Probate

last-willBeing designated by a friend or a loved one as the Executor of his or her estate is an honor, but with that designation comes many responsibilities and legal risks.

The Executor’s work begins after the death of the testator (the person who made the Will).  The Executor is responsible for “settling” the estate which means that the Executor must:

  •  identify, gather and value all of the decedent’s assets;
  •  pay the decedent’s debts and expenses, including all federal and state taxes; and
  •  distribute to the correct beneficiaries whatever assets remain after all debts and expenses have been paid, in accordance with the terms of the Will.

While this short list makes the Executor’s job seem simple, the reality is that there are many difficult tasks involved in the process and the Executor, as a fiduciary, can be held personally liable for breaching his or her duties in administering the estate.

Before accepting the appointment as Executor you should educate yourself as to the responsibilities and carefully access whether you are able to perform the tasks required.   The Executor may hire professionals such as accountants, attorneys, appraisers and others to assist in the administration of the estate.

The article The other side of a will: Serving as executor to an estate by Shelly Schwartz, CNBC, October 3, 2015 provides a helpful discussion.

Getting Legal Help

Experienced Estate Planning and Probate Attorney, Elga A Goodman, can assist you in your role as an Executor. Contact us today at 973-841-5111.

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In our last post, we discussed problems that may arise if a person dies intestate (without leaving a Will).  In this post, we discuss the process for administering and distributing the assets of someone who dies intestate:

What you should know:

1. The Surrogate’s Court (in the county where the deceased resided) has judicial oversight over how the estate is administered.

2. Typically, upon an individual’s death, the surviving spouse, or, if there is no spouse, an adult child or other close relative petitions the Surrogate’s Court to be appointed administrator for the estate.  When no relative is willing to serve, or none is available, a non-family member may seek the appointment.

Note: If the spouse applies to serve as administrator, the other heirs are not required to give consent.  However, if someone other than the  spouse seeks to serve, then the other heirs must consent by completing “renunciation forms.”   If the heirs cannot agree on who should serve, then the court selects the administrator.

3. The administrator is responsible for collecting and preserving the assets, paying all outstanding bills, federal and state taxes, and funeral expenses, and distributing the remaining assets to the beneficiaries.

Note:  The administrator must post bond for a specified amount of money as determined by the court.  If the administrator fails to successfully fulfill his/her duties, then the bond will be used to offset the resulting financial damages or losses.

4. Because there is no Will, assets that would normally pass through a Will are distributed in accordance with the state’s “intestate succession” laws.  These laws designate the rightful heirs and specify the estate distribution amounts.

So, for example, if the deceased was married and

–  had children from this marriage only, the entire estate would go to the surviving spouse.

–  had children from this marriage and from a prior marriage, then the surviving spouse would receive the majority of the estate (over 50%) with the children inheriting everything else.

– had surviving parents, but no children, then the surviving spouse would receive the majority of the estate, with the parents inheriting everything else.

5.  Some assets are not bequeathed through a Will, and, therefore, are not subject to intestate succession laws.  For example, the deceased may have left the following:

-life insurance proceeds, IRAs, 401Ks, and other retirement accounts for which beneficiary designation forms were completed

– payable-on-death bank accounts

– property transferred to a living trust

– property owned jointly with someone else.

Such assets pass directly to the named beneficiaries or to the surviving co-owners.  In these cases, there is no ambiguity regarding who the beneficiaries are, or what they should inherit.

Getting Legal Help

Losing a loved one is hard enough.  But, when someone dies without a Will, identifying what must be done, and how to navigate through the courts, can be very stressful and confusing.  Experienced Estate Planning Attorney, Elga A. Goodman, can help you meet this challenge and successfully work through the process. Contact us today at 973-841-5111.

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A critical part of estate planning involves preparing your Will.  Doing so helps ensure that your estate will be distributed to your heirs according to your wishes. Unfortunately, many people neglect to prepare a Will.  The reasons are many.  But the bottom line is that once you’re gone, and there’s no Will, things get more complicated for your loved ones.  And, your estate will be distributed according to state law – not according to your wishes!

