Thursday, August 17, 2017

Advice to the Executors of an Estate

Advice to the Executors of an Estate


Advice to the Executors of an Estate

The New Probate Statute of NJ revised various sections of the New Jersey law on Wills and estates. law makes a number of substantial changes to the provisions governing the administration of estates and trusts in New.
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;

Your attorney will not be able to file the NJ inheritance tax return until it is clear as to the amounts of the medical bills. Medical expenses can be deducted in the inheritance tax.
Under United States Supreme Court Case, Tulsa Professional Collection Services, Inc., v. Joanne Pope, Executrix of the Estate of H. Everett Pope, Jr., Deceased, the Personal Representative in every estate is personally responsible to provide actual notice to all known or readily ascertainable creditors of the decedent. This means that is your responsibility to diligently search for any readily ascertainable creditors.
Other duties/ Executor to Do
Bring Will to Surrogate
Apply to Federal Tax ID #
Set up Estate Account at bank (pay all bills from estate account)
Pay Bills
Notice of Probate to Beneficiaries (Attorney can handle)
If charity, notice to Atty General (Attorney can handle)
File notice of Probate with Surrogate (Attorney can handle)
File first Federal and State Income Tax Return [CPA- ex Marc Kane]
Prepare Inheritance Tax Return and obtain Tax Waivers (Attorney can handle)
File waivers within 8 months upon receipt (Attorney can handle)
Prepare Informal Accounting
Prepare Release and Refunding Bond (Attorney can handle)
Obtain Child Support Judgment clearance (Attorney will handle)
Lets review the major duties involved-

In General. The executors 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). Lets take a look at some of the specific steps involved and what these responsibilities can mean. Chronological order of the various duties may vary.

Probate. The executor must probate the Will. Probate is a process by which a Will is admitted. This means that the Will is 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.
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.

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.

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.

Take Care of Tax Matters. 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 deceaseds final income tax return (federal and state). Taxes usually must be paid before other debts. In many instances, federal estate-tax returns are not needed as the size of the estate will be under the amount for which a federal estate-tax return is required.
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.

Distribute the Assets. After all debts and expenses have been paid, the executor will distribute the assets. Frequently, beneficiaries can receive partial distributions of their inheritance without having to wait for the closing of the estate.
Under increasingly complex laws and rulings, particularly with respect to taxes, in larger estates an executor can be in charge for two or three years before the estate administration is completed. If the job is to be done without unnecessary cost and without causing undue hardship and delay for the beneficiaries of the estate, the executor should have an understanding of the many problems involved and an organization created for settling estates. In short, an executor should have experience
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 executors job comes with many legal obligations. Under certain circumstances, an executor can even be held personally liable for unpaid estate taxes. Lets review the major duties involved, which weve set out below.

In General. The executors 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). Lets take a look at some of the specific steps involved and what these responsibilities can mean. Chronological order of the various duties may vary.

Probate. The executor must probate the Will. Probate is a process by which a Will is admitted. This means that the Will is 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.
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.

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.

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 estates 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.

Take Care of Tax Matters. 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 deceaseds final income tax return (federal and state). Taxes usually must be paid before other debts. In many instances, federal estate-tax returns are not needed as the size of the estate will be under the amount for which a federal estate-tax return is required.
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.

Distribute the Assets. After all debts and expenses have been paid, the distribute the assets with extra attention and meticulous bookkeeping by the executor. Frequently, beneficiaries can receive partial distributions of their inheritance without having to wait for the closing of the estate.
Under increasingly complex laws and rulings, particularly with respect to taxes, in larger estates an executor can be in charge for two or three years before the estate administration is completed. If the job is to be done without unnecessary cost and without causing undue hardship and delay for the beneficiaries of the estate, the executor should have an understanding of the many problems involved and an organization created for settling estates. In short, an executor should have experience.

http://www.njlaws.com/Advice-executor.html?id=2801&a=

Administration of Estates, Probates and Decedents Law in New Jersey 3B:10-6

Administration of Estates, Probates and Decedents Law in New Jersey 3B:10-6


B:10-6. Acts of administrator before notice of will Lawful acts performed in good faith by an administrator before notice of a will and purchases or transfers made by him in good faith before notice shall remain valid and shall not be impeached or altered by an executor upon probate of the will.

