New Jersey Estate Planning and Probate FAQs: Everything You Need to Know

Probate in New Jersey refers to the process where the State of New Jersey recognizes the executor or administrator as the estate’s official representative. When someone dies, ownership of all assets in that person’s name will now pass to someone else. The Probate Process provides the rules and oversight of that process. For a New Jersey estate, the initial step is to have the Will recognized as valid by the Surrogate of the county where the deceased was a resident. For example, if the deceased was a resident of Camden County, the will is filed with the Camden County Surrogate. If there is no will, then the process begins with the selection of the person who will serve as the Administrator of the estate. If the Surrogate accepts the petition for probate, then the paperwork is given to the executor or administrator authorizing them to represent the estate. Probate has begun.

In the State of New Jersey, the person who determines the validity of wills in undisputed matters and appoints personal representatives to administer estates is called the Surrogate. Each county has a Surrogate’s Court, and the Surrogate is the Judge at that court. The Surrogate is a constitutional official elected for a five-year term and considered part of the judicial system.

Besides being responsible for probating wills, the Surrogate supervises certain minors’ funds, serves as the deputy clerk of the Superior Court of New Jersey for adoptions and all probate matters, appoints guardians for minors, and supervises and prepares files for adoptions, incompetency hearings and all contested and uncontested probate matters.

To review a list of all New Jersey Surrogate contacts, CLICK HERE.

The will is registered with the Surrogate of the county that the deceased was a resident. For example, if the deceased died a Burlington County resident the will is probated with the Burlington County Surrogate.

The probate procedure is commenced by the Executor or Executrix or Personal Representative producing the original Will for probate at the Surrogate’s office, along with a copy of the certified death certificate, a list of all the next of kin of the decedent along with their relationship, addresses and ages if minors, and if the Will is not self-proving, at least one witness who signed the Will to prove the signature on the Will.

If the Will is kept in the lawyer’s fire proof files, the Executor need only call the attorney to obtain the Will. If the Will was kept in a safe deposit box, after the death of the Testator/Testatrix, the Executor or Executrix or Personal Representative is allowed to remove the original Will, the deed to the cemetery plot and certain life insurance policies from the decedent’s safe deposit box before probate in the presence of a bank officer and without the presence of a representative of the Inheritance Tax Bureau.

This is a legal document issued by the surrogate’s office that the Executor or Executrix or Personal Representative uses as proof of his authority to transfer or sell assets of the deceased.

The number of Surrogate’s Short Certificates you will need varies depending on the number of assets in the decedent’s name alone, i.e., bank accounts, automobiles, stocks, bonds, etc.

Within 60 days after the date of the probate of the Will, the Executor or Executrix or Personal Representative must mail to all beneficiaries under the Will and to all persons who would inherit if there were no Will, at their last known addresses, a notice in writing that the Will has been probated, the place and date of probate, the name and address of the Executor, Executrix or Personal Representative and a statement that a copy of the Will will be furnished upon request. If the names or addresses of any of those persons are unknown, or cannot by reasonable inquiry be learned, then notice of probate of the Will should be published in a newspaper in the county naming those persons having a possible interest in the probate estate.

An Executor or Executrix or Personal Representative is entitled to compensation based on several factors. For more details, read our Article on Personal Representative Fees in New Jersey.

The Executor or Executrix or Personal Representative may, in most cases, withdraw up to one-half of the funds in the decedent’s New Jersey bank accounts upon presentation of a Surrogate’s (Short) Certificate. The Executor or Executrix or Personal Representative should place these funds into an Estate checking account that can be used to receive and distribute funds on behalf of the Estate.

Real estate owned jointly by husband and wife in the form of ownership legally known as “Tenancy by the Entirety” is not controlled by the Will of the spouse who dies first. Absolute ownership of the property will pass to the surviving spouse who has the rights of survivorship, regardless of what the Will may provide.

If two or more persons other than husband or wife own real estate together, each owns an undivided share as “tenants in common,” unless the deed states they are to own “as a joint tenant” and not as tenants in common. With exceptions, real estate held in joint tenancy goes to the surviving joint owners when one joint owner dies. An interest in real estate owned by tenants in common passes to the heirs of the deceased.

Certain bank accounts and certificates may be owned by husband and wife with rights or survivorship, which means that upon the death of one party to the account, the surviving spouse becomes the sole owner. The account does not pass through the decedent’s estate. The surviving spouse, by filling out and “Affidavit of Waiver” (form L-8), is allowed to transfer the jointly held accounts to his or her name. The Affidavit of Waiver is available from the bank.

