Joint Bank Accounts Upon Death

Joint Bank Accounts Upon Death 

         Even if there is a joint bank account, there may be an Inheritance Tax due.  There is a tax due for Class ”C” beneficiaries- 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.  -taxed at 11%–16%, with the first $25,000 exempt. 

Class “D” - Every other transferee, distributee or beneficiary who is not included in Classes “A”, “C” or “E”. They are taxed at 15%. 

  Your attorney will assist by preparing the Inheritance Tax returns.

         An excellent explanation on handling joint accounts is found at http://www.co.cumberland.nj.us/content/173/2139/3327/969.aspx#16

How do I handle joint bank accounts or certificates of deposit?

Certain bank accounts and certificates may be owned with rights of survivorship, which means that upon the death of one party to the account, the surviving party (or parties) become the sole owner (owners). If the decedent maintained such an account, the survivor will be able to withdraw one-half of the funds in the account by giving the bank a death Certificate and without the need to provide anything from the Surrogate. The other half will not be released until a tax waiver is issued by the New Jersey transfer Inheritance Tax Bureau, normally after the tax is paid and the return is filed.

Under the new inheritance tax laws governing estates from spouse to spouse, when the bank account is co-owned, funds may be transferred with a copy of the death certificate, without any type of certificate from the surrogate's office. The spouse will sign an L-8 tax waiver, usually completed by the financial institute. If the account is in the name of the decedent only, the bank will require a certificate from the surrogate in addition to the L-8.

When the bank account is co-owned by any other Class A, (parents, grandparents, children, grandchildren, adopted children, or stepchildren), the procedure is the same as spouse to spouse, except the co-owner will sign an L-8 tax waiver. If the account is in the name of the decedent only, the bank will require a certification from the surrogate in addition to the L-8.

Transfer of real estate to a Class A beneficiary: To obtain a real estate tax waiver, Form L-9 is used in estates of resident descendent only, and filed directly with the Division of Taxation. The waiver, when received is filed in the County Clerk's Office.

         

         It is bad estate planning to just put bank accounts into joint bank accounts

See also: If Title to an Asset is Held by the Testator Jointly with a Right of Survivorship 

Assets held by the testator and another person jointly, with a right of survivorship, are said to be held as “Joint Tenants with Right of Survivorship” (JTWROS); and pass by operation of law at the testator’s death to the surviving joint tenant. Bank accounts, securities and real estate are often held in joint tenancy. Assets that are titled this way are not subject to probate. The name on the bank or securities account application and the deed for real estate may read: “John Smith and Jane Doe, as Joint Tenants with Right of Survivorship.” Be careful changing title to existing assets because there can be tax and other consequences. Source http://www.bergencountysurrogate.com/whatisprobate.pdf

Below are the details NJ statutes on joint bank accounts. Hire a NJ attorney if you are the Executor to make sure all taxes paid before bank accounts distributed and spent.

         Registration in beneficiary form may be shown by the words "transfer on death" or the abbreviation "TOD," or by the words "pay on death" or the abbreviation "POD," after the name of the registered owner and before the name of the beneficiary.

N.J.S. § 3B:30-6

3B:1-1  Definitions A to H.
"Governing instrument" means a deed, will, trust, insurance or annuity policy, account with the designation "pay on death" (POD) or "transfer on death" (TOD), security registered in beneficiary form with the designation "pay on death" (POD) or "transfer on death" (TOD), pension, profit-sharing, retirement or similar benefit plan, instrument creating or exercising a power of appointment or a power of attorney, or a dispositive, appointive, or nominative instrument of any similar type.

    6.   Registration in beneficiary form may be shown by the words "transfer on death" or the abbreviation "TOD," or by the words "pay on death" or the abbreviation "POD," after the name of the registered owner and before the name of the beneficiary. 

Short title This act shall be known and may be cited as the "Multiple-party Deposit Account Act. 17:16I-1.

