Kenneth Vercammen & Associates, P.C.
2053 Woodbridge Ave.
Edison, NJ 08817
(732) 572-0500
www.njlaws.com

Thursday, January 30, 2014

NJ Inheritance Tax

NJ Inheritance Tax  

       The Transfer Inheritance Tax recognizes five beneficiary classes, as follows:
Class “A” - Father, mother, grandparents, spouse, child or children of the decedent, adopted child or children of the decedent, issue of any child or legally adopted child of the decedent and step-child of the decedent.
Class “B” - Eliminated by statute effective July 1, 1963.
Class ”C” - Brother or sister of the decedent, including half brother and half sister, wife or widow of a son of the decedent, or husband or widower of a daughter of the decedent.
Class “D” - Every other transferee, distributee or beneficiary who is not included in Classes “A”, “C” or “E”.

Class “E” - The State of New Jersey or any political subdivision thereof, or any educational institution, church, hospital, orphan asylum, public library or Bible and tract society or to, for the use of or in trust for religious, charitable, benevolent, scientific, literary or educational purposes, including any institution instructing the blind in the use of dogs as guides, no part of the net earnings of which inures to the benefit of any private stockholder or other individual or corporation; provided, that the exemption does not extend to transfers of property to such educational institutions and organizations of other states, the District of Columbia, territories and foreign countries which do not grant an equal, and like
exemption on transfers of property for the benefit of such institutions and organizations of this State.

NOTES: If any beneficiary is claimed to be the mutually acknowledged child of the decedent, said claim should be set forth in the detailed manner prescribed under N.J.A.C. 18:26-2.6. For the purposes of the New Jersey Transfer Inheritance Tax an adopted child is accorded the same status as a natural child and, therefore, his relations are treated in the same manner as those of a natural child. (i.e. if the decedent’s adopted son marries, his spouse is “the wife of a son of the decedent” and therefore a class “C”
beneficiary).

     A devise of real property to a husband and wife as “tenants by the entirety” provides each with a vested life estate, the remainder being contingent. See N.J.A.C. 18:26-8.12. The issue of stepchildren ARE Class “D” (NOT Class “A”) beneficiaries.

     The following ARE Class “D” (NOT Class “C”) beneficiaries: stepbrother or stepsister of the decedent, wife or widow of a stepchild of the decedent, husband or widower of a step-child of the decedent, wife or widow of a mutually acknowledged child of the decedent, and husband or widower of a mutually acknowledged child of the decedent. The fact that a beneficiary may be considered “nonprofit” by the Internal Revenue Service does not necessarily mean that it qualifies for exemption as a Class “E” beneficiary since the criteria are different.

TAX RATES
       Each class of beneficiary has its own separate tax rate.

EXEMPTIONS
1. The transfer of real and personal property in this State held by a husband and wife as “tenants by the entirety” to the surviving spouse is not taxable for New Jersey Inheritance Tax purposes.
2. The transfer of intangible personal property such as stocks, bonds, corporate securities, bank deposits and mortgages owned by a nonresident decedent is not subject to the New Jersey Inheritance Tax.
3. Any sum recovered under the New Jersey Death Act as compensation for wrongful death of a decedent is not subject to the New Jersey Inheritance Tax except as provided below:
a. Any sum recovered under the New Jersey Death Act representing damages sustained by a decedent between the date of injury and date of death, such as the expenses of care, nursing, medical attendance, hospital and other charges incident to the injury, including loss of earnings and pain and suffering are to be included in the decedent’s estate.
b. Where an action is instituted under the New Jersey Death Act and terminates through the settlement by a compromise payment without designating the amount to be paid under each count, the amount which must be included in the inheritance tax return is an amount, to the extent recovered, which is equal to specific expenses related to the injury. These expenses are similar to those mentioned in sections a. above and include funeral expenses, hospitalization and medical expenses, and other expenses incident to the injury. Any amount which is recovered in excess of these expenses is considered to be exempt from the tax.
4. The proceeds of any contract of insurance insuring the life of a resident or nonresident decedent paid or payable, by reason of the death of such decedent, to one or more named beneficiaries other than the estate, executor or administrator of such decedent are exempt for New Jersey Inheritance Tax purposes.
5. The transfer of property to a beneficiary or beneficiaries of a trust created during the lifetime of a resident or nonresident decedent, to the extent such property results from the proceeds of any contract of insurance, insuring the life of such decedent and paid or payable to a trustee or trustees of such decedent by reason of the death of such decedent, is exempt from the New Jersey Inheritance Tax irrespective of whether such beneficiary or beneficiaries have a present, future, vested,
contingent or defeasible interest in such trust.
6. The transfer of life insurance proceeds insuring the life of a  resident or nonresident decedent, paid or payable by reason of the death of such decedent to a trustee or trustees of a trust created by such decedent during his lifetime for the benefit of one or more beneficiaries irrespective of whether such beneficiaries have a present, future, vested, contingent or defeasible interest in such trust, is exempt from the New Jersey Inheritance Tax.
7. The transfer, relinquishment, surrender or exercise at any time or times by a resident or nonresident of this State, of any right to nominate or change the beneficiary or beneficiaries of any contract of insurance insuring the life of such resident or nonresident, regardless of when such transfer, relinquishment, surrender or exercise of such right occurred, is exempt from the tax.
8. Any amount recovered (under the Federal Liability for Injuries to Employees Act) for injuries to a decedent by the personal representative for the benefit of the classes of beneficiaries designated in that Statute, whether for the pecuniary loss sustained by such beneficiaries as a result of the wrongful death of the decedent or for the loss and suffering by the decedent while he lived, or both is not subject to the Inheritance Tax.

