What Is Probate in New Jersey?

Probate and estate administration are the processes through which estate assets are transferred after death. When probate avoidance planning has not been implemented prior to death, the state will require a probate court proceeding if the deceased was a resident or owned assets in the state. Probate can be supervised or unsupervised. In an unsupervised probate, the appointed estate administrator manages assets, pays any debts, files required tax returns and various court documents, and distributes the estate assets. However, the court may at any time require the process to be supervised (usually when someone expresses concern about the estate administration). In a supervised probate, the probate judge must approve every detail of the estate administration.

What Happens During New Jersey Probate Procedures?

The probate procedurally determines whether or not certain obligations need to be met before the assets held in the decedent’s estate are distributed. The most common issues that must be resolved include creditor claims, owed back taxes, and whether or not certain assets truly belong in the estate compared to a trust or automatic property transfer. During probate, reasonable administration costs of the estate will also be paid. If there are disputes as to the validity of the will or any other forms of contested probate, the court may elect to hold hearings on the matter or (more likely) delay the closure of probate until the matter can be resolved out-of-court through negotiations among the interested parties. Unlike many other states, New Jersey does not have a uniform probate code in place. This lack of clear state laws that govern probate proceedings could mean different requirements and procedures based on the county in which the probate case is being conducted. The decision to close probate is a serious one, and administrators or executors may face challenges with determining the validity of creditor claims or will contests. Working with a seasoned New Jersey probate planning team can help an administrator or executor weigh their options carefully while meeting their fiduciary duty to act in the interests of the estate.

New Jersey Probate, Estate and Trust Administration

Serving Families Throughout New Jersey

Administration of a decedent’s estate involves, among many things, probating the estate, collecting the decedent’s assets, calculation and payment of estate taxes, and the distribution of remaining assets to the beneficiaries. An experienced probate and estate administration attorney can help to facilitate this often difficult process in a timely and effective manner.

Probating the Estate

An estate is comprised of the totality of the property owned by a deceased individual (the decedent). If the decedent had a Last Will and Testament (the “will”), then the property is ultimately distributed pursuant to the terms of the will and to the persons or entities that the decedent specifically named as their beneficiaries. If there is no will, then the assets are distributed pursuant to what is called the laws of intestacy. The laws of intestacy is the state’s plan for who receives the decedent’s assets when the decedent did not have a Will. Whether or not the decedent had a will, the assets that are in the decedent’s name will need to through probate. Probate is the court procedure by which:

The will is proved to be valid or invalid.
The property covered by the will is shown to be the decedent’s.
If there is no will, it is determined how the property is to be distributed, in accordance with the inheritance laws of the state where the decedent lived.
Unpaid creditors of the decedent are given the opportunity to file claims against the estate.
Fees for the administration of the estate are approved and paid.
The probate assets of the estate are distributed to the beneficiaries.

Before the property can be distributed, it is generally necessary to go through probate, or, in the case of small estates, a less formal procedure under the general supervision of the probate court.

Probate Avoidance

Because probate can be a lengthy, costly, and public process, many people choose to avoid it. There are a number of legal strategies that will allow you to pass property to another person after death, without that property going through probate.

Joint Tenancy & Tenancy by the Entirety

Adding another person to your assets as a joint owner or “joint tenant with rights of survivorship” will allow your property to pass to them upon your death without going through probate. There are pitfalls to this strategy, however, which include subjecting such assets to any claims (such as lawsuits) against the co-owner and making them available to the co-owner’s creditors — all while you are still alive and planning on using the assets yourself!

Beneficiary Designations

Transfer on Death (TOD) or Pay on Death (POD) beneficiary designations can be added to financial accounts. Beneficiary designations like these can be preferable to joint tenancy in that they allow you to transfer property only upon your death without giving away current ownership.

One of the drawbacks, however, is that it can be difficult to obtain an equitable distribution of property among your heirs by utilizing beneficiary designations. Additionally, understand that if you have beneficiaries listed on your assets, those assets will be distributed upon your death to the listed beneficiaries, even if your will states otherwise.

Revocable Living Trust

A Revocable Living Trust is a legal document that allows you to establish a separate entity (the trust) to “hold” legal title to your assets while you are alive, and to name trustees to manage those assets according to the trust terms.

Typically, you serve as the trustee while you are alive, managing your assets for your own benefit. Upon your disability or death, the trust terms appoint your successor trustee who then continues to manage — or distribute — the assets held in trust. A properly drafted trust can accomplish many goals, including guardianship and probate avoidance for your estate and bloodline, marital and creditor protection for your children.

The goal, then, is to plan ahead and restrict the number of assets held in your personal estate as much as possible. This can require careful funding and administration of trusts, with regular updates to the trust’s contents in order to reflect the current holdings of the trust creator.

Trust Administration

Assets contained in a properly drafted and funded trust will generally avoid probate. The trust need not be filed with the probate court. Nonetheless, there are still steps necessary to administer the trust: beneficiaries must be contacted; assets must be gathered, valued, and managed; potential creditors must be notified; debts, taxes, and final expenses must be paid; and, ultimately, any remaining income and assets must be distributed in compliance with the trust terms.

Successor trustees often lack the time, resources, or knowledge to personally administer the trust, and therefore may call upon legal, accounting, and investment professionals for assistance. We can help your successor trustee(s) deal with the complexities of administering your trust.

Reach out to Van Dyck Law Group for legal assistance with any matters involving estate planning, probate, or trust administration. Please call our office and we will be happy to schedule a consultation, whether or not our office has drafted the original will or trust.

Schedule a confidential consultation with no obligation when you call (609) 293-2621 or contact us online.