1.  TRANSFER OF ASSETS... 

In order to make a transfer of an asset belonging to the decedent at death, the personal representative will usually need to perform the following functions: 

A) acquire from the Surrogate certificates or the proper Affidavit; 

B) file with the New Jersey Inheritance Tax Bureau in Trenton for a tax waiver. A tax waiver is a document issued by the State of New Jersey, which releases the property from any inheritance tax claim, which could be asserted by the State. 

To determine if a waiver is necessary, use the following formula: 

1) Personal Property 

a) If money belonging to the decedent at death is in a joint bank account in the name of a decedent and their spouse, domestic partner, grandparent, child, step-child, legally adopted child of their issue, the bank will release the funds To the surviving owner upon the execution of an affidavit of waiver or L-8 form, which can be obtained from the respective bank. No tax waiver is necessary. 

b) If the money belonging to the decedent is in the decedent's name alone, but will be distributed by a Will or by law to the spouse, domestic partner, parent, grandparent, child, step-child, legally adopted child or their issue, the bank will release the funds to the personal representative of the estate with a Surrogate's Certificate. The balance can be released when the appropriate tax waiver is given to the bank by the Estate Representative. 

c) If money belonging to the decedent at death is in a bank account in the name of the decedent alone, the bank will freeze the account, but will allow withdrawal of one-half of the funds upon receipt of a Surrogate's certificate. The balance can be released when the appropriate tax waiver is received by the bank. 

In order to acquire a tax waiver, all inheritance taxes due to the state of New Jersey must be paid. Even if no tax is due, a form may still have to be filed to demonstrate to the Inheritance Tax Bureau that the property is exempt.

Upon evidence that the Estate is exempt from taxes and/or payment of any taxes due, the bureau will issue a tax waiver. This waiver when presented to the bank will release the frozen funds. 

2) Real Property 

Real property, if in the decedent's name alone, will pass according to the terms of the Will or if no Will, then by the laws of intestacy. 

If the property is owned jointly with rights of survivorship, it will pass to the surviving owner. 

If owned as tenants by the entirety as husband and wife or domestic partners, the property will pass automatically by operation of law to the surviving spouse or domestic partner. Source http://www.co.ocean.nj.us/Surrogates/PDF%5Cplanningguide.pdf

More info at 

http://www.centraljerseyelderlaw.com/joint_bank_accounts_upon_death.htm

17:16I-2. Definitions As used in this act unless the context otherwise requires:

a. "Account" means a contract of deposit of funds between a depositor and a financial institution, and includes a checking account, savings account, certificate of deposit, share account and other like arrangement;

b. "Beneficiary" means a person named in a trust account as one for whom a party to the account is named as trustee;

c. "Financial institution" means any organization authorized to do business under State or Federal laws relating to financial institutions, including, without limitation, banks and trust companies, savings banks, building and loan associations, savings and loan associations;

d. "Joint account" means an account payable on request to one or more of two or more parties whether or not mention is made of any right of survivorship, and regardless whether the names of the parties are stated in the conjunctive or in the disjunctive;

e. A "multiple-party account" is any of the following types of account: (1) a joint account, (2) a P.O.D. account, or (3) a trust account. It does not include accounts established for deposit of funds of a partnership, joint venture, or other association for business purposes, or accounts controlled by one or more persons as the duly authorized agent or trustee for a corporation, unincorporated association, charitable or civic organization or a regular fiduciary or trust account where the relationship is established other than by deposit agreement;

f. "Net contribution" of a party to a joint account as of any given time is the sum of all deposits thereto made by or for him, less all withdrawals made by or for him which have not been paid to or applied to the use of any other party, plus a pro rata share of any interest or dividends included in the current balance. The term includes, in addition, any proceeds of deposit life insurance added to the account by reason of the death of the party whose net contribution is in question;