       Any amount recovered by the legal representatives of any decedent by reason of any war risk insurance certificate or policy, either term or converted, or any adjusted service certificate issued by the United States, whether received directly from the United States or through any intervening estate or estates, is exempt from the New Jersey Inheritance Tax.

       This exemption does not entitle any person to a refund of any tax heretofore paid on the transfer of property of the nature aforementioned; and does not extend to that part of the estate of any decedent composed of property, when such property was received by the decedent before death.

9. The proceeds of any pension, annuity, retirement allowance, return of contributions or benefit payable by the Government of the United States pursuant to the Civil Service Retirement Act, Retired Serviceman’s Family Protection Plan and the Survivor Benefit Plan to a beneficiary or beneficiaries other than the estate or the executor or administrator of a decedent are exempt.

10. All payments at death under the Teachers Pension and Annuity Fund, the Public Employees’ Retirement System for New Jersey , and the Police and Firemen’s Retirement System of New Jersey, and such other State, county and municipal systems as may have a tax exemption clause as broad as that of the three major State systems aforementioned, whether such payments either before or after retirement are made on death to the employee’s estate or to his specifically designated beneficiary, are exempt from the New Jersey Inheritance Tax.
       The benefit payable under the supplementary annuity plan of the State of New Jersey is not considered a benefit of the Public Employee’s Retirement System and is taxable whether paid to a designated beneficiary or to the estate. The benefits paid to decedent’s widow by the New Jersey State Firemen’s Association per N.J.S.A. 43:17-35 and benefits paid to decedent’s widow by the New Jersey State Judges Pension Act per N.J.S.A.. 2A:3-21.4 et seq. and 43:6 et seq. are exempt from taxation.
       The death benefits paid by the Social Security Administration or railroad Retirement Board to the spouse of a decedent are also exempt. For purposes of filing a return these amounts need not be reported nor are they to be deducted from the amount claimed as a deduction for funeral expenses. In all other cases the death benefit involved should either be reported as an asset of the estate or deducted from the amount claimed for funeral expenses. 
11. Other pensions. An exemption is provided for payments from any pension, annuity, retirement allowance or return of contributions, which is a direct result of the decedent’s employment under a qualified plan as defined by section 401(a), (b), and (c) or 2039(c) of the Internal Revenue Code, which is payable to a surviving spouse.
12. The amount payable by reason of medical expenses incurred as a result of personal injury to the decedent should be reflected by reducing the amount claimed for medical expenses as a result of the accident.

       The amount payable at the death of an income producer as a result of injuries sustained in an accident, which are paid to the estate of the income producer, is reportable for taxation. In all other instances this amount is exempt.

       The amount paid at death to any person under the essential services benefits section is exempt from taxation. The claim for funeral expense is to be reduced by the amount paid under the funeral expenses benefits section of the law.

SAFE DEPOSIT BOXES
       Safe deposit boxes are no longer inventoried by the New Jersey Division of Taxation. On September 30, 1992, the Division issued a blanket release in the form of a letter from the Director, Division of Taxation, to all banking institutions, safe deposit companies, trust companies, and other institutions which serve as custodians of safe deposit boxes. The contents of the boxes may be released without inspection by the Division.

