PROBATE
Estate
Administration
Important Responsibilities
If you have ever
been named as executor or administrator of the estate of a deceased
person, you are well aware of the many responsibilities the personal
representative must assume. The process of administering an estate
involves collection of assets, payment of debts and inheritance taxes,
and distribution to the beneficiaries.
County
Surrogate
Probate
The
process of estate administration begins when the personal
representative appears at the
County
Surrogate
's
office ten days after the death of the decedent (deceased person). At
this time, the Surrogate requires the following:
- Death
Certificate
- Will
- Petition
for Letters of Administration (if there is not a Will)
- Estimated
Value of Estate Assets
- Proof of
Identification
- List of
Potential Beneficiaries, including:
- relationship
to decedent
- approximate
ages
- dates of
death
- Check for
Fees
Letters
Testamentary
A decedent is said
to have died testate if he/she left a valid Will. Upon receipt of all
of the above, the Will is probated and Letters Testamentary are issued
to the individual named in the Will as Executor of the Estate.
Letters of
Administration
A decedent is said
to have died intestate if he/she did not leave a Will. After the filing
of a Petition, the Surrogate will issue Letters of Administration to
the individual appointed by the Court to act Administrator of the
Estate.
Personal
Representative
The personal
representative, either the Executor or the Administrator, is now
responsible for the property of the estate. The personal representative
must:
- Keep the
property separate
- Exercise
prudent judgment in:
- preserving
the property
- selling the
property
- investing
the property
- Be
faithful to the interests of those to whom the property will ultimately
be distributed.
Stages of
Administration
There are six
stages of Estate Administration for which the Executor or Administrator
is responsible:
Order
to Limit Creditors
The first stage involves publishing a notice to creditors. When the
personal representative appears at the Surrogate's office, he/she
should specifically request an Order to Limit Creditors. This provides
that creditors of the estate must make claims within six months of the
date of the Order or their claims will be barred.
Inventory
The second step is to prepare an inventory of the assets of the estate.
This is generally done by making an informal listing of all of the
assets of the estate. The listing should be divided into the following
categories:
- Real
Estate
- Bank
accounts, CD's and/or Securities
- Personal
Property
Payment
of Debts and Expenses
Thirdly,
the personal
representative must manage the financial affairs of the estate
including the payment of debts and expenses. Another listing should be
made including:
- Debts of the
Decedent - due and unpaid prior to the date of death Expenses of the
Estate - anticipated for the next nine months In order to facilitate
proper accounting and recording of payments, the personal
representative should open an Estate
Checking account The Executor or
Administrator may withdraw up to one-half the balance of the accounts
in the name of the Decedent by presenting a Surrogate's Certificate and
the bank book. The bank will prepare a check made payable to the
estate. A copy of this check should be made and it should then be
deposited into the Estate Checking account. The balances left in the
decedent's accounts are only obtainable with a New Jersey Inheritance
Tax Waiver.
Inheritance
/ Estate Tax Return
Next, the personal
representative has the responsibility of filing an inheritance tax
return with the State in which the decedent lived, and possibly a Form
706, US Estate Tax Return, with the IRS. This return must be filed and
any taxes due must be paid within eight months of the date of death to
avoid interest penalties. More about
Tax Duties of the Executor.
Accounting
After the preceding
stages are completed, an accounting should be prepared reflecting all
financial transactions. An accounting is a statement showing the
following:
- Assets of the
Estate
- Income
from Assets
- Liquidation of
Assets
- Payments of
Debts/Expenses
- Interim
Distributions
- Remaining
Property
Distribution
Finally, the
personal representative must distribute the assets of the estate to the
beneficiaries in accordance with the will or the State Laws concerning
intestacy. Upon distribution, a Refunding Bond and Release should be
filed with the Surrogate's Court for each beneficiary. This releases
the personal representative from further responsibility for the estate.
CONCLUSION
The time to consult
an attorney is BEFORE you
assume any of the above responsibilities. An attorney will assist you
in each stage of probate to ensure that you have fulfilled all legal
requirements.
Probate FAQ's
- here are answers to some interesting questions
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