g. "Party" means a person who, by the terms of the account, has a present right, subject to request, to payment from a multiple-party account. A P.O.D. payee or beneficiary of a trust account is a party only after the account becomes payable to him by reason of his surviving the original payee or trustee. Unless the context otherwise requires, it includes a guardian, conservator, personal representative, or assignee, including an attaching creditor, of a party. It also includes a person identified as a trustee of an account for another whether or not a beneficiary is named, but it does not include any named beneficiary unless he has a present right of withdrawal;

h. "Payment" of sums on deposit includes withdrawal, payment on check or other directive of a party, and any pledge of sums on deposit by a party of any setoff, or reduction or other disposition of all or part of an account pursuant to a pledge;

i. "Proof of death" includes a certified or authenticated copy of a death certificate purporting to be issued by an official or agency of the place where the death purportedly occurred, and a certified or authenticated copy of any judgment or record or report of a court or a governmental agency, domestic or foreign, that a person is dead;

j. "P.O.D. account" means an account payable on request to one person during lifetime and on his death to one or more P.O.D. payees, or to one or more persons during their lifetimes and on the death of all of them to one or more P.O.D. payees;

k. "P.O.D. payee" means a person designated on a P.O.D. account as one to whom the account is payable on request after the death of one or more persons;

l . "Request" means a proper request for withdrawal, or a check or order for payment, which complies with all conditions of the account, including special requirements concerning necessary signatures and regulations of the financial institution; but if the financial institution conditions withdrawal or payment on advance notice, for purposes of this part the request for withdrawal or payment is treated as immediately effective and a notice of intent to withdraw is treated as a request for withdrawal;

m. "Sums on deposit" means the balance payable on a multiple-party account including interest, dividends, and in addition any deposit life insurance proceeds added to the account by reason of the death of a party;

n. "Trust account" means an account in the name of one or more parties as trustee for one or more beneficiaries where the relationship is established by the form of the account and the deposit agreement with the financial institution and there is no subject of the trust other than the sums on deposit in the account; it is not essential that payment to the beneficiary be mentioned in the deposit agreement. A trust account does not include a regular trust account under a testamentary trust or a trust agreement, which has significance apart from the account, or a fiduciary account arising from a fiduciary relation such as attorney-client;

o . "Withdrawal" includes payment to a third person pursuant to check or other directive of a party; and

p. "Written notice or order" received by a financial institution is effective for a particular transaction from the time it is brought to the attention of the individual conducting that transaction.

L.1979, c. 491, s. 2.

17:16I-3. Ownership as between parties and others; protection of financial institutions The provisions of sections 4 to 6 concerning beneficial ownership as between parties, or as between parties and P.O.D. payees or beneficiaries of multiple-party accounts, are relevant only to controversies between these persons and their creditors and other successors, and have no bearing on the power of withdrawal of these persons as determined by the terms of account contracts. The provisions of sections 8 to 13 govern the liability of financial institutions who make payments pursuant thereto, and their setoff rights.

L.1979, c. 491, s. 3.

17:16I-3. Ownership as between parties and others; protection of financial institutions The provisions of sections 4 to 6 concerning beneficial ownership as between parties, or as between parties and P.O.D. payees or beneficiaries of multiple-party accounts, are relevant only to controversies between these persons and their creditors and other successors, and have no bearing on the power of withdrawal of these persons as determined by the terms of account contracts. The provisions of sections 8 to 13 govern the liability of financial institutions who make payments pursuant thereto, and their setoff rights.

L.1979, c. 491, s. 3.

17:16I-4. Ownership during lifetime Unless a contrary intent is manifested by the terms of the contract, or the deposit agreement, or there is other clear and convincing evidence of a different intent at the time the account is created:

a. A joint account belongs, during the lifetime of all parties, to the parties in proportion to the net contributions by each to the sums on deposit. In the absence of proof of net contributions, the account belongs in equal shares to all parties having present right of withdrawal. This subsection shall not be construed to affect the right of the court to effectuate an equitable distribution of property between the parties in an action for divorce pursuant to N.J.S. 2A:34-23.

b. A P.O.D. account belongs to the original payee during his lifetime and not to the P.O.D. payee or payees; if two or more parties are named as original payees, during their lifetimes rights as between them are governed by subsection a. of this section.

c. A trust account belongs beneficially to the trustee during his lifetime, and if two or more parties are named as trustee on the account, during their lifetimes beneficial rights as between them are governed by subsection a. of this section. If there is an irrevocable trust, the account belongs beneficially to the beneficiary.