WHERE TO FILE
       All returns except the L-8 are to be filed with the New Jersey Division of Taxation, Individual Tax Audit Branch, Transfer Inheritance and Estate Tax, 50 Barrack Street, PO Box 249, Trenton, New Jersey 08695-0249.

WHEN TAX RETURNS ARE DUE
       A Transfer Inheritance Tax Return must be filed and the tax paid on the transfer of real and personal property within eight months after the death of either:
A RESIDENT decedent for the transfer of real or tangible personal property located in New Jersey or intangible personal property wherever situated, or
A NONRESIDENT decedent for the transfer of real or tangible personal property located in New Jersey. No tax is imposed on nonresident decedents for real property located outside of New Jersey and intangible personal property wherever situated.
       The return must be filed whenever any tax is due or a waiver is needed. The tax is a lien on all property for fifteen years unless paid sooner or secured by an acceptable bond. Interest accrues on unpaid taxes at the rate of 10% per annum.
For EXEMPTIONS see the heading “EXCEPTIONS” below.

________
IMPORTANT REMINDERS
• If the decedent died TESTATE you must supply a legible copy of the LAST WILL AND TESTAMENT, all CODICILS thereto and any SEPARATE WRITINGS.
• A copy of the decedent’s last full year’s FEDERAL INCOME TAX RETURN is required.
• All returns, forms and correspondence must contain the decedent’s SOCIAL SECURITY NUMBER.
• PAYMENTS ON ACCOUNT may be made to avoid the accrual of interest. (Form IT-EP)
• If PAYMENTS are not made by CERTIFIED CHECK the issuance of waivers may be delayed.
• All CHECKS should be made payable to N.J. INHERITANCE TAX and sent to the New Jersey Division of Taxation, Individual Tax Audit Branch, Transfer Inheritance and Estate Tax, 50 Barrack Street, PO Box 249, Trenton, NJ 08695-0249.

AMENDMENTS TO AN ORIGINAL RETURN
       In the case of both resident and non-resident estates, any assets and/or liabilities not disclosed in the original return and all supplemental data requested by the Division is to be filed in affidavit form and attested to by the duly authorized statutory representative of the estate, next of kin, or beneficiary certifying in detail a description of the asset, real or personal and/or the liability and the reasons for failure to disclose same in the original return and filed directly with the NJ Transfer Inheritance.

ESTATE TAX
       In addition to the inheritance tax, the State of New Jersey  imposes an estate tax on the estate of certain resident decedents.  The estate tax is designed to absorb any portion of the credit allowable for State death taxes under the federal estate tax law that is not fully taken up by the aggregate amount of all death taxes paid to any State, United States territory or the District of Columbia. The tax is the difference, if any, determined by subtracting the amount of the inheritance, legacy and succession taxes paid to this State and elsewhere from the allowable credit. Even estates that are partially or fully exempt from the inheritance tax may be subject to the New Jersey State Tax.

       The New Jersey Estate Tax obligation is in no way discretionary on the part of the taxpayer. It MAY NOT be satisfied by payment of the appropriate amount to the Federal Government in lieu of claiming the credit allowable for Federal Estate Tax purposes.
       The law requires that a copy of the Federal Estate Tax return be filed with the Division within thirty days after the filing of the  original with the Federal Government. Also, the Division must be supplied with copies of all communications from the Federal  Government making final changes or confirming, increasing or decreasing the tax shown to be due. Further instructions are  contained in the body of the Estate Tax return, a copy of which is included in this booklet. (Not included in IT-R Schedule Booklet.)

WAIVERS 
       Bank accounts, certificates of deposit etc., in the name of, or belonging to a RESIDENT decedent, in financial institutions located in this state, cannot be transferred without the written consent of the Division of Taxation. This consent is referred to as a WAIVER.
       Stocks and bonds etc., in the name of, or belonging to a RESIDENT decedent, of corporations organized under the laws of this state are subject to the same waiver requirements. Real property, located in New Jersey, in the name of, or belonging to a RESIDENT or a NON-RESIDENT decedent is subject to the same waiver requirements, however, real property held by a husband and wife as “tenants by the entirety” in the estate of the spouse dying first need not be reported, regardless of the date of death and waivers are not required.
       A membership certificate or stock in a cooperative housing corporation held in the name of the decedent and a surviving spouse as joint tenants with the right of survivorship is exempt on or after May 6, 1980, if it was their principal residence. However a waiver is required for this transfer in the estate of a RESIDENT decedent. Waivers are not required for automobiles, household goods, personal effects, accrued wages or mortgages, but these items must be reported in the return filed.
EXCEPTIONS
       Notwithstanding 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.C. 18:26-11.16.