The following summarizes three issues that arise when a person dies “intestate” (i.e., without a Will).

1.  When a person dies and leaves a Will, the Executor named in the Will is responsible for managing the estate until it is closed out (i.e., all debts, funeral expenses, and taxes are paid, and estate assets are distributed to beneficiaries).  However, when someone dies intestatethe Surrogate’s Court assigns an “administrator” to take on this function.  Most often, the court will appoint a close relative to serve as administrator.  By neglecting to prepare your Will, you’ve given up your right to select the person you prefer to administer your estate.  You’ve placed that decision in the hands of the court.  And that may result in assorted family disputes that might have been avoided.

2.  If you die intestate, you’ve also given up your right to determine exactly who gets what.  The court will distribute your assets in accordance with the state’s “intestate succession” laws.  These laws determine who the rightful heirs are and what share of your estate each of them will receive.   Whether or not you would have selected all or some of these heirs, whether or not their respective shares are consistent with what you would have wanted is not considered by the court.  You gave up your rights and your beneficiaries may consequently suffer.   

3.  If you die intestate, your administrator will be required to post a bond for a specified amount of money as determined by the court.  The bond  serves as security.  If the administrator fails to successfully carry out his/her duties, then the bond will cover resulting damages or losses.  In many cases, the cost of the bond, which must be paid annually until the estate is closed, will be more than what it would have cost to prepare a Will.  And, the bond may pose significant financial hardships for the administrator.

Preparing your Will is the right way to go if you want your estate managed in accordance with your wishes.  You owe it to yourself and to your beneficiaries!

Getting Legal Help:

Experienced Estate Planning Attorney, Elga A. Goodman, can help you with all your estate planning needs.  Contact us today at 973-841-5111.

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Preparing a Will enables you to direct how and to whom your estate will be distributed once you’re gone.  Your estate is comprised of your 

  1. intangible personal property (including cash, IRA’s, 401Ks, bank accounts, insurance policies, etc.),
  2. real estate, and 
  3. “tangible personal property.” 

Many times people wish to be very specific regarding how their tangible personal property will be distributed among beneficiaries.  One option is to itemize such specific bequests in a Will.  Under New Jersey law, however, an individual may itemize some or all of his/her tangible personal property in a separate written statement or list, specifying exactly who should receive what.  This list may be revised by the testator (the person bequeathing his/her estate) as often as desired during his/her lifetime, and does not require an attorney, witnesses, or notarization.  So for example, while a parent may state in her Will that her estate should be equally divided between her two children, she may attach a statement specifying that

– the gold watch goes to her daughter and the stamp collection goes to her son.

or

– her pearls go to her favorite niece, Alice.

The term tangible personal property is generally understood to mean items that can be felt or touched.  Typical items include clothing, jewelry, art, musical instruments, writings, furnishings and other household goods.  Often, these items are of relatively little monetary value, but of great sentimental worth.  It is important to remember that if you are preparing a separate statement or list, it may only serve to distribute tangible personal property, not cash, securities, negotiable interests or services.

Sometimes, however, it isn’t clear whether or not an item falls under the definition of tangible personal property.   For example, is a collection of gold Krugerrand coins considered cash or tangible person property?  These coins are minted by the Republic of South Africa, and each coin contains exactly one ounce of gold.  Given the potential for error, it’s best to consult with an attorney.  If it’s determined to be cash, then the collection should be bequeathed through the Will, which you must sign along with two witnesses, and which must be notarized.  If it’s deemed to be tangible personal property, then you can just gift it via a separate list, without the need for witnesses or a notary.  And, you can change your mind about who will receive the coins as often as you like.  Just redo the list.

When doing your estate planning, you want to feel confident that the items you bequeath to specific people on a separate list are, in fact, tangible personal property.  You don’t want your bequests to result in disputes among your heirs or in court proceedings because the items were not gifted in a legally correct manner.  

Getting Legal Help:

Experienced Estate Planning Attorney, Elga A. Goodman, can help you with all your estate planning needs.  Contact us today at 973-841-5111.

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