L.1979, c. 491, s. 4.

17:16I-5. Right of survivorship a. Sums remaining on deposit at the death of a party to a joint account belong to the surviving party or parties as against the estate of the decedent unless there is clear and convincing evidence of a different intention at the time the account is created. If there are two or more surviving parties, their respective ownerships during lifetime shall be in proportion to their previous ownership interests under section 4 augmented by an equal share for each survivor of any interest the decedent may have owned in the account immediately before his death; and the right of survivorship continues between the surviving parties.

b. If the account is a P.O.D. account;

(1) On death of one of two or more original payees the rights to any sums remaining on deposit are governed by subsection "a" ;

(2) On death of the sole original payee or of the survivor of two or more original payees, any sums remaining on deposit belong to the P.O.D. payee or payees if surviving, or to the survivor of them if one or more die before the original payee; if two or more P.O.D. payees survive, there is no right of survivorship in the event of death of a P.O.D. payee thereafter unless the terms of the account or deposit agreement expressly provide for survivorship between them.

c. If the account is a trust account;

(1) On death of one of two or more trustees, the rights to any sums remaining on deposit are governed by subsection "a" ;

(2) On death of the sole trustee or the survivor of two or more trustees, any sums remaining on deposit belong to the person or persons named as beneficiaries, if surviving, or to the survivor of them if one or more die before the trustee, unless there is clear evidence of a contrary intent; if two or more beneficiaries survive, there is no right of survivorship in event of death of any beneficiary thereafter unless the terms of the account or deposit agreement expressly provide for survivorship between them.

d. In other cases, the death of any party to a multiple-party account has no effect on beneficial ownership of the account other than to transfer the rights of the decedent as part of his estate.

e. A right of survivorship arising from the express terms of the account or under this section, a beneficiary designation in a trust account, or a P.O.D. payee designation, cannot be changed by will.

L.1979, c. 491, s. 5.

17:16I-6. Determination of rights at death of party; alteration of form of account; notice or order to financial institution The provisions of section 5 as to rights of survivorship are determined by the form of the account at the death of a party. This form may be altered by written notice or order given by a party to the financial institution to change the form of the account or to stop or vary payment under the terms of the account. The order or request must be signed by a party, received by the financial institution during the party's lifetime, and not countermanded by other written order of the same party during his lifetime.

L.1979, c. 491, s. 6.

17:16I-7. Rights of creditors No multiple-party account will be effective against an estate of a deceased party to transfer to a survivor sums needed to pay debts, taxes, and expenses of administration, if other assets of the estate are insufficient. A surviving party, P.O.D. payee, or beneficiary who receives payment from a multiple-party account after the death of a deceased party shall be liable to account to his personal representative for amounts the decedent owned beneficially immediately before his death to the extent necessary to discharge the claims and charges mentioned above remaining unpaid after application of the decedent's estate. No proceeding to assert this liability shall be commenced unless the personal representative has received a written demand by a creditor, and no proceeding shall be commenced later than 2 years following the death of the decedent. Sums recovered by the personal representative shall be administered as part of the decedent's estate. This section shall not affect the right of a financial institution to make payment on multiple-party accounts according to the terms thereof, or make it liable to the estate of a deceased party unless before payment the institution has been served with an order of court restraining the payment.

L.1979, c. 491, s. 7.