       A SELF EXECUTING WAIVER, FORM L-8, has been created for Class “A” beneficiaries in the estates of RESIDENT decedents. This form may be used in two instances:
1. Transfers to a surviving spouse in estates of decedents dying on or after January 1, 1985.
2. Transfers to a surviving spouse or any other Class “A” beneficiary in estates of decedents dying on or after July 1, 1988.
       Use of this form MAY eliminate the need to file a formal Inheritance Tax return. Your attention is directed to the instructions contained in the body of the L-8, a copy of which is included in this booklet. (Not included in IT-R Schedule Booklet.) This form is to be filed with the financial institution which will then be authorized to release the subject asset without the necessity of receiving a waiver from the Division. DO NOT file this form with the Division.

A REQUEST FOR A REAL PROPERTY TAX WAIVER,
       FORM L-9, has been created for Class “A” beneficiaries in the estates of RESIDENT decedents. This form may be used in two instances:
1. Transfers to a surviving spouse in estates of decedents dying on or after January 1, 1985 and the decedent’s interest was in the decedent’s name alone.
2. Transfers to a surviving spouse or any other Class “A” beneficiary in estates of decedents dying on or after July 1, 1988 and the decedent’s interest in the real estate was in the name of the decedent alone or with any other Class “A” beneficiary.
       Use of this form MAY eliminate the need to file a formal Inheritance Tax Return. Your attention is directed to the instructions contained in the body of the L-9, a copy of which is included in this booklet. (Not included in IT-R Schedule Booklet.)
       This form is to be filed directly with the Branch. If the form  is in order the necessary waiver/waivers will be promptly issued. NEITHER THE L-8 NOR THE L-9 may be used where it is claimed that a relationship of mutually acknowledged child exists.



Post Will instructions

                                                              Post Will instructions

                 
         I am writing this letter to you in order to give you and all my clients several important reminders regarding your Will and things related to it. I am doing this in order for you to have a permanent record of the contents of this letter and also that you may refer to this letter from time to time in the future in order to refresh your memory of them.  Please be sure, therefore, to keep this letter with your copy of your Will.

         We have given you the Original signed Will to take home.  Please advise your Executors where the original Will is going to be stored. Additionally, please provide your Executor with our business card and instruct your Executor to contact us prior to going to the Surrogate's Office or probating a Will. If you have a Living Will, please be sure to give a copy to your doctor.

         I recommend that you review your Will periodically in order to keep it up-to date regarding changes in your family, your property, your wishes, and the law.  I suggest that approximately five (5) years from the present time, you contact my office and schedule an appointment again so that we can review your Will together.

         Please do not let this periodic review program prevent you from considering the making of a change in your Will at any earlier date.  Changes should be made whenever you believe such changes are necessary. A person's family, property and wishes may change over the years and for these and other reasons you should re-examine your will from time to time in order to make sure that it will carry out your present wishes.
        
         I caution you against making any marks upon your original Will because this can lead to a Will contest. If you want to make a change in your Will, please come back to my office and we will either make a Codicil (a short addition) to your Will or a new Will depending upon your needs and wishes.

         In the event that a death occurs in your family, may I suggest that you contact my office immediately in order to determine what, if anything must be done in order to settle that person's estate. I also suggest that you instruct your Executor and the members of your family to contact my office immediately, in the event of your death, in order to determine what, if anything, must be done to settle your estate.
         It has been a pleasure handling your legal affairs. If I can be of any help to you in the future, please be sure to call on me again. Thank you again for allowing my office to be of service to you.  We hope you are satisfied with the services performed by my office.  The file is now closed.
          We look forward to helping you and your family in the future. If you have any suggestions for the improvement of my Will and estate planning services, please let me know what they are.  