Nothing in this section shall be construed to relieve the administrator of any liability to the executor under the will for property unadministered or maladministered.

3B:10-7. Ancillary administration on estate of nonresident intestate Where a nonresident dies intestate seized of real property or possessed of personal property in this State, or where the evidence of his personal property shall be in the hands of any resident of this State, the surrogate's court of the county wherein any of the real or personal property or evidence thereof, is situate, or the Superior Court, shall, in an action upon satisfactory proof of intestacy, issue letters of administration upon the estate of the nonresident to the administrator of his estate or, on notice to the administrator as the court shall require, to any person who would be entitled to administration if the intestate had been a resident at his death.

3B:10-8. Administration by creditor of nonresident decedent If a personal representative of a nonresident decedent fails to apply in this State for letters testamentary or of administration within 60 days next after the death of the decedent and there is real or personal property of the decedent within this State, or the evidence thereof in the hands of a resident of this State, the surrogate's court of a county wherein the real property, or personal property or evidence, is situate, or the Superior Court, may, in an action by any person resident or nonresident, alleging himself to have a debt or legal claim against the decedent which by the law of this State survives against his representatives, issue letters of administration, with the will annexed or otherwise as the case may require, to some fit person to be designated by the court.

Prior to an appointment pursuant to this section, notice shall be given the foreign personal representative as the court shall prescribe.

3B:10-9. Record of appointment of personal representative; evidentiary effect If any person shall desire to have the appointment of a personal representative appointed in another state recorded in this State for the purpose of manifesting the authority of the personal representative to release or discharge real estate in this State from any mortgage, judgment, other lien or encumbrance which was held by his decedent the surrogate of the county wherein the real estate is situate, or the clerk of the Superior Court, may, upon the presentation to him of an exemplified copy of the record of the appointment of the personal representative, record and file the exemplified copy in his office, and the record or certified copies thereof shall be received as evidence in all courts of this State.

3B:10-10. Executor de son tort Whereas it is sometimes practiced to the defrauding of creditors, that persons who are entitled to the administration of the estate of an intestate will not accept administration, but suffer or procure the administration to be granted to others of indigent circumstances, from whom they, or others, by their means, by deeds of gifts, or by letters of attorney, obtain the estate of the intestate into their hands, and are not subject to the payment of the debts of the intestate, and so the creditors cannot have or recover their just debts and demands; therefore, if any person shall obtain, receive and have, any property or debts of an intestate, or a release or other discharge of any debt or duty due the intestate, upon any fraud as herein provided, without valuable consideration as shall amount to the value of the property or debts, or near thereabouts except it be in or towards satisfaction of some just debt, of the value of the same property or debts, to him owing by the intestate at the time of his decease, the person shall be charged and chargeable as executor of his own wrong so far only, as all the property and debts coming to his hands, or whereof he is released or discharged by the administrator, will satisfy.

However he shall not be charged for those just debts, contracted without fraud and upon a good consideration, which are owing to him by the intestate at the time of his decease, nor for payments made by him which lawful executors or administrators ought to pay.

3B:10-11. Administration ad prosequendum on death by wrongful act The surrogate's court of the county wherein an intestate resided at his death, or, if the intestate resided outside the State, the surrogate's court of the county wherein the accident resulting in death occurred, or the Superior Court, may grant letters of administration ad prosequendum to the person entitled by law to general administration. An administrator ad prosequendum shall not be required to give bond.

3B:10-12. Temporary administration The Superior Court may grant administration ad litem, temporary administration, administration pendente lite, or any form of limited administration.

3B:10-13. Duty to apply in this State for original letters of administration When an intestate is resident in any county of New Jersey at his death, it shall be the duty of the heir or any other person desiring original letters of administration upon his estate to make application therefor to the surrogate of that county or to the Superior Court of this State.