A life insurance policy is a contract between the policyholder and the company. The proceeds are paid according to the terms of each contract.

Life is insurance can be payable specifically to a designated beneficiary or a trust or your estate. A contingent beneficiary should be named as well as a primary beneficiary in case of simultaneous death of both the policyholder and the beneficiary, of if the beneficiary dies first. Without a contingent beneficiary, life insurance passes to the estate and is subject to New Jersey Inheritance Tax and the Executor’s or Executrix’s or Personal Representative’s commission.

The decision on designation of the beneficiary can be quite significant, and you may wish to consult your attorney to find out the pros and cons to the available choices.

It may be advisable for the Executor or Executrix or Personal Administrator to obtain an order requiring creditors of the decedent to present their claims within six (6) months from the time of the order. This order is published by the Surrogate. An Executor or Executrix or Personal Representative may then act in reliance upon the belief that all creditors have presented claims within that period.

If claims are made, the Executor or Executrix or Personal Representative does not have to automatically accept the claims but can dispute them and has three months to make any decisions.

A formal accounting is a complex breakdown of all assets, disbursements, distributions, fees and commissions prepared by an attorney. In New Jersey, most estates are settled without having formal court accountings. Instead the Executor or Executrix or Personal Representative obtains a Release and Refunding Bond (the written agreement and consent of all beneficiaries dispensing with a formal accounting, approving the actions of the Executor or Executrix or Personal Representative, the amount and manner of the distribution and releasing the Executor or Executrix or Personal Representative from further liability) from each person taking a share as provided in the Will. The refunding bond is then forwarded to the Surrogate for filing and recording.

No, although New Jersey is one of several states to enact the Uniform Probate Code, most states have their probate laws. It is a good idea to have your Will checked by an attorney when you move to another state.

Our experienced Probate teams can make arrangements for you to be sworn in as executor outside of New Jersey. In most cases, we can make arrangements so that you will never have to come to New Jersey at all. Because we focus our practice on Probate matters, we can contribute to making the probate process as easy for you as possible.

There is no set time limit for an estate’s probate. As explained below, I often tell executors to tell the heirs that the estate will be open for at least a year, but we can often close the estate earlier (making the executor look good). The actual time the estate will be open will depend upon the estate’s assets and the taxes that need be paid. New Jersey’s Probate system is efficient, but there are certain steps over which you have no control. For example, certain tax returns need be filed, and the forms might not even be available until the year following the death. The estate might contain hard to sell assets, such as an art collection or real estate, so the estate will have to stay open until the assets are sold. For a more detailed estimate, feel free to contact us with the details of your estate. Here are a few common examples of tasks that will force an estate to stay open longer than others:

The deceased’s final income tax return. If the deceased lived even one day into the year, you might have to file his or her final income tax return. In New Jersey, this will mean at a minimum filing a final 1040 to the IRS, a final NJ40 to the New Jersey Department of the Treasury, and perhaps other returns to local taxing authorities, such as the local school tax. You may not be able to file these returns until the year following the death.

New Jersey Inheritance Tax Return. These returns are due nine months after the date of death, and it can easily take that long to gather together the necessary information to complete the return. Once filed, it can take four months to get a response from the New Jersey Department of the Treasury.

The Estate’s Income Tax Return: If the estate creates income, then the estate must file a Form 1041 Return with the IRS and an NJ41 with the New Jersey Department of the Treasury. Once filed, it can take months to determine if the return has been accepted as filed.

Sale of Real Estate: If the estate has real estate, preparing the property for sale, marketing the property and then closing the sale can take well over six months. Specialized property, such as commercial property or a farm can take even longer.

Creditor Claims: Creditors of a New Jersey estate can bring their claims for eight months. If the executor releases the estate’s funds to beneficiaries, and a legitimate creditor is discovered, the executor might be personally liable to the creditor if the estate funds cannot be recovered from the beneficiaries. Most executors find it wise to hold the estate assets until the date for creditor claims has passed.

Once a probate petition is accepted, the executor’s or administrator’s job is to gather all the assets, pay creditors, satisfy all income/inheritance/estate taxes, and then distribute the remaining assets as the Will directs. Each estate is different, and the amount of work and responsibility may vary. The estate’s location will also effect the personal representative’s responsibility. A Gloucester County estate must make certain reports to the Gloucester County Surrogate, which differ from for the reporting for a Palm Beach County estate’s reports to the Palm Beach County Surrogate. Strangely, even within a state, the various reporting standards may differ.