         We welcome additional business and accept referrals for:

         1) Personal Injury- Car Accidents                                
         2) Municipal Court, Traffic Tickets and DWI.
         3) Wills, Power of Attorney,  Living Wills and Estate Planning.
         4) Criminal cases
         5) Probate/ Administration of Estates
         6) Injuries caused by  Fall downs
         7) Civil Litigation for cases over $10,000.

         Please pass my office's phone number to your family and friends who do not have a current Will. Our Confidential Will Questionnaire is online at
www.njlaws.com/will_Questionnaire.htm
    


                                                        KENNETH VERCAMMEN
Co-Chair American Bar Association Estate Planning & Probate Committee
Co-Author” Nuts & Bolts of Elder Law & Estate Administration for the NJ State Bar Association’s Institute for Continuing Legal Education


Saturday, January 25, 2014

Removing an Executor of an Estate in Middlesex County

Removing an Executor of an Estate in Middlesex County
By Kenneth A. Vercammen, Esq.
         In New Jersey, the court and surrogate do not supervise how an executor or administrator handles the estate. Unfortunately, the Executor occasionally fails to timely carry out their duties. They may fail to file tax returns, fail to keep records, misappropriate funds or ignore instructions under the Will. If you are not satisfied with the handling of the estate, you can have an attorney file a Complaint in the Superior Court. If there is no will, someone can petition the surrogate to be appointed as "administrator" of the estate.

         The New Probate Statute of NJ revised various sections of the New Jersey law on Wills and estates. law makes a number of substantial changes to the provisions governing the administration of estates and trusts in New.

Duty of Executor in Probate & Estate Administration
1. Conduct a thorough search of the decedent's personal papers and effects for any evidence which might point you in the direction of a potential creditor;
2. Carefully examine the decedent's checkbook and check register for recurring payments, as these may indicate an existing debt;
3. Contact the issuer of each credit card that the decedent had in his/her possession at the time of his/ her death;
4. Contact all parties who provided medical care, treatment, or assistance to the decedent prior to his/her death;
         Your attorney will not be able to file the NJ inheritance tax return until it is clear as to the amounts of the medical bills and other expenses. Medical expenses can be deducted in the inheritance tax.
         Under United States Supreme Court Case, Tulsa Professional Collection Services, Inc., v. Joanne Pope, Executrix of the Estate of H. Everett Pope, Jr., Deceased, the Personal Representative in every estate is personally responsible to provide actual notice to all known or "readily ascertainable" creditors of the decedent. This means that is your responsibility to diligently search for any "readily ascertainable" creditors.
Other duties/ Executor to Do
Bring Will to Surrogate
Apply to Federal Tax ID #
Set up Estate Account at bank (pay all bills from estate account)
Pay Bills
Notice of Probate to Beneficiaries (Attorney can handle)
If charity, notice to Atty General (Attorney can handle)
File notice of Probate with Surrogate (Attorney can handle)
File first Federal and State Income Tax Return [CPA- ex Marc Kane]
Prepare Inheritance Tax Return and obtain Tax Waivers (Attorney can handle)
File waivers within 8 months upon receipt (Attorney can handle)
Prepare Informal Accounting
Prepare Release and Refunding Bond (Attorney can handle)

Obtain Child Support Judgment clearance (Attorney will handle)