Any person having knowledge of the grant in a foreign jurisdiction of original letters of administration upon the estate of a person dying resident in any county of New Jersey, shall give information thereof to the Superior Court.

The court may direct the clerk of the court to issue and have served subpoenas or an order to show cause requiring the appearance before it, at a specified time, of any persons having any interest in the estate, and commanding them to abide the order of the court. The matter of the grant of letters of administration shall be wholly within the jurisdiction of the court.

3B:10-14. Appointment of debtor as executor; debt not discharged The appointment of a debtor as executor shall not, unless otherwise expressed in the will, be construed to discharge the executor from payment of the debt, but the debt shall be considered an asset in the hands of the executor and shall be accounted for in the same manner as any other part of the decedent's estate.

3B:10-15. Appointment of substituted administrators When a sole or sole surviving or remaining executor or administrator, with or without the will annexed, dies or is removed or discharged by the court after qualifying and entering upon the duties of his office but before the completion thereof, the vacancy so created shall, except as hereinafter provided, be filled by the appointment of a fit person to exercise the vacated office. The person so appointed shall be nominated substituted administrator with the will annexed or substituted administrator, as the case may be.

3B:10-16. Decedent's will to be observed Where administration is granted with the will annexed, the will of the decedent therein expressed shall be observed and performed.

3B:10-17. Manner in which appointment shall be made The appointment shall be made by the issuance of letters of substitutionary administration, with or without the will annexed as the case may be, by the surrogate's court or the Superior Court in the manner and upon the conditions prescribed for granting letters of administration to the first administrators in other cases.

3B:10-18. When appointment unnecessary The appointment of a substituted administrator shall not be required if the unadministered assets of the intestate or testator consist of money on deposit in a bank, trust company or savings and loan association not exceeding $1,000.00, in which event it shall be lawful for the Superior Court, in an action brought by any party in interest, to authorize the bank, trust company or savings and loan association to distribute to the persons entitled by law to receive the assets. Payments made pursuant to the authority of this section shall release the bank, trust company or savings and loan association from any claim of, or liability to, any person interested in the estate.

3B:10-19. Commencement of duties and powers of a personal representative The duties and powers of a personal representative commence upon his appointment. The powers of a personal representative relate back in time to give acts by the person appointed which are beneficial to the estate occurring prior to appointment the same effect as those occurring thereafter.

3B:10-20. Ratification of prior acts A personal representative may ratify and accept acts on behalf of the estate done by others where the acts would have been proper for a personal representative.

3B:10-21. Carrying out decedent's written funeral instructions Prior to appointment, a person named executor in a will may carry out written instructions of the decedent relating to his body, funeral and burial arrangements.

3B:10-22. Priority among letters A person to whom general letters of appointment are issued first has exclusive authority under the letters until his appointment is terminated or modified. If, through error, general letters of appointment are afterwards issued to another, the first appointed personal representative may recover any property of the estate in the hands of the personal representative subsequently appointed, but the acts of the latter done in good faith before notice of the first letters are not void for want of validity of appointment.

3B:10-23. Duty of personal representative to settle and distribute estate A personal representative is under a duty to settle and distribute the estate of the decedent in accordance with the terms of any probated and effective will and applicable law, and as expeditiously and efficiently as is consistent with the best interests of the estate. He shall use the authority conferred upon him by law, the terms of the will, if any, and any order in proceedings to which he is a party for the best interests of successors to the estate.

3B:10-24. Liability for acts of administration or distribution A personal representative shall not be surcharged for acts of administration or distribution if the conduct in question was authorized at the time. Subject to other obligations of administration, a probated will is authority to administer and distribute the estate according to its terms. An order of appointment of a personal representative is authority to distribute apparently intestate assets to the heirs of the decedent if, at the time of distribution, the personal representative is not aware of a pending proceeding to probate a will or to determine heirs, a proceeding to vacate an order entered in an earlier proceeding to probate a will, a formal proceeding questioning his appointment or fitness to continue. Nothing in this section affects the duty of the personal representative to administer and distribute the estate in accordance with the rights of claimants and others interested in the estate.

