When a loved one passes away, their estate is often left in the hands of a close relative or friend whom they trust, whom they’ve named as Executor under their Will. Many times, the person is a highly successful business owner or other professional. Balancing professional responsibilities with personal ones is a constant challenge, but adding this new role to your task list may quickly seem overwhelming. If you have found yourself in this situation, have no fear, as this article is tailored especially for you.

Disclaimer: The information provided is intended for informational purposes only and should not be construed as legal advice.

One critical aspect that often gets overlooked is estate planning, is the intricacies in the probate process. Probate can be complex, but with the right knowledge and legal guidance, you can ensure that your loved one’s estate is managed smoothly, reducing stress for you and the beneficiaries. This article contains many of the frequently asked questions we hear. Please take note that this article is based in New Jersey law and aims to clarify what probate is, why it matters, and what steps you can take to navigate it effectively. This list is not comprehensive and should not be acted upon without the guidance of a qualified estate administration attorney.

What is Probate?

Simply stated, probate is the legal process that occurs after a person passes away to validate their Last Will and Testament and officially appoint the Executor of their Estate. If the decedent did not have a Last Will and Testament (called “intestate” or “intestacy”), then this legal process is called “administration” instead of probate, and an Administrator, instead of an Executor, is appointed to manage the decedent’s estate. While the terms may differ, they are essentially the same process, so for simplicity, this article will refer to both as “probate” and the “executor” as the person appointed unless there is a marked difference. It is also important to know that the work an Executor or administrator does, from beginning to end, is called “Estate Administration” whether or not there is a will or no will.

How do you Probate the Will?

When there is a Will, it will be probated by the Surrogate Court in the county in which the Decedent lived when they passed away. The Surrogate Court is different than the Superior Court and, in some counties, is not located in the same building or city. Each Surrogate Court has its own specific procedures, but generally, they all require that an information questionnaire be completed and submitted along with the original will and an original death certificate. There will also be a fee to pay, which is based on how long the Will is and how many “certificates” you require (see next question).

If there is no Will, the process is similar, but the person who gets appointed as the Administrator is pre-determined by law, and sometimes there are additional legal documents that the heirs must sign to complete the appointment process. Further, the Administrator might be required to obtain a surety bond before they can be appointed, which requires the applicant to have good credit and costs an additional fee.

The process for both can be lengthy and time-consuming. Some of these tasks and time can be reduced or even eliminated when you hire an estate administration firm to assist and guide you.

How will people know I am the Executor?

Many people think that just because the Will says they are the Executor, they automatically get to act. However, the Executor named under the Will has no legal authority until they are appointed by the Surrogate Court. When the Will gets probated, the Surrogate Court will keep the original Will with the court and provide you with a copy of the Will stapled to a document called “Letters Testamentary” and several certificates, called “Executor Certificates,” “Administrator Certificates,” or some other variation of the same depending on what county you probate the Will in and whether the legal process is probate or administration. Some Surrogate Courts provide you with additional copies of the “Letters Testamentary” as your certificate. No matter what they are called, these certificates are the legal documents that prove you are the Executor (or Administrator) and have the authority under the law to act as such.

What do I do after I probate the Will?

There are many tasks that must be “checked off,” and some can be done simultaneously, but others must be done in a specific order.

1. Notice of Probate – After the Will is probated, a letter with specific information must be sent to all of the named beneficiaries under the will and any other heirs that would have inherited under the intestacy statues. This is called “Notice of Probate” and you must file proof with the Surrogate Court that the letter was sent to the required persons. This is not required for administration. An estate administration attorney can handle this entire task for you.

• Identifying Assets – Once appointed, you must first assess what assets the decedent had and where they are located. You will only be responsible for administering “probate” assets, which are assets that are in the decedent’s name alone that do not have any joint owners or designated beneficiaries; however, you may still need to be aware of those other assets, called “non-probate” assets, for tax reasons (see “Paying Debts and Taxes” below).  

• Moving Assets to the Estate – Now that you know where the probate assets are, you might need to remove the Decedent’s name from them and put them in the name of the Estate. You will not be allowed to write checks from the decedent’s bank accounts that are in their own name, only a bank account in the name of the Estate. Each company that the decedent owned assets with will have their own internal forms for you to complete, but beware as one form they might request is Form L-8, which is a legal affidavit signed by you affirming that there are no inheritance taxes due on these assets. Often an Executor unknowingly signs this form when there are taxes due, which can cause issues down the road. An estate attorney can assist you with determining which assets require these forms and can prepare and handle most of the transfer process for you.