17:16I-8.Multiple-party accounts; payments; notice 8. Financial institutions may enter into multiple-party accounts to the same extent that they may enter into single-party accounts. The following payments from a multiple-party account by the financial institution, including payment of the entire account balance, are deemed authorized by all parties to, and any other person with an interest in, the multiple-party account, without any duty on the part of the financial institution to consider the net contributions of the parties to the account:

a. Payments, on request, to any one or more of the parties;

b. Payments pursuant to any statutory or common law right of set off, levy, attachment or other valid legal process or court order, relating to the interest of any one or more of the parties; and

c. Payments, on request, to a trustee in bankruptcy, receiver in any state or federal insolvency proceeding, or other duly authorized insolvency representative of any one or more of the parties.

A financial institution shall not be required to inquire as to the source of funds received for deposit to a multiple-party account, or to inquire as to the proposed application of any sum withdrawn from an account, for purposes of establishing net contributions.

Notice that the entire account balance is subject to subsections b. and c. of this section shall be given to the parties by the financial institution, either in the account agreement or by separate document, in the manner the Commissioner of Banking may direct by regulation. Any account for which notice is not given shall not be subject to the terms of subsection b. or c. of this section.

L.1979,c.491,s.8; amended 1995,c.372. 17:16I-9. Financial institution protection; payment after death or disability; joint account Any sums in a joint account may be paid, on request, to any party without regard to whether any other party is incapacitated or deceased at the time the payment is demanded; but payment may not be made to the personal representative or heirs of a deceased party unless proofs of death are presented to the financial institution showing that the decedent was the last surviving party or unless there is no right of survivorship under section 5.

L.1979, c. 491, s. 9.

17:16I-10. Payment of P.O.D. account Any P.O.D. account may be paid, on request, to any original party to the account. Payment may be made, on request, to the P.O.D. payee or to the personal representative or heirs of a deceased P.O.D. payee upon presentation to the financial institution of proof of death showing that the P.O.D. payee survived all persons named as original payees. Payment may be made to the personal representative or heirs of a deceased original payee if proof of death is presented to the financial institution showing that his decedent was the survivor of all other persons named on the account either as an original payee or as P.O.D. payee.

L.1979, c. 491, s. 10.

17:16I-11. Payment of trust account Any trust account may be paid, on request, to any trustee. Unless the financial institution has received written notice that the beneficiary has a vested interest not dependent upon his surviving the trustee, payment may be made to the personal representative or heirs of a deceased trustee if proof of death is presented to the financial institution showing that his decedent was the survivor of all other persons named on the account either as trustee or beneficiary. Payment may be made, on request, to the beneficiary upon presentation to the financial institution of proof of death showing that the beneficiary or beneficiaries survived all persons named as trustees.

L.1979, c. 491, s. 11.

17:16I-12. Beneficial ownership of funds in multiple-party accounts a. Payment made pursuant to subsection b. of this section, or pursuant to section 8, 9, 10 or 11 of this act or section 89, 90 or 91 of P.L. 1963, c. 144 (C. 17:12B-89 through C. 17:12B-91) discharges the financial institution from all claims for amounts so paid, whether or not the payment is consistent with the beneficial ownership of the account as between parties, P.O.D. payees, or beneficiaries, or their successors. The protection here given does not extend to payments made after a financial institution has received written notice from any party able to request present payment to the effect that withdrawals in accordance with the terms of the account should not be permitted. Unless the notice is withdrawn by the person giving it, the successor of any deceased party must concur in any demand for withdrawal, if the financial institution is to be protected under this section. No other notice or any other information shown to have been available to a financial institution shall affect its right to the protection provided here. The protection here provided shall have no bearing on the rights of parties in disputes between themselves or their successors concerning the beneficial ownership of funds in, or withdrawn from, multiple-party accounts. Financial institutions refusing or altering payment pursuant to written notice or order from any party able to request present payment shall not be liable to any other party to the account, or beneficiary thereof, by reason of such action.

