Many banks have strict policies regarding accounts that are subject to probate. They demand that the surrogate court provide “letters testamentary” before they’ll release a deceased person’s account to the executor/administrator. Many unknowing persons think that a death certificate and a Will alone be enough to gain access to the decedent’s account, especially if the Will says he or she receives all his/her assets. The bank will always say that is not sufficient. If a person does not name a beneficiary to an account making it payable to a person on death, then it must go through probate. If the parent had designated a beneficiary, it would be as simple as presenting the bank with a death certificate for the …
Don’t Blow It! You Can Still Make a Late and Inexpensive Portability Election to Eliminate and/or Reduce Future Estate Death Taxes
“Portability” (I’ll explain its definition later in the blog) allows the personal representative of an estate to preserve a deceased spouse’s unused federal estate and/or gift tax exemption amount for later use by the surviving spouse which may be applied against future gifts by the spouse and/or his or her federal taxable estate upon death. In order to preserve portability, a personal representative is required to make an election on a timely filed IRS Form 706, following the death of the first spouse. If Form 706 is not filed within nine months of a decedent’s death or within 15 months if a request for an extension of time to file the return was timely obtained, a personal representative may be …
A Legal Guardian Can Create a Trust for the Benefit of a Minor Child
Question A parent dies with a large estate and leaves behind a minor child(ren). The decedent was divorced when he/she died. How can the surviving parent, if appointed legal guardian, protect the child’s estate from wasteful decisions and actions. The Law The guardian statute(s) provide procedure for setting up a trust on behalf of a minor child. Codified at N.J.S.A. §3B:12-54.1, a parent or guardian may apply to the Superior Court, Chancery Division, Probate Part to get permission to set up a protective trust for the benefit of a minor child or children when they would otherwise be receiving assets from an intestate estate when they are under 18 years of age. The application to the Surrogate’s Office can be …
Creditors of an Estate Can Sue Beneficiaries and the Executor if the Debt is Not Paid
A creditor of a deceased person is allowed to file a claim against an estate if his/her claim is timely filed with the surrogate’s office before an order barring creditors is made. But what happens if they fail to do this? Well, an option is for that creditor to chase any and all assets distributed to the beneficiaries by the estate representative. Our Chancery court has the jurisdiction to order the executor to produce a refunding bond from the beneficiary and if they fail to do so the creditor can sue both the beneficiary and the executor for the value of their unpaid claim. The law is as follows on the proper closing of an estate and payment to creditors. …
The Ins and Outs of a Lawsuit Because of the Wrongful Death of a Person
By Fredrick P. Niemann, Esq. of Hanlon, Niemann & Wright, a Freehold Township, Monmouth County, New Jersey Estate Administration Attorney When a person dies because of someone else’s intentional or negligent conduct, a lawsuit often follows: This type of legal claim is called a “Wrongful Death Action” N.J.S.A. § 2A:31-l sets forth when an action for wrongful death exists. Specifically, a cause of action for wrongful death exists when a person’s death is caused by a wrongful act, neglect, or default, such that the· person injured would have been entitled to maintain an action for damages resulting from the injury if death had not ensued. The estate representative has a two-year statute of limitations for a wrongful death action following …
What If the Estate Is Broke? Who Gets Paid First? Understanding the Priority of Unpaid Claims in Estate Administration
By Fredrick P. Niemann, Esq. of Hanlon Niemann & Wright, a Freehold Township, Monmouth County, NJ Estate & Probate Administration Attorney What if estate assets are insufficient to pay all the claims that need to be paid in full? What is the personal representative of the estate to do? Well he/she is required to pay claims in the following order: (Please note that this order is non-negotiable so read it closely). Reasonable funeral expenses; Administration costs and expenses; Debts and taxes with preference under Federal law or the laws of New Jersey, including debts for the reasonable value of services rendered to the decedent by the Office of the Public Guardian for Elderly Adults; Reasonable medical and hospital expenses associated …
Understanding What Posting a Bond Means When Administering an Estate
By Fredrick P. Niemann, Esq. of Hanlon Niemann & Wright, a Freehold Township, Monmouth County, NJ Estate & Probate Administration Attorney Many individuals when faced with probating an estate are required to post a bond but few really understand what this means or what is involved. Let me explain the process to you in this blog. As a general rule a court or surrogate will require that a fiduciary post a bond to protect against theft, embezzlement, fraud etc. and to ensure him or her diligently performs of his/her statutory responsibility to the estate or trust. This law also sets forth other circumstances when posting a bond is warranted. These circumstances include: When any written instrument creates a fiduciary relationship …
An Insolvent Estate Escapes Responsibility for Funeral Expenses After Receiving Millions of Dollars
By Fredrick P. Niemann, Esq., a Freehold Township, Monmouth County NJ Estate & Probate Administration Attorney In this case an action was filed by a funeral director against decedent’s representative, and others, to recover the balance of his bill for services rendered at the funeral of decedent. The Superior Court, Appellate Division, held that money received by decedent’s representative in settlement of suit for decedent’s wrongful death did not become an asset of decedent’s estate and hence was not available for payment of funeral or burial expenses although the assets of decedent’s estate were practically nonexistent. The Background of the Case The plaintiff, a funeral director, brought suit to recover $960.34, representing the balance of his bill for services rendered …
How Long Does an Executor/Administrator Have to Pay Creditors of an Estate
By Fredrick P. Niemann, Esq. of Hanlon Niemann & Wright, a Freehold Township, Monmouth County NJ Estate and Probate Administration Attorney I get asked often how much time an estate fiduciary has to pay the bills of a decedent. The answer is generally straightforward but has a few twists. If a creditor isn’t presented within nine months of the decedent’s death, the law states that “the personal representative shall not be liable to the creditor with respect to any assets which the personal representative may have delivered or paid in satisfaction of any lawful claims, devises or distributive shares, before the presentation of the claim.” N.J.S.A. Section3B:22-4. Now that doesn’t mean the creditor is screwed. A creditor can still file …
Disputes as to Administration of the Estate
By Fredrick P. Niemann, Esq. of Hanlon Niemann & Wright, a Freehold Township, Monmouth County, New Jersey Estate and Probate Dispute Attorney Sometimes deputes occur concerning who will administer an estate. In such cases, when there is a dispute the decision rests in the court’s discretion, but several standards apply nonetheless. Where the decedent dies intestate (meaning without a last will), the statutes define the priority for the appointment of an administrator of the estate. N.J.S.A. § 3B:10-2 sets forth an order of priority for those eligible to receive letters of administration the statue reads: If any person dies intestate, administration of the intestate’s estate shall be granted to the surviving spouse of the intestate, if he or she will …