3B:10-25. Standing to sue and be sued Except as to proceedings which do not survive the death of the decedent, a personal representative of a decedent domiciled in this State at his death has the same standing to sue and be sued in the courts of this State and the courts of any other jurisdiction as his decedent had immediately prior to death.

3B:10-26. Standards of care to be observed Except as otherwise provided by the terms of a decedent's will, the personal representative shall observe the standards in dealing with the estate assets that would be observed by a prudent man dealing with the property of another, and if the personal representative has special skills or is named personal representative on the basis of representations of special skills or expertise, he is under a duty to use those skills.

3B:10-27. Right to possession of property transferred in fraud of creditors The right to possession of property transferred in fraud of creditors recovered for the benefit of creditors is exclusively in the personal representative.

3B:10-28. Expeditious settlement and distribution A personal representative shall proceed expeditiously with the settlement and distribution of a decedent's estate and do so without adjudication, order, or direction of a court, but he may invoke the jurisdiction of a court, in proceedings authorized by law to resolve questions concerning the estate or its administration.

3B:10-29. Possession and control of estate Except as otherwise provided by a decedent's will, every personal representative has a right to, and shall take possession or control of, the decedent's property, except that any tangible personal property may be left with or surrendered to the person presumptively entitled thereto unless or until, in the judgment of the personal representative, possession of the property by him will be necessary for purposes of administration. The request by a personal representative for delivery of any property possessed by an heir or devisee is conclusive evidence, in any action against the heir or devisee for possession thereof, that the possession of the property by the personal representative is necessary for purposes of administration. The personal representative shall pay taxes on, and take all steps reasonably necessary for the management, protection and preservation of, the estate in his possession. He may maintain an action to recover possession of property or to determine the title thereto.

3B:10-30. Power over title to property Until termination of his appointment a personal representative has the same power over the title to property of the estate that an absolute owner would have, in trust however, for the benefit of the creditors and others interested in the estate. This power may be exercised without notice, hearing, or order of court.

3B:10-31. Powers and duties of successor representative A successor personal representative has the same power and duty as the original personal representative to complete the administration and distribution of the estate, as expeditiously as possible, but he shall not exercise any power expressly made personal to the executor named in the will.

3B:10-32. Powers of surviving co-personal representative Unless the terms of the will otherwise provide, every power exercisable by co-personal representatives may be exercised by the one or more remaining after the appointment of one or more is terminated, and if one of two or more nominated as co-personal representatives is not appointed, those appointed may exercise all the powers incident to the office.

3B:11-1. Creator's reserved interest in trust alienable subject to creditors' claims The right of any
creator of a trust to receive either the income or the principal of the trust or any part of either thereof, presently or in the future, shall be freely alienable and shall be subject to the claims of his creditors, notwithstanding any provision to the contrary in the terms of the trust.

3B:11-2. Letters of trusteeship under a will A testamentary trustee or substituted testamentary trustee, before exercising the authority vested in him by virtue of any will admitted to probate by the Superior Court, or any surrogate's court of this State, shall obtain letters of trusteeship from that court.

3B:11-3. Trustees construed to be joint tenants All estates heretofore or hereafter granted or devised to trustees shall be construed to have vested and to vest an estate of joint tenancy in the trustees.
When a trustee is removed a conveyance or devise from the removed trustee to the old and new trustees or to the new trustees shall vest in the old and new trustees or the new trustees an estate in joint tenancy, notwithstanding any want of unity.

When a trustee dies or resigns or his office becomes vacant for any cause, and a new trustee is appointed, the surviving trustees, if any there be, and the new trustees shall hold the trust estate as joint tenants, and a conveyance of a right and interest in the trust estate from the surviving trustees, to the new trustee shall vest in all the trustees an estate in joint tenancy, notwithstanding any want of unity.

When a new, additional or substituted trustee is appointed by a court of competent jurisdiction or becomes such by operation of the terms of a will or other instrument or by operation of law, title to the trust assets shall forthwith vest in all the trustees in office including the new, additional or substituted trustee as joint tenants.