         Let's review the major duties involved-
In General. The executor's job is to (1) administer the estate--i.e., collect and manage assets, file tax returns and pay taxes and debts--and (2) distribute any assets or make any distributions of bequests, whether personal or charitable in nature, as the deceased directed (under the provisions of the Will). Let's take a look at some of the specific steps involved and what these responsibilities can mean. Chronological order of the various duties may vary.
Probate. The executor must "probate" the Will. Probate is a process by which a Will is admitted. This means that the Will is given legal effect by the court. The court's decision that the Will was validly executed under state law gives the executor the power to perform his or her duties under the provisions of the Will.
         An employer identification number ("EIN") should be obtained for the estate; this number must be included on all returns and other tax documents having to do with the estate. The executor should also file a written notice with the IRS that he/she is serving as the fiduciary of the estate. This gives the executor the authority to deal with the IRS on the estate's behalf.
         Pay the Debts. The claims of the estate's creditors must be paid. Sometimes a claim must be litigated to determine if it is valid. Any estate administration expenses, such as attorneys', accountants' and appraisers' fees, must also be paid.
         Manage the Estate. The executor takes legal title to the assets in the probate estate. The probate court will sometimes require a public accounting of the estate assets. The assets of the estate must be found and may have to be collected. As part of the asset management function, the executor may have to liquidate or run a business or manage a securities portfolio. To sell marketable securities or real estate, the executor will have to obtain stock power, tax waivers, file affidavits, and so on.
         Take Care of Tax Matters. The executor is legally responsible for filing necessary income and estate-tax returns (federal and state) and for paying all death taxes (i.e., estate and inheritance). The executor can, in some cases be held personally liable for unpaid taxes of the estate. Tax returns that will need to be filed can include the estate's income tax return (both federal and state), the federal estate-tax return, the state death tax return (estate and/or inheritance), and the deceased's final income tax return (federal and state). Taxes usually must be paid before other debts. In many instances, federal estate-tax returns are not needed as the size of the estate will be under the amount for which a federal estate-tax return is required.
         Often it is necessary to hire an appraiser to value certain assets of the estate, such as a business, pension, or real estate, since estate taxes are based on the "fair market" value of the assets. After the filing of the returns and payment of taxes, the Internal Revenue Service will generally send some type of estate closing letter accepting the return. Occasionally, the return will be audited.
         Distribute the Assets. After all debts and expenses have been paid, the executor will distribute the assets. Frequently, beneficiaries can receive partial distributions of their inheritance without having to wait for the closing of the estate.
         Under increasingly complex laws and rulings, particularly with respect to taxes, in larger estates an executor can be in charge for two or three years before the estate administration is completed. If the job is to be done without unnecessary cost and without causing undue hardship and delay for the beneficiaries of the estate, the executor should have an understanding of the many problems involved and an organization created for settling estates. In short, an executor should have experience
         At some point in time, you may be asked to serve as the executor of the estate of a relative or friend, or you may ask someone to serve as your executor. An executor's job comes with many legal obligations. Under certain circumstances, an executor can even be held personally liable for unpaid estate taxes. Let's review the major duties involved, which we've set out below.
         In General. The executor's job is to (1) administer the estate--i.e., collect and manage assets, file tax returns and pay taxes and debts--and (2) distribute any assets or make any distributions of bequests, whether personal or charitable in nature, as the deceased directed (under the provisions of the Will). Let's take a look at some of the specific steps involved and what these responsibilities can mean. Chronological order of the various duties may vary.
         Probate. The executor must "probate" the Will. Probate is a process by which a Will is admitted. This means that the Will is given legal effect by the court. The court's decision that the Will was validly executed under state law gives the executor the power to perform his or her duties under the provisions of the Will.
         An employer identification number ("EIN") should be obtained for the estate; this number must be included on all returns and other tax documents having to do with the estate. The executor should also file a written notice with the IRS that he/she is serving as the fiduciary of the estate. This gives the executor the authority to deal with the IRS on the estate's behalf.

         Pay the Debts. The claims of the estate's creditors must be paid. Sometimes a claim must be litigated to determine if it is valid. Any estate administration expenses, such as attorneys', accountants' and appraisers' fees, must also be paid.

         Manage the Estate. The executor takes legal title to the assets in the probate estate. The probate court will sometimes require a public accounting of the estate's assets. The assets of the estate must be found and may have to be collected. As part of the asset management function, the executor may have to liquidate or run a business or manage a securities portfolio. To sell marketable securities or real estate, the executor will have to obtain stock power, tax waivers, file affidavits, and so on.

         Take Care of Tax Matters. The executor is legally responsible for filing necessary income and estate-tax returns (federal and state) and for paying all death taxes (i.e., estate and inheritance). The executor can, in some cases be held personally liable for unpaid taxes of the estate. Tax returns that will need to be filed can include the estate's income tax return (both federal and state), the federal estate-tax return, the state death tax return (estate and/or inheritance), and the deceased's final income tax return (federal and state). Taxes usually must be paid before other debts. In many instances, federal estate-tax returns are not needed as the size of the estate will be under the amount for which a federal estate-tax return is required.

         Often it is necessary to hire an appraiser to value certain assets of the estate, such as a business, pension, or real estate, since estate taxes are based on the "fair market" value of the assets. After the filing of the returns and payment of taxes, the Internal Revenue Service will generally send some type of estate closing letter accepting the return. Occasionally, the return will be audited.