A Probate Attorney versed in the rules of New Jersey probate can advise the executor on these reports. In the end, before distributing any funds, the executor should submit a report of what has been done to the beneficiaries and obtain a complete release of liability. Without this release, the executor can be forced to return to court years later and account.

As New Jersey Probate Attorneys, we regularly represent executors, administrators, and personal representatives and guide them through the probate process. We work with you to analyze your particular estate and advise you of what options exist to bring the estate to a close.

The Surrogate does not have authority to probate a Will which is contested or contains any doubt or difficulty on its face. In such a case, the Surrogate will inform the nominated Executor, Executrix or Personal Representative that it will be necessary to apply to the Superior Court of New Jersey to seek a judgment to allow the Will to be admitted to probate. This procedure normally involves a formal hearing before a Judge of the Superior Court. If it is ultimately determined that the Will was not executed by the statutory requirements for a valid Will, the Will may be denied probate.

An executor’s accounting is the report of the executor’s financial actions from the date the executor began serving until the end. It shows what was collected, what happened to those assets, any gain or losses on those assets and, in the Schedule of Distributions, how the executor plans to distribute the assets to the beneficiaries. In New Jersey, these accountings can either be informal, or they are formal accountings filed in the Surrogate’s Court.

The executor should always obtain a release of liability from the heirs. The heirs, though, will often not wish to release the executor unless the executor can “account” for all the assets of the estate and explain all the expense incurred. To satisfy the heirs, the executor will need to provide an “accounting” of the assets and expenses. If the heirs are satisfied with the accounting, then they will sign the releases freeing the executor from liability.

In New Jersey, the heirs can force the executor to account by filing a Petition for Accounting with the Surrogate’s Court. If they satisfy the judge, an order to account is issued.

If the numbers do not add up, the executor may be found personally responsible for any shortfall. The court can “surcharge” the executor for the difference.

When filing an accounting, the Court requires the account to follow a specific format. The accounting must also be submitted with a specific petition. Further, accountings and the accompanying petitions may vary from County to County within New Jersey. An experienced Probate Attorney who focuses in accountings is familiar with these differences. It is better to provide the Court a Petition in the correct format, rather than having the judge find it incomplete and order the Petition refilled.

At times an executor may refuse to provide a beneficiary with an acceptable accounting. The Surrogate’s Court has created a system that allows a beneficiary to force the executor to provide an accounting. Our firm has been forcing executors to file Accountings for over 20 years and, once the accounting is obtained, our background in estate planning and tax allows us to help you interpret the accounting and search out discrepancies for your objections.

It is important that all tax returns are filed correctly and in a timely fashion. The Executor or Administrator is Personally Liable for errors that harm the beneficiaries. Filing a late tax return means interest and penalties for which the executor may be personally liable. When an executor hires a Probate Attorney that lawyer’s primary job is to advise and protect the executor. Probate Lawyers are well versed in preparing all estate related tax returns and can help make sure all returns are filed correctly and timely. In New Jersey an executor may have to file the following returns:

• The Deceased’s final Form 1040 (Income tax)
• The Deceased’s final Form NJ-1040 (Income tax)
• New Jersey Inheritance Tax
• New Jersey Estate Tax
• The Form 1041 (Estate’s income tax)
• The Form NJ-1041 (Estate’s PA income tax)
• The Form 709 (Gift Tax)
• School Tax (Income Tax)
• Payroll Taxes
• Specialized Taxes that the Deceased’s business might owe.

If you have the original will and an original death certificate, our firm can set up a process where you are sworn in as executor in your home county. There is no “reading of the will” required, so for most estates our clients never have to come to New Jersey.

Inheritance tax is tax payable by an heir or beneficiary for the right to acquire the property of a deceased person or to receive a gift in anticipation of death. The tax is determined by the amount inherited and by the relationship of the individual to the deceased.

Currently, the law imposes a graduated inheritance or succession tax ranging from 11% to 16% on the real or personal property with a value of $500.00 or more to certain beneficiaries.

Effective January 1, 1985, there is no tax imposed for transfer to a husband or wife.