3B:11-4. Effect to be given consent by holders of general powers of appointment upon beneficiaries For the purpose of granting consent or approval with regard to the acts or accounts of a fiduciary or trustee, including relief from liability or penalty for failure to post bond, or to perform other duties, and for purposes of consenting to modification or termination of a trust or to deviation from its terms, the sole holder or all coholders of a presently exercisable general power of appointment, including one in the form of a power of amendment or revocation, are deemed to act for beneficiaries to the extent that the interests of the beneficiaries as objects, takers in default, or otherwise are subject to the power. As used in this section, a presently exercisable general power of appointment is one which enables the power holder to presently draw absolute ownership to himself.

3B:11-4.1. Limitations on powers of trustees; applicability; "interested party" defined 1. a. The following powers conferred by a governing instrument upon a trustee in his or her capacity as a trustee shall not be exercised by that trustee:

(1) The power to make discretionary distributions of either principal or income to or for the benefit of the trustee, the trustee's estate, or the creditors of either, unless either:

(a) limited by an ascertainable standard relating to the trustee's health, education, support or maintenance, within the meaning of 26 U.S.C. 2041 and 2514; or

(b) exercisable by the trustee only in conjunction with another person having a substantial interest in the property subject to the power which is adverse to the interest of the trustee within the meaning of 26 U.S.C. 2041(b) (1) (C) (ii);

If a trustee is prohibited by paragraph (1) of this subsection from exercising a power conferred upon the trustee, the trustee nevertheless may exercise that power but shall be limited to distributions for the trustee's health, education, support or maintenance to the extent otherwise permitted by the terms of the trust.

(2) The power to make discretionary distributions of either principal or income to satisfy any of the trustee's personal legal obligations for support or other purposes;

(3) The power to make discretionary allocations in the trustee's personal favor of receipts or expenses as between income and principal, unless such trustee has no power to enlarge or shift any beneficial interest except as an incidental consequence of the discharge of such trustee's fiduciary duties;

(4) The power to exercise any of the powers proscribed in this subsection with regard to an individual other than the trustee to the extent that such individual could exercise a similar prohibited power in connection with a trust that benefits the trustee.


b. Unless otherwise prohibited by the provisions of subsection a. of this section, a trustee may exercise a power described in that subsection in favor of someone other than the trustee, the trustee's estate, or the creditors of either.

c. If a governing instrument contains a power proscribed under subsection a. of this section the following shall apply:

(1) If the power is conferred on two or more trustees, it may be exercised by the trustee or trustees who are not so prohibited as if they were the only trustee or trustees; or

(2) If there is no trustee in office who can exercise such power upon application of any interested party, a court of competent jurisdiction shall appoint a trustee to exercise such power or, except as provided in subsection d. of this section, a successor trustee who would not be disqualified shall be appointed to exercise the power that the other trustees cannot exercise in accordance with the provisions of the trust instrument as if the office of trustee were vacant.

d. No beneficiary of a trust, in an individual, trustee or other capacity, may appoint, or remove and appoint, a trustee who is related or subordinate to the beneficiary within the meaning of 26 U.S.C. 672 (c) unless:

(1) the trustee's discretionary power to make distributions to or for such beneficiary is limited by an ascertainable standard relating to the beneficiary's health, education, support or maintenance as set forth in subsection a. of this section;

(2) the trustee's discretionary power may not be exercised to satisfy any of such beneficiary's legal obligations for support or other purposes; and

(3) the trustee's discretionary power may not be exercised to grant to such beneficiary a general power to appoint property of the trust to the beneficiary, the beneficiary's estate or the creditors thereof within the meaning of 26 U.S.C. 2041.