b. When a beneficiary of a trust account, or a P.O.D. account payee, is under the age of 18 when the beneficiary or payee becomes entitled to payment as provided in this act, a state or federally chartered bank or savings bank in which the trust account or P.O.D. account is maintained shall make such payment (1) if a certificate of appointment of a guardian is filed with the bank or savings bank, to the guardian of the estate or to the guardian of the beneficiary or payee; or (2) if a certificate of appointment of a guardian is not filed with the bank or savings bank, the bank or savings bank shall prioritize payment as follows: (a) to the beneficiary or payee, if married; (b) to a parent or parents of the beneficiary or payee or to any person having the care and custody of the beneficiary or payee, with whom the beneficiary or payee resides; or (c) to the beneficiary or payee, when the beneficiary or payee attains the age of 18.

L. 1979, c. 491, s. 12. Amended by L. 1986, c. 171, s. 1, eff. Dec. 4, 1986.

17:16I-13. Setoff Without qualifying any other right to setoff or lien and subject to any contractual provision, if a party to a multiple-party account is indebted to a financial institution, the financial institution has a right to setoff against the account in which the party has or had immediately before his death a present right of withdrawal. The amount of the account subject to setoff is that proportion to which the debtor is, or was immediately before his death, beneficially entitled, and in the absence of proof of net contributions, to an equal share with all parties having present rights of withdrawal.

L.1979, c. 491, s. 13.

17:16I-14. Effect of transfer by right of survivorship Any transfers resulting from the application of section 5 are effective by reason of the account contracts involved and this act, and are not to be considered as testamentary. The right of any surviving party to a joint account, or of any beneficiary, or of any P.O.D. payee, to the sums on deposit on the death of any party to a multiple-party account maintained in any financial institution, shall not be denied, abridged or in anywise affected because such right has not been created by a writing executed in accordance with the laws of this State prescribing the requirements to effect a valid testamentary disposition of property.

Copyright 2016 Vercammen Law

2A :15-12.  Record and index of notices;  access to

    Except as provided by section 2A :15-9 of this title, the county clerk or register of deeds and mortgages, with whom a notice of lis pendens is filed, shall forthwith record the same, with the time of the filing thereof, in a proper book provided and kept by him in his office.  The record book shall be properly indexed, and shall be a public record, to which persons desiring to examine the same shall have access.

2A :15-11.   Notice of lis pendens    max five years Notice of  lis pendens.  No notice of lis pendens shall be effective after five years from the date of its filing.

2A :15-10. Discharge of lis pendens of record when action not prosecuted

2A :15-10.  Discharge of lis pendens of record when action not prosecuted

    If plaintiff in an action as to which a notice of lis pendens has been filed  as herein required fails to prosecute the same diligently, the court wherein  the action is pending may, for such cause or for other good cause shown, by  order direct the county clerk or register of deeds and mortgages, as the case  may be, to discharge the lis pendens of record.

2A :15-8. Rights of bona fide purchasers, mortgagees or lienors before notice filed and prior to final judgment

2A :15-8.  Rights of bona fide purchasers, mortgagees or lienors before notice filed and prior to final judgment   Unless and until a notice of lis pendens is filed as herein provided, no action, as to which such notice is required, shall, before final judgment entered therein, be taken to be constructive notice to a bona fide purchaser or  mortgagee of, or a person acquiring a lien on, the affected real estate.

   L.1951 (1st SS), c.344.

Lis pendens 2A :15-7 Filed notice; effect as to persons claiming interest in real estate affected by notice

2A :15-7 Filed notice;  effect as to persons claiming interest in real estate affected by notice

    a.  In action to enforce or declare rights in, or concerning, or for partition of real estate, wherein plaintiff's claim arises out of a written instrument, which instrument either is executed by defendant and identifies such real estate or appears of record with respect to the title thereto, from and after the filing of a notice of lis pendens, any person claiming title to, interest in or lien upon the real estate described in the notice through any defendant in the action as to which the notice is filed shall be deemed to have  acquired the same with knowledge of the pendency of the action, and shall be  bound by any judgment entered therein, as though he had been made a party  thereto and duly served with process therein.