Inheritance tax law recognizes five beneficiary classes ranging from “A” to “E” as follows:

Class “A” – effective July 1, 1988, no taxes will be imposed on the following: father, mother, wife, husband, grandparents, child or children of the decedent, adopted child or children of decedent, issue of any child or legally adopted child of decedent, mutually acknowledged child or stepchild.

Class “B” – Deleted by amendment 7/1/63

Class “C” – Brother or sister of decedent, wife or widow of a son of decedent, or husband or widower of a daughter of decedent

Rate:

• First $25,000 No Tax
• Next $1,075,000 @ 11%
• Next $300,000 @ 13%
• Next $300,000 @ 14%
• Next $1,700,000 @ 16%

Class “D” – Every other transferee, distributee or beneficiary not herein classified.

Rate:

• First $700,000 @ 15%
• Over $700,000 @ 16%

Class “E” – Transfers to the State of New Jersey or any of its political subdivisions for public or charitable purposes, and educational institution, church, hospital, orphan asylum, public library and certain other nonprofit agencies, etc.

Rate: Totally exempt

For rates applicable to estates of decedents who died before July 1, 1988, contact the Transfer Inheritance and Estate Tax office in Trenton at (609) 292-5033 / 5035 / 7147.

How soon must New Jersey Inheritance taxes be paid?+

State Inheritance Tax returns must be filed and the tax paid on the transfer of real or personal property within (8) months after the decedent’s death on either:

1. A resident decedent for the transfer of real or tangible personal property located in New Jersey or intangible personal property wherever situated, or
2. A nonresident decedent for the transfer of real or tangible personal property located in New Jersey. No tax is imposed on nonresident decedents for intangible personal property wherever located.

A return must be filed whenever any tax is due or when benefits are passing to other then Class “A” beneficiaries.

Are there other exemptions in New Jersey?

In addition to the exemptions listed under “Beneficiary Classes and Tax Rates,” no tax is imposed on:

• Transfers having an aggregate value of less than $500;
• Life insurance proceeds paid to a named beneficiary;
• Charitable transfers for the use of any education institution, church, hospital, orphan asylum, public library, etc.;
• Transfer for public purposes made to New Jersey or any political subdivision of the State;
• Payments from the New Jersey Public Employees’ Retirement System, the New Jersey Teachers’ Pension and Annuity Fund and the New Jersey Police and Firemen’s Retirement System.;
• Federal Civil Service Retirement benefits payable to a beneficiary other than the estate of the executor or administrator of a decedent’s estate;
• Annuities payable to survivors of military retirees.

Yes, the tax is a lien on all property for 15 years, unless paid sooner or secured by acceptable bond. Interest on unpaid tax will accrue at the rate of 10% per annum beginning eight (8) months after the date of the decedent’s death.

In addition to the inheritance tax on the estate of certain resident decedents, New Jersey imposes an estate tax. This Tax will no longer exist for those who die after 2017.

Certain property in the name of or belonging to the decedent cannot be transferred without the written consent of the Director, Division of Taxation. This consent, commonly known as a “waiver,” will not be granted until any tax due has been paid or provided for.

Not withstanding the waiver provisions above, any financial institution may release up to 50% of any bank account, certificate of deposit, etc. to the survivor. In the case of a joint account, the executor, administrator or other legal representative of a RESIDENT decedent’s estate. This procedure is referred to as a BLANKET WAIVER. This procedure is not available for the transfer of stocks and bonds. For a detailed explanation, see N.J.A.A. 18:26-11.16.

Property owned jointly by husband and wife with rights of survivorship is automatically owned by the survivor.

If you die without a Will, you are “Intestate” and your assets pass by rules set up by the State. A common misunderstanding is that if you die without a Will, your assets may end up passing to the State. This is possible, but only if you have no living relatives…including stepchildren and stepchildren’s descendants. The State of New Jersey has set up rules to divide the assets of intestate estates, but often these rules do not give assets to the people that the deceased person would have had his or her wishes been documented in a Will. The intestate rules are set out in Title 3B, Administration of Estates, Chapter 5, Intestacy.

For more details, see our Article on New Jersey Intestacy Rules.

The Administrator is, in general, required to collect and safeguard all of the assets of the estate, eventually, pay the debts of the decedent, any taxes due, make a distribution to the proper heirs and be able to provide an accounting of his actions to the beneficiaries of heirs. You may wish to call an attorney to give you further advice as to specific duties and obligations.

An Administrator is entitled to compensation. The amount depends on several factors. For more detail, see our Article on New Jersey Administrator Fees.