For bank accounts and stock holdings, a new account will need to be opened in the name of the Estate before the assets can be transferred there. An attorney can help you determine where to open the Estate Account and how many accounts you need.

These new estate accounts are what you will use to pay debts and taxes and to distribute to the beneficiaries when the Estate Administration is complete.

• Paying Debts and Taxes: The decedent may have passed away with outstanding debts, such as property tax bills, utility bills, credit card debt, and others. You will need to settle these debts before any distribution can be made to the beneficiaries. Additionally, you will be responsible for filing and paying the decedent’s final income tax return (Form 1040) and the estate’s income tax forms for the years in which the Estate is open and earns income (Form 1041). Further, depending on who the beneficiaries of the Estate are, you might also be responsible for preparing, filing, and paying the tax due for any inheritance tax. This is a tax on whom the decedent gives their money to when they pass away; some classes of beneficiaries are taxable, and others are not. It is important to note that even if a non-probate asset is the only asset that passes to a taxable beneficiary, you, as the Executor, might still be required to file the return or pay the tax from the decedent’s assets. It is important to consult with an estate administration attorney to ensure that you are in compliance with these tax laws.

• Accounting and Distributing Assets: When all debts and taxes are settled, you might need to provide a formal or informal accounting to the beneficiaries. In certain circumstances, the beneficiaries can waive this requirement, but sometimes it cannot be avoided. Even if the beneficiaries waive the accounting, you must prepare a legal document called a “Refunding Bond and Release” for the beneficiary to sign before they receive their inheritance, which must be filed with the Surrogate Court. You must also perform a legal search to determine if the beneficiary owes child support in New Jersey, even if they have never lived in the State.  Once this is performed, and so long as the child support search returns clear, the remaining assets are distributed to the beneficiaries as specified in the Will or by law.

What Could Go Wrong If You Do It Yourself?

Without proper legal guidance, serving as an Executor can quickly become a minefield of stress and worry, with many pitfalls that can create personal liability (meaning that if a creditor, tax authority, or beneficiary sues, your personal assets could be at risk) and legal headaches. Some examples are:

• Missing important deadlines or failing to notify certain parties can lead to legal challenges and, in some cases, put you in the position of considering using your own funds towards estate or legal expenses. Without proper legal guidance, you might end up diminishing your own assets when there was no legal obligation to do so.

• Transferring, selling, or distributing assets without a clear understanding of probate laws can result in unintended consequences, such as disputes among beneficiaries, tax penalties, or even personal liability if assets are mishandled.

• Tax laws are complex, and even the slightest oversight can lead to significant interest and penalties. A late inheritance tax payment can result in up to a 10% interest charge. From inheritance taxes to the decedent’s final income tax return, there’s a lot to consider, and mistakes can be costly.

• Distributing assets without securing a properly prepared and signed “Refunding Bond and Release” from the beneficiaries can leave either the estate or you personally exposed to future claims or disputes, even after the estate has been settled.

• Incomplete or inaccurate record-keeping can result in disputes or court interventions, which are both time-consuming and costly.

• Legal terms can be confusing, and misinterpreting them can lead to mistakes that cost time and money. For example, signing Form L-8 affirming that no inheritance taxes are due without knowing all the implications can result in unexpected liabilities later on.

• Unintentionally Disinheriting Beneficiaries: If assets are distributed incorrectly or prematurely, you might inadvertently disinherit certain beneficiaries or create conflicts among them. An estate attorney ensures that the Will’s instructions or intestate laws are followed accurately.

How do I know if I should seek legal help?

The best way to determine if an estate administration law firm is right for you is by asking yourself the following questions:

• Do I truly understand the responsibilities and potential liabilities of being an Executor, or am I underestimating the complexity of this role?

• Am I prepared to navigate the potential legal disputes, tax complications, and creditor claims that might arise during the probate process?

• Do I have the time and resources to manage the estate administration effectively, or would it be wiser to seek professional assistance to avoid costly mistakes?

If you’re unsure about any of these questions, it’s time to consider the benefits of working with an experienced estate administration attorney. There is a common misconception that hiring an estate attorney will significantly increase costs or delay the process. In reality, an experienced attorney can save you time, reduce stress, and help you avoid costly errors. The process of probate and estate administration is intricate, time-consuming, and often overwhelming, especially if you’re already managing a busy career and personal life. Our experienced estate administration attorneys can guide you through every step, helping you avoid pitfalls, minimize stress, and protect both your interests and the estate’s assets.

Don’t let this important responsibility become a source of anxiety or uncertainty. Contact us today, and let us help you navigate this process smoothly, so you can fulfill your role as Executor