This subsection d. shall not apply if the appointment of the trustee by the beneficiary may be made only in conjunction with another person having a substantial interest in the property of the trust, subject to the power, which is adverse to the exercise of the power in favor of the beneficiary within the meaning of 26 U.S.C. 2041(b) (1) (C) (ii).

e. The provisions of this section shall not apply during the time that a trust remains revocable or amendable by the grantor.

f. This section applies to:

(1) Any trust created under a governing instrument executed 90 days or more after the effective date of this act, unless the governing instrument expressly provides that this act does not apply; and

(2) Any trust created under a governing instrument executed before 90 days after the effective date of this act, unless all interested parties affirmatively elect on or before three years after the effective date by a written declaration signed by or on behalf of each interested party and delivered to the trustee, not to be subject to the application of this act. In the case of a testamentary trust, such declarations shall be filed with the clerk of the court in which the will was admitted to probate.

g. In this section the term "interested party" means:

(1) Each trustee then serving; and

(2) Each person having an interest in income or principal whom it would be necessary to join as a party in a proceeding for the judicial settlement of a trustee's account or, if such a person has not attained majority or is otherwise incapacitated, the person's legal representative under applicable law or the person's agent under a durable power of attorney that is sufficient to grant such authority.

L.1996, c.41.

3B:11-5. Trustee's death or failure to act; appointment of new trustee by court; powers When a trustee appointed by a will probated in the surrogate's court of any county or a trustee appointed under a trust inter vivos as to real or personal property situate in any county fails or refuses to act or dies before the execution or completion of the trust committed to him, or absconds or removes from this State, is adjudicated a mental incompetent or becomes in any manner legally incapable of executing the trust, the Superior Court may remove the trustee, if he be alive, and appoint a suitable person or persons to execute the trust, and the trustee or trustees so appointed shall be entitled to the trust estate as fully and in the same manner as the original trustee was and shall have all the power and discretion of the original trustee.

3B:11-6. Vacancy in trusteeship upon discharge or removal When a trustee is removed or discharged by the Superior Court before the completion of the trust, the court may appoint a fit person or persons to fill the vacated office.

3B:11-7. Powers of new, substituted or additional trustees A duly appointed new, substituted or additional trustee shall have the same power and discretion with respect to the investment, management, conversion, sale or other disposition of the trust estate, whether real or personal, as was given to or vested in the original trustee or trustees named in or appointed by the will or other instrument creating or continuing the trust, notwithstanding the power or discretion may be directed by the will or other instrument to be exercised at the discretion of the original trustee or trustees unless the power or discretion of the original trustee or trustees is expressly prohibited by the will or other instrument to any new, substituted or additional trustee.

http://www.njlaws.com/AdministrationEstate.html?id=329&a=
 
 


Administrator of an Estate where there is no Will


Administrator of an Estate where there is no Will


ADMINISTRATOR OF A DECEDENTS ESTATE WHERE THERE IS NO WILL- DUTIES AND RESPONSIBILITIES

When a person dies without having a Will that is called intestateThe administration must be opened in the County where the decedent resided at his/her death. The person who is seeking to qualify as Administrator must bring into the Surrogatesoffice a certified copy of thedeath certificate, a complete list of names and addresses of all immediate next of kin of the decedent, and an exact amount of every asset in the decedents name alone. Your right to act as an Administrator is defined by law in the following relationship order:

FIRST - Spouse of the decedent

SECOND - Children of the decedent

THIRD - Parents of the decedent

FOURTH - Brothers and sisters of the decedent

FIFTH - Children of a deceased brother or sister
Persons having a prior or equal right to act as Administrator under the law will be required to renounce their right to act.

http://www.co.gloucester.nj.us/depts/s/surrogate/services/admaffidavits.asp

Who has the right to be appointed when an individual dies without a Will? The next of kin of the decedent have the right to be appointed. This is determined by statute. The surviving spouse or domestic partner has the first right. Children of the decedent are next. However, any heir may be appointed assuming they obtain the appropriate renunciations from any other heir who has an equal or prior right to be appointed.



If all the children agree that one person shall serve as Administrator, the Attorney will prepare Renunciations for the other children to sign. However, if some of the children will not sign, you will need to have your attorney file and Complaint and Order to Show Cause to have you appointed as the Administrator.

What do I bring if the decedent dies without a Will? You must still go through the probate process. You will be required to bring:

A certified death certificate; Renunciations, if applicable, from parties not willing to serve as Administrator.

