needs of the principal.  
New Jersey has a detailed, expensive legal procedures, called Guardianships or conservatorships, to provide for appointment of a Guardian. These normally require lengthy, formal proceedings and are expensive in court. This means involvement of lawyers to prepare and file the necessary papers and doctors to provide medical testimony regarding the mental incapacity of the subject of the action. 
The procedures also require the involvement of a temporary guardian to investigate, even intercede, in surrogate proceedings. This can be slow, costly, and very frustrating.   Advance preparation of the Power of Attorney could avoid the inconvenience and expense of guardianship proceedings. This needs to be done while the principal is competent, alert and aware of the consequences of his / her decision. Once a serious problem occurs, it is usually too late.   

3  Provisions in a Living Will
         All States have declared that competent adults have the fundamental right in collaboration with their health care providers, to control decisions about their own health care.  States recognize in their laws and public policy, the personal right of the individual patient to make voluntary, informed, choices to accept, reject or to choose among various alternative courses of medical and surgical treatment.
         Modern advances in science and medicine have made possible the prolongation of the lives of many seriously ill individuals, without always offering realistic prospects for improvement or cure.  For some individuals the possibility of extended life is experienced as meaningful and of benefit.  For others, artificial continuation of life may seem to provide nothing medically necessary or valuable, serving only to extend suffering and draw out the dying process.   
         In order to assure respect for patients' previously expressed wishes when the capacity to participate actively in decision making has been lost or impaired; to facilitate and encourage a sound decision making process in which patients, health care representatives, families, physicians, and other health care professionals are active participants; to properly consider patients' interests both in their self-determination and well-being; and to provide necessary and appropriate safeguards concerning the termination of life-sustaining treatment for incompetent patients as the law and policy of this State and the Legislatures have enacted Living Will/ Advance Directives for Health Care Acts.
         The advance directive for health care (Living Will) requires a writing executed in accordance with the requirements of the state law.  It must be signed and dated in front of an attorney at law, other person authorized to administer oaths, or in the presence of two subscribing adult witnesses.  If the two adult witnesses are used, they both must attest that the declarant is of sound mind and not under undue influence.  A designated health care representative shall not act as a witness to the execution of the advance directive.  Since this is a legal document, it must be executed properly to be valid under the statute.

1. ______ shall be withheld or withdrawn as Life Sustaining Treatment.
2. ______ shall be provided to the extent medically appropriate even if other Life Sustaining Treatment is withheld or withdrawn.

       Directive as to Medical Treatment. I request that Life Sustaining Treatment be withheld or withdrawn from me in each of the following circumstances: (Initial all that apply)

1.  ______ If the life sustaining treatment is experimental and not a proven therapy, or is likely to be ineffective or futile in prolonging my life, or is likely to merely prolong an imminent dying process;
2.  ______ If I am permanently unconscious (total and irreversible loss of consciousness and capacity for interaction with the environment);
3. ______ If I am in a terminal condition (terminal stage of an irreversibly fatal illness, disease, or condition); or
4.  ______ If I have a serious irreversible illness or condition, and the likely risks and burdens associated with the medical intervention to be withheld or withdrawn outweigh the likely benefits to me from such intervention.
                         ______ None of the above. I direct that all medically appropriate measures be provided to sustain my life, regardless of my physical or mental condition.
Organ Donation – We suggest clients initial yes (initial one)

1. ______ Yes, I wish, if feasible, to donate for transplant any part or all of any organ, tissue, eyes, bone, arteries or other parts or portions of my body which may be useful to another person. My Health Care Representative may take any action in furtherance of this gift (which I intend to be an anatomical gift in accordance with N.J.S.A. 26:6-57 et. seq. or similar law).  Consistent with this gift life sustaining treatment may be temporarily continued or modified if I am brain dead so as to preserve and protect for transplant the useful portions of my body.

2. ______ No, I do not wish to make an anatomical gift.
         The declarant must designate one or more alternative health care representatives.  Health care representative means the person designated by you under the Living Will for the purpose of making health care decisions on your behalf.
I hereby designate   p1 to serve as my attorney-in-fact for the purpose of making medical treatment decisions. In the event p1 predeceases me or is unable or unwilling to act as my attorney-in-fact for the purpose of making medical treatment decisions, then I select ___
         An advance directive becomes operative when (1) it is transmitted to the attending physician or to the health care institution, and (2) it is determined pursuant to the Act that the patient lacks capacity to make a particular health care decision.
         Treatment decisions in pursuit of an advance directive shall not be made and implemented until there has been a reasonable opportunity to establish and where appropriate confirm, a reliable diagnosis for the patient which shall include the attending physician's opinion concerning the nature, cause, extent, and probable duration of the patient's incapacity.  This soon after shall be made a part of the patient's medical records.  For additional information or to have a Living Will prepared, see your attorney.  In addition, be certain your Last Will and testament is up to date.

4  Removing Executor of an estate and Complaint for accounting by an unhappy Beneficiary 
       A Complaint for Accounting is filed by your attorney with the Probate Part to request on accounting, removal of the current executor and selection of a new person to administer and wrap up the estate.
        A signed certification of one or more beneficiaries is needed. In addition, an Order to Show Cause is prepared by your attorney. The Order to Show Cause is to be signed by the Judge directing the executor, through their attorney, to file a written answer to the complaint, as well as appear before the court at a specific date and time.
        As with a litigated court matter, trials can become expensive. Competent elder law/probate attorney may charge an hourly rate of $300-$400 per hour, with a retainer of $3000 needed. Attorneys will require the retainer to be paid in full up front.
The plaintiff can demand the following:
(1) That the named executor be ordered to provide an accounting of the estate to plaintiff.
(2) Defendant, be ordered to provide an accounting for all assets of the person dated five years prior to death, if there was a Power of Attorney, sell before death. 
(3) Payment of plaintiffs attorneys fees and costs of suit for the within action.
(4) Declaring a constructive trust of the assets of the decedent for the benefit of the plaintiff and the estate.
(5) That the executor be removed as the executor/administrator of the estate and that our client be named as administrator of the estate.
(6) That the executor be barred from spending any estate funds, be barred from paying any bills, be barred from taking a commission, be barred from writing checks, be barred from acting on behalf of the estate, except as specifically authorized by Superior Court Order or written consent by the plaintiff.
      Executors are typically entitled to receive a commission to compensate them for work performed. 
         However, if you have evidence that the executor has breached their fiduciary duties or violated a law, the Superior Court accounting complaint can request that the commissions be reduced or eliminated.
        Occasionally, a family member is living in a home owned by the decedent. To keep family harmony, often this family member is permitted to remain in the home temporarily. However, it may later become clear that the resident has no desire on moving, and the executor has neither an intention to make them move nor to sell the house. The remedy a beneficiary has can be to have your attorney include in the Superior Court complaint a count to
1) Remove the executor
2) Remove the tenant and make them pay rent to the estate for the time they used the real property since death without paying rent
3) Compel the appraisal of the home and, thereafter, the sale of the property
4) Make the executor reimburse the estate for the neglect or waste of assets.
   For a beneficiary, you will probably eventually be requested to sign a release and refunding bond. If you have evidence of misappropriation, you may consider asking the executor for an informal accounting prior to signing the release and refunding bond. If you have concern regarding the handling of an estate, schedule an appointment to consult an experienced attorney.
5. Upcoming seminars
    Throughout the year area Senior Centers, Libraries and AARP groups hold seminars. Email us at for dates of upcoming programs, or if your group would like to have a speaker on Wills, Probate or Estate Administration

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