While each estate administration presents different facts - the terms of the Will or Trust, the amount and composition of the assets, each estate in New Jersey goes through the same 3 stages:
· Probate. The first stage is when the Will is offered for probate at the local Surrogate’s Court. This is a very simple process in which your executors present the Will, and then they are issued Letters of Testamentary, which will give the Executor(s) the authority to carry out your wishes as set forth in your Will. This is done by making an appointment with the Morris County Surrogate’s Court (10) ten days after the date of your death. Alternatively, if the Executor(s) decide to attain an attorney to assist them, the attorney’s office can often have the documents signed at their office. If there is no Will, an Administration is opened where your Administrators are issued Letters of Administration. Letters Testamentary and Letters of Administration give your representative the power over your assets and to settle any liabilities.
· Gather Assets; Pay Liabilities. The second stage is gathering together all your assets, determining their value, paying any debts or liabilities (including taxes if any) and filing any necessary tax returns. Until the tax returns are filed and approved (or a waiver is completed because no taxes are due) New Jersey has a lien on your assets and they cannot be fully distributed.
· Closing the Estate. Once the tax returns are approved, New Jersey will issue a Waiver, which releases its lien on the assets. The Executor then normally accounts to the beneficiaries what came into the estate, what went out, and what is left to distribute. This informal accounting is coupled within a “Release and Refunding Bond” where the beneficiaries agree to their distribution, waive any claim to be entitled to more, and release the Executor from liabilities. The accounting and “Release and Refunding Bonds” will act to close the Estate. You should anticipate that the entire Estate Administration process will be a 14-24 month process.
The Executor/Administration has many responsibilities beyond these. We find that since people are generally taking on the job of Executor/Administrator for the first time, it appears overwhelming. By looking at the job in stages, it becomes more manageable and doable. Many Executors/Administrators seek professional advice because even if they can consider the job in stages, their lack of experience in that role, and not knowing their responsibilities and questions to ask, potentially opens them up to liability and claims from the beneficiaries or tax authorities.