         Distribute the Assets. After all debts and expenses have been paid, the distribute the assets with extra attention and meticulous bookkeeping by the executor. Frequently, beneficiaries can receive partial distributions of their inheritance without having to wait for the closing of the estate.
         Under increasingly complex laws and rulings, particularly with respect to taxes, in larger estates an executor can be in charge for two or three years before the estate administration is completed. If the job is to be done without unnecessary cost and without causing undue hardship and delay for the beneficiaries of the estate, the executor should have an understanding of the many problems involved and an organization created for settling estates.

COMPLAINT FOR ACCOUNTING
A Complaint for Accounting is filed with the Probate Part to request on accounting, removal of the current executor and selection of a new person to administer and wrap up the estate.
A signed certification of one or more beneficiaries is needed. In addition, an Order to Show Cause is prepared by your attorney. The Order to Show Cause is to be signed by the Judge directing the executor, through their attorney, to file a written answer to the complaint, as well as appear before the court at a specific date and time.
As with a litigated court matter, trials can become expensive. Competent elder law/probate attorney may charge an hourly rate of $300-$450 per hour, with a retainer of $4000 needed. Attorneys will require the full retainer to be paid in full up front.
The plaintiff can demand the following:
(1) That the named executor be ordered to provide an accounting of the estate to plaintiff.
(2) Defendant, be ordered to provide an accounting for all assets of d1 dated five years prior to death.
(3) Payment of plaintiff's attorney's fees and costs of suit for the within action.
(4) Declaring a constructive trust of the assets of the decedent for the benefit of the plaintiff and the estate.
(5) That the executor be removed as the executor/administrator of the estate and that someone else be named as administrator of the estate.
(6) That the executor be barred from spending any estate funds, be barred from paying any bills, be barred from taking a commission, be barred from writing checks, be barred from acting on behalf of the estate, except as specifically authorized by Superior Court Order or written consent by the plaintiff.
EXECUTOR'S COMMISSIONS
Executors are entitled to receive a commission to compensate them for work performed. Under NJSA 3B:18-1 et seq., Executors, administrators and other fiduciaries are entitled to receive a commission on both the principal of the estate, and the income earned by assets.
However, if you have evidence that the executor has breached their fiduciary duties or violated a law, your Superior Court accounting complaint can request that the commissions be reduced or eliminated.
SALE OF REAL ESTATE AND OTHER PROPERTY
Occasionally, a family member is living in a home owned by the decedent. To keep family harmony, often this family member is permitted to remain in the home temporarily. However, it may later become clear that the resident has no desire on moving, and the executor has neither an intention to make them move nor to sell the house. The remedy a beneficiary has can be to have your attorney include in the Superior Court complaint a count to
1) remove the executor
2) remove the tenant and make them pay rent to the estate for the time they used the real property since death without paying rent
3) compel the appraisal of the home and, thereafter, the sale of the property
4) make the executor reimburse the estate for the neglect or waste of assets.
CONCLUSION
As a beneficiary, you will probably eventually be requested to sign a release and refunding bond. If you have evidence of misappropriation, you may consider asking the executor for an informal accounting prior to signing the release and refunding bond. If you have concern regarding the handling of an estate, schedule an appointment to consult an elder law attorney.

Kenneth A. Vercammen is a Middlesex County, NJ trial attorney who has published 125 articles in national and New Jersey publications on Probate and litigation topics. He often lectures to trial lawyers of the American Bar Association, New Jersey State Bar Association and Middlesex County Bar Association. He is Chair of the American Bar Association Estate Planning & Probate Committee. He is also Editor of the ABA Elder Law Committee Newsletter
He is a highly regarded lecturer on litigation issues for the American Bar Association, ICLE, New Jersey State Bar Association and Middlesex County Bar Association. His articles have been published by New Jersey Law Journal, ABA Law Practice Management Magazine, and New Jersey Lawyer. He is the Editor in Chief of the New Jersey Municipal Court Law Review. Mr. Vercammen is a recipient of the NJSBA- YLD Service to the Bar Award.

In his private practice, he has devoted a substantial portion of his professional time to the preparation and trial of litigated matters. He has appeared in Courts throughout New Jersey several times each week on many litigation matters, Municipal Court trials, and contested Probate hearings.

KENNETH VERCAMMEN
Attorney at Law
Legal Resume
2053 Woodbridge Ave.
Edison, NJ 08817
732-572-0500
www.centraljerseyelderlaw.com