    b.  In an action other than one specified in subsection a. of this section,  if a notice of lis pendens is filed, that notice shall have the same effect as  provided in subsection a., until the entry of a determination by the court  pursuant to this subsection.  When a notice of lis pendens is filed in such an  action, the plaintiff shall, within three days after the filing of the notice  of lis pendens, serve upon the defendant a copy of the notice of lis pendens  and of the complaint.  Any party claiming an interest in the real estate  affected by the notice of lis pendens may, at any time thereafter, file with  the court, in accordance with the Rules Governing the Courts of the State of  New Jersey, except as otherwise provided herein, a motion for a determination  as to whether there is a probability that final judgment will be entered in  favor of the plaintiff sufficient to justify the filing or continuation of the  notice of lis pendens.  The plaintiff shall bear the burden of establishing  such probability.  The court shall, after hearing and within 10 days, enter a determination as to whether there is a sufficient probability that final judgment will be entered in favor of the plaintiff.  If the court determines that there is a sufficient probability of final judgment in favor of the plaintiff, the notice of lis pendens shall be continued of record and shall have the same effect as provided in subsection a.  If the court fails so to determine, the court shall forthwith order the notice of lis pendens discharged  of record.

IN THE MATTER OF THE ESTATE OF VALMORE J. FORGETT, JR.,

IN THE MATTER OF THE
ESTATE OF VALMORE J.
FORGETT, JR.,
     Deceased.
_________________________

                Argued April 2, 2019 – Decided September 3, 2019

                Before Judges Yannotti, Rothstadt and Natali.

                On appeal from the Superior Court of New Jersey,
                Chancery Division, Passaic County, Docket No. P-
                183801.
NOT FOR PUBLICATION WITHOUT THE
                           APPROVAL OF THE APPELLATE DIVISION
    This opinion shall not "constitute precedent or be binding upon any court." Although it is posted on the
 internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.




                                                     SUPERIOR COURT OF NEW JERSEY
                                                     APPELLATE DIVISION
                                                     DOCKET NO. A-0443-17T4

PER CURIAM
       In this dispute over the distribution of the decedent Valmore J. Forgett

Jr.'s assets, Lisa Farina, a general judgment creditor of the estate, appeals from

the Chancery Division's August 17, 2017 order approving the final accounting

filed by the decedent's executors and awarding attorney's fees and executors'

commissions. She also appeals from earlier orders entered by the trial court in

2015, dismissing all but two of the exceptions she filed to a prior accounting,

and in 2016 dismissing her complaint to remove the Estate's co-executors.

Farina's exceptions and arguments related to the trial court's 2004 approval of a

stock purchase agreement (SPA) between the Estate and one of the co-executors,

the decedent's son, and her contention that her claim had priority over all

creditors.

      On appeal, Farina argues that the trial court erred by failing to recognize

her claim's priority over all of the Estate's other creditors, including the Internal

Revenue Service (IRS); by rejecting her claim that the SPA should be set aside

because it was the result of a breach of a fiduciary duty and fraud; and, by

concluding that she was "bound by the court approval of the [SPA]." Finally,

Farina challenges the trial court's award of executors' commissions and attorneys

fees because they were incurred in furtherance of the alleged breach of a

fiduciary duty. We find no merit to these contentions and affirm, substantially


                                                                             A-0443-17T4
                                         2
 for the reasons expressed by the judges who addressed Farina's claims in their

written and oral decisions that accompanied the orders under appeal.

      The nature of Farina's challenges require that we recite in detail the long

and tortuous history of her pursuit of payment from the Estate as derived from

the record. The decedent died in 2002 and his will named his son, Valmore J.

Forgett III (Val III), and a friend, Raymond Bentley, as co-executors of his

estate.

      During his lifetime, the decedent owned and operated Service Group, Ltd.

