Probate is a legal process supervised by a court that may or may not be required when someone passes away. Probate allows a spouse or other close relative to essentially wrap up a person’s estate after their death. Estates valued at under $20,000 or those with no will may qualify for a simplified, informal probate process.

When Is Probate Required?

Probate court proceedings are usually required only if the deceased person owned assets in their name alone. If an asset is owned jointly by two or more people, probate is unnecessary because it automatically goes to the surviving owner.

In addition, estates that are part of a living trust do not have to go through probate, nor do assets with a named beneficiary. These are considered non-probate assets and include the following:

  • Assets the deceased person owned with someone else in joint tenancy or tenancy by the entirety. These could include real estate, vehicles, and bank accounts. Joint assets pass automatically to the surviving owner.
  • Assets that have a named beneficiary outside of the will. Typical examples are IRAs, 401(k)s, and other investments that have a named beneficiary attached to them. Payable-on-death (POD) bank accounts are also included in this category.
  • Life insurance proceeds or pension benefits that are payable to a named beneficiary.
  • Assets that are held in a revocable living trust. These often include homes and investment accounts as well as small businesses or partnership shares.

What Is the Regular Probate Process?

Probate in New Jersey is handled by the surrogate court in the county in which the deceased person resided. The process will often take less than a year, depending on the circumstances. The following are the steps when probate is necessary.

Executor or Administrator Appointment

The person named as an executor in the decedent’s will must, 10 or more days after death, request the surrogate court to formally appoint them as executor. They will need to provide the will and a certified copy of the death certificate if the will is not self-proving.

A self-proving affidavit is a sworn statement attached to a will that is signed by the will maker and witnesses. It attests to the validity of the will. Although not required, it can help the probate process go quicker.

If the will is not self-proving, one of the two witnesses who saw the deceased person sign it and signed it themselves must appear in court as well, or they can submit a sworn statement.

If there is no will or the executor cannot serve, the probate court will appoint an administrator instead. The administrator does the same job as the executor.

In New Jersey, a surviving spouse or domestic partner has first priority to be named as administrator.

If an executor or administrator does not live in New Jersey, they must post a bond unless the will dictates it is not necessary. The bond is an insurance policy that protects the estate from mismanagement or theft by the executor or administrator.

Executor or Administrator Duties

Once an executor or administrator is approved or appointed, the court issues a letter giving this person the responsibility and authority to:

  • Gather, inventory, and protect the deceased person’s assets.
  • Order professional appraisals if needed.
  • Pay applicable debts and taxes.
  • Distribute the assets remaining as the will or state law dictates.

Notification to Heirs

After a will is admitted to probate, the executor or administrator must, within 60 days, mail a notice of the proceeding to all heirs and beneficiaries. Heirs are people who will inherit assets under the law when there is no will, whereas a beneficiary is named in the will.

This notification serves as a formal announcement that a person will be receiving assets from the estate, and the probate process has begun.

What Are the Prime Responsibilities of an Executor/Administrator?

The following are the four primary responsibilities of an executor/administrator.

Collect Assets

The executor/administrator will generally open a bank account for the estate and consolidate cash accounts. They will also deposit any future payments to the decedent into this account and use it to pay estate expenses.

The executor/administrator must account for and manage all assets that go through probate. These could include vehicles, real estate, bank and brokerage accounts, jewelry, artwork, collections, and other personal property. Life insurance with no named beneficiary is also a probate asset.

The executor/administrator will keep detailed asset management and distribution records, including bills, receipts, and bank statements the court may require. Before the estate can be closed, the executor will need to submit a formal accounting of assets, disbursements of estate money, and the proposed distribution to those who will inherit assets. If beneficiaries approve the accounting, the court does not need to approve it formally.

Pay Debts and Taxes

The executor/administrator must also pay the valid expenses and debts of the estate. They will publish a notice in a newspaper or send written communications to creditors that they must come forward with their claims. They can ask the court for an Order Limiting Creditors, which means any creditor must come forward within nine months with their claims. This helps stop creditors from trying to collect debts years later.

If the estate does not have sufficient assets to pay all debts, state law will prioritize payments. Family is paid first. The surviving spouse and children under 18 years old may receive a year of financial support. After that are funeral expenses, probate costs, taxes, and expenses related to the last illness, in that order. The order continues, so consult with a lawyer for more information.

It is important to note that final state and federal tax returns must be filed along with income taxes for the estate if it received income. Also, a federal estate tax applies to estates larger than $11.7 million, which is a value subject to change.

There is also an inheritance tax in New Jersey, which is valued by who inherits the assets. Distant relatives and unrelated inheritors pay a higher rate than close family members.

Distribute Property/Assets

When debts and taxes are paid, the executor/administrator can distribute assets to inheritors. By law, they must check that an inheritor does not owe back child support.

Property is distributed according to the will or law if there is no will. The law dictates that the decedent’s closest relatives inherit their assets according to a prescribed order of priority.

Close the Estate

Once all debts are paid, taxes are filed, and assets are distributed, the court will relieve the executor/administrator of their duties.

An executor/administrator is entitled to compensation, called a commission, for their work. The commission is six percent of income received by the estate plus five percent of the gross estate’s value up to $200,000, three and one-half percent on the excess above $200,000 up to $1 million, and two percent on the excess above $1 million.

What Is Simplified Probate?

If the deceased person did not leave a will or a lot of valuable property/assets, surviving family members might use the simplified probate procedure. They qualify for this quicker and less expensive probate if one of the following occurs:

  • The value of all assets does not exceed $20,000, and the surviving spouse or domestic partner is entitled to all of it without probate.
  • There is no surviving spouse or domestic partner, and the value of all assets does not exceed $20,000. With the written consent of the others, one heir can file an affidavit, a sworn statement, with the court and receive all assets.

How Can I Avoid Probate?

Planning is the best way to avoid probate, and a lawyer can help you do that.

Putting all assets into a revocable living trust ensures that the assets will go to the beneficiary when the person dies without going through probate. In addition, adding a named beneficiary to bank accounts, life insurance policies, retirement accounts, and other assets can also help your heirs avoid probate.

Estate planning is the best way to ensure your estate assets will go where you intended them to go and that your heirs are not saddled with probate. A good estate plan will provide peace of mind as well.

New Jersey Wills, Trusts, and Estates Lawyers at Herold Law Can Help With Probate Issues

The key to distributing assets as you wish is planning. Our New Jersey wills, trusts, and estates lawyers at Herold Law, P.A. can help your loved ones avoid the hassle, expense, and time commitment of probate. Call us today at 908-647-1022 or contact us online for an initial consultation. Located in Warren, New Jersey, we serve clients throughout the state.