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Intestate Succession
When no Will exists, Real and Personal
property is not distributed according to
the decedent person's desires. Rather, it
is distributed according to the statutes of
New Jersey.
How will your property be divided if
you have no Will? If you die without
leaving a Will and are a resident of New
Jersey, the State law provides the
manner for distributing your property.
Your net estate remaining after deduction
of debts, taxes, family exemptions, etc.,
would be distributed under the Statutes
governing Decedent's Estates and, in the
case of most common occurrence, the heirs
who would receive such property are as
follows:
Property owned jointly by husband
and wife is automatically owned by the
survivor. The following charts show the
distribution of separately owned property.
(Revised February 27, 2005) according to
the Middlesex County Surrogate, Seehttp://www.co.middlesex.nj.us
/surrogate/yourwill.asp#dyi
The Chart below shows how an Estate
is distributed in New Jersey if you do
not leave a Will.
For more information go to
http://njwillsprobatelaw.com/
dying_without_a_will.html?id
=356&a=
IF YOU DIE LEAVING:
| Survivors (Heirs) | New (2004)
UPC |
| Spouse and parent(s), but no children | Spouse:
the first 25%
(but not less
than $50,000
nor more
than
$200,000)
plus three
fourths
of the
balance
Parent(s):
All other
estate assets |
| Spouse and children of Decedent, all of whom are also children of spouse (and spouse has no children by any other relationship) | Spouse:
100% of
estate
Children:
nothing |
| Spouse and children of Decedent, some of whom are not children of spouse | Spouse:
the first 25%
(but not
less than
$50,000
nor more
than
$200,000)
plus
one half
of the
balance
Children of
the Decedent:
all other
estate assets |
| Spouse and children of Decedent, all of whom are also children of spouse (and spouse has children by another relationship) | Spouse: the first
25% (but
not less than
$50,000 nor
more than
$200,000)
plus one half
of the balance
Children of
the Decedent:
all other
estate assets |
| Spouse and stepchildren (children of spouse who are not Decedent's children) | Spouse:
100% of estate
Stepchildren:
nothing |
| Children of spouse (stepchildren), but no descendants, parents, descendants of parents or descendants of grandparents | Stepchildren:
100% of estate |
Note: shares of predeceased children pass
to descendants by representation. The new
rules on intestacy say that the decedents
inherit "per capita, by generation" rather
than "per stirpes." Source: http://www.co.middlesex.nj.us/surrogate/
yourwill.asp#dyi
However, the State of New Jersey takes
your property if you leave no wife or
husband; child or its descendants; parent;
brother or sister or their descendants;
grandparent; or uncle or aunt or their
children; or their grandchildren or
stepchildren.
NOTE: Any person who fails to survive
the decedent by 120 hours is deemed to
have predeceased the decedent for
purposes of intestate succession.
APPOINTMENT OF
ADMINISTRATOR OR
PERSONAL REPRESENTATIVE
When there is no Will, an administrator,
administratrix, or personal representative
is appointed by the Court. Any close
relative may be appointed.
For an individual or a bank to be appointed
administrator or personal representative, all
other heirs must renounce their rights. In most
cases, a surety bond must be furnished by
paying a premium to a surety company for
signing this bond.
If all heirs cannot agree on who will serve
as an administrator, then the heir requesting
to be appointed as administrator must have
their attorney file a Complaint and Order to
Show Cause to request the court appoint
you as administrator.
MINIMUM DUTIES OF
ADMINISTRATOR
ACCORDING TO THE MIDDLESEX
COUNTY SURROGATE WEBSITE,
THERE ARE MANY
RESPONSIBILITIES OF THE
ADMINISTRATOR, See http://www.co.middlesex.nj.us/surrogate/
yourwill.asp#dyi
1 The Administrator of an intestate estate
(no Will) is obligated to notify the Attorney
General of the State of New Jersey, in the
event that there are no surviving heirs. In
this case, the net proceeds of the estate
would escheat to the State of New Jersey.
2. The Administrator is responsible for
determining and marshaling all assets of
the estate. An estate checking account is
opened from which bills are paid. It may
be necessary to secure a Federal ID
number for the estate. You can call the
IRS AT 800-829-1040 for an ID number.
3. The Administrator is responsible for
all debts, last illness expenses, inheritance
and estate taxes, and administrative
expenses from the decedent's assets.
4. The Administrator is responsible for
filing appropriate State and Federal tax
forms as applicable, and forwarding any
tax payments due.
5. The Administrator is entitled to a
commission of 5% of the value of the
gross estate (for estates up to $200,000.00)
and 6% on income if they handle the estate
properly.
6. The Administrator shall prepare an
accounting of the estate assets and
disbursements and proposed distribution,
which accounting may be proved informally
by each beneficiary/heir acknowledging his
approval of same. In the alternative, the Superior
Court of New Jersey approves a Formal
Accounting. Filing fee for the Informal
Accounting is $5.00 per page.
7. The Executor has the obligation to distribute
the net estate in a timely manner, in accordance
with the terms of the will. The Administrator
distributes in accordance with the intestate laws
of the State of New Jersey. A copy of the relevant
New Jersey Statutes is available at the Law Library,
which is located on the second floor of the
Middlesex County Courthouse.
8. Prior to the distribution, each beneficiary
shall execute a Refunding Bond and Release.
Upon receipt of the executed document, the
Administrator issues payment. The original
refunding Bonds and Releases are filed with
the Surrogate. The filing fee is $5.00 per page.
9. The Administrator is required by NJ law to
initiate a child support enforcement order for
any beneficiary receiving in excess of $2,000.00,
prior to distribution of any money to the
beneficiary. The search should be conducted
by a private judgment search company that will
verify results.
ADMINISTRATOR OF A PROBATE
ESTATE- OTHER DUTIES AND
RESPONSIBILITIES
The procedures in an Estate Administration may
take from six months to several years, and a
client’s patience may be sorely tried during
this time. However, it has been our experience
that clients who are forewarned have a much
higher tolerance level for the slowly turning
wheels of justice.
Some of the Duties of the Administrator in
Probate Estate Administration
1. Conduct a thorough search of the
decedent's personal papers and effects for any
evidence which might point you in the direction
of a potential creditor;
2. Carefully examine the decedent's 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
Let's review the major duties involved-
In General. The administrator'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). 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.
Probate. An employer identification number
("EIN") must 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 estate's behalf.
Pay the Debts. The claims of the estate's
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
administrator 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 administrator 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 estate's 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.
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.
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.
At some point in time, you may be asked to
serve as the administrator of the estate of a
relative or friend, or you may ask someone to
serve as your administrator. An administrator's
job comes with many legal obligations.
Under certain circumstances, an administrator
can even be held personally liable for unpaid
estate taxes.
Distribute the Assets. After all debts and
expenses have been paid, the distribute the
assets with extra attention and meticulous
bookkeeping by the administrator.
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. |
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