A list of the decedents assets and an approximate value of each.

You must provide the Make, Model and Vin number for any car in the decedents name alone

You must provide Bank Account information i.e. Bank name, Account number and most recent statement.

http://www.co.middlesex.nj.us/Surrogate/faq.asp

In most cases, a surety bond will be required in order to appoint an Administrator. The purpose of the bond is to protect all heirs and creditors of the estate. Pursuant to New Jersey statutes, N.J. S.A. 3B:15 15-1, the order of appointment includes a requirement that the Administrator post bond. The Surrogate sets the bond amount based on the total amount of the estate. The applicant may choose the insurance agency they wish to work with. The bonding agency usually requires an attorney to represent the estate to assure payment of the bond premium. The bond must be executed before the Administrator will be appointed. Once the estate is closed and all the debt has been paid and the money has been distributed, a Refunding Bond and Release must be filled out by every beneficiary of the estate, including the Administrator, in order to get released from the bond.
If the applicant qualifies as the Administrator, Letters of Administration and a short certificate will be issued by the Surrogate. A short certificate is the document the Administrator will use as proof of their authority to transfer or sell the decedents assets.

Source: http://www.co.gloucester.nj.us/depts/s/surrogate/services/admaffidavits.asp

What happens if I cant find the Original Will? If the original Will cannot be found, the next of kin to the deceased would come to the Surrogate Court to make application for Administration.

What is a Surety Bond and why do I need to get one? A surety bond is an insurance policy that protects the beneficiaries and creditors of the estate. Administrators are required by law to obtain a surety bond in order to be appointed.Executors may not be required to obtain a surety bond if the will waives that requirement.

How do I get a Bond released? The Administrator can be released from the surety bond in two ways:

Filing the original refunding bond and release forms from all beneficiaries with the Surrogate Court and stamped copies with the Insurance Company

With the approval of the Superior Court of a formal accounting of the estate 

Some of the Duties of the Administrator in 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;

Your attorney will not be able to file the NJ inheritance tax return until it is clear as to the amounts of the medical bills. Medical expenses can be deducted in the inheritance tax.

Under United States Supreme Court Case, Tulsa Professional Collection Services, Inc., v. Joanne Pope, Executrix of the Estate of H. Everett Pope, Jr., Deceased, the Administrator/ Personal Representative in every estate is personally responsible to provide actual notice to all known or readily ascertainable creditors of the decedent. This means that is your responsibility to diligently search for any readily ascertainable creditors.

Other duties/ Administrator to Do

Lets review the major duties involved-

In General. The Administrators 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. Lets take a look at some of the specific steps involved and what these responsibilities can mean. Chronological order of the various duties may vary.

Probate. 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 Administrator should also file a written notice with the IRS that he/she is serving as the fiduciary of the estate. This gives the Administrator the authority to deal with the IRS on the estates behalf.

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.

Manage the Estate. The Administrator 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 Administrator may have to liquidate or run a business or manage a securities portfolio. To sell marketable securities or real estate, the Administrator will have to obtain stock power, tax waivers, file affidavits, and so on.

Take Care of Tax Matters. The Adminstrator 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 Adminstrator can, in some cases be held personally liable for unpaid taxes of the estate. If they don't follow the law. 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 deceaseds final income tax return (federal and state). Taxes usually must be paid before other debts. In many instances, federal estate-tax returns are not needed as the size of the estate will be under the amount for which a federal estate-tax return is required. 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.

Distribute the Assets. After all debts and expenses have been paid, the Administrator will distribute the assets. Frequently, beneficiaries can receive partial distributions of their inheritance without having to wait for the closing of the estate. Under increasingly complex laws and rulings, particularly with respect to taxes, in larger estates an Administrator can be in charge for two or three years before the estate administration is completed. If the job is to be done without unnecessary cost and without causing undue hardship and delay for the beneficiaries of the estate, the Administrator should have an understanding of the many problems involved and an organization created for settling estates. The Administrator should retain an attorney experienced in estate administration.

http://www.njlaws.com/admin.html?id=5566&a=