(Service Group) which had several subsidiaries, including Navy Arms Company

(Navy Arms). At one point, Gibbs Rifle Company, Inc. (Gibbs), which was

owned in part by Val III, was a selling agent for Navy Arms. The decedent also

owned a commercial building in Union City, an investment account with PNC

Bank (PNC), and a loan receivable from Gibbs. At the time of his death, the

decedent's liabilities included loans owed to PNC that were secured by liquid

assets and by a mortgage on the Union City property, and personal income taxes

for 2002.

      In early 2003, Citrin Cooperman & Company, LLP (Citrin) prepared

financial statements for Service Group for the six-month period ending in




                                                                         A-0443-17T4
                                       3
 December 2002. The report stated that the company incurred net losses of about

$712,000 and that its liabilities exceeded the total assets by $1,771,000.

      Prior to the decedent's demise, in 2000, Farina was an employee of Navy

Arms. She filed a workers' compensation claim against her employer after

falling in an uninsured parking lot owned by the decedent individually. She

filed her complaint against decedent on October 4, 2002 and amended it to

include the Estate following his death. On May 27, 2005, she obtained a

judgment of $230,850 against the Estate.

      In addition to Farina, the decedent's second wife, Eleanor Seifert, also

initially maintained a claim against the Estate. Prior to their marriage, in 1997

Seifert and the decedent signed a prenuptial agreement, which contained a

provision that provided Seifert would receive "$50,000 per year" as continued

spousal support upon the decedent's passing. In May 2003, Seifert filed a

complaint against Val III and the Estate, alleging that Val III was in breach of

his fiduciary duty and was engaged in self-dealing, causing the Estate "to be

without funds with which to meet its obligations . . . ." In November 2003, the

Estate, Seifert, and Val III entered into a settlement agreement in which Val III

individually agreed to settle Seifert's claim against him and the Estate for

$400,000. In response to a motion filed by Seifert, on January 23, 2004, Judge


                                                                             A-0443-17T4
                                        4
 Burrell I. Humphreys approved the settlement after he found that there was no

opposition to the settlement and it was reasonable.

       Prior to Judge Humphreys' approval of the settlement agreement, Val III

pursued the SPA allegedly in order to satisfy a claim against the Estate made by

PNC. At the time, Service Group's and Navy Arms' obligations to PNC that the

decedent had personally guaranteed were in default and the Estate attempted to

find a buyer for Navy Arms. PNC had commenced two actions, one seeking to

foreclose its mortgage on the Union City property and the other seeking to take

inventory and assets from Navy Arms in which it had a security interest. When

the Estate could not find a buyer for Navy Arms, Val III offered to purchase the

stock for nominal value and assume the debt owed to PNC. The SPA provided

that Val III would pay the Estate $100 for the Service Group shares as well as

pay PNC "the sum of all principal, accrued interest and expenses thereon in full

satisfaction . . . ."

       On January 2, 2004, Bentley filed a complaint seeking "advice and

direction from the court approving" the Estate's sale of its shares in Service

Group to Val III. The complaint disclosed the allegations made by Seifert in her

complaint and that the settlement of those claims was pending at the time. It

also referred to the poor financial circumstances of the Estate. A copy of the


                                                                        A-0443-17T4
                                       5
 SPA was attached to the complaint, which was served on Farina, whose claim

was also pending at that time. Farina did not challenge the proposed SPA. Judge

Humphreys approved the SPA on March 8, 2004, after he noted that no

opposition papers were filed by any party. The judge signed an order stating

"this order close[d] the case in the Chancery Division."

       In addition to having Val III through the SPA assume the then-

approximately $100,000 debt owed to PNC, the Estate sought approval for the

sale of the Union City property, which was encumbered by a mortgage held by

PNC.    Farina received notice of the proposed sale and the application for

approval. She did not file any opposition to the application.

       Judge Margaret Mary McVeigh entered an order approving the sale on

June 22, 2004. The property was sold for $611,000 on August 12, 2004. The

net proceeds totaled $561,494.29, with $130,798.03 being paid to PNC to

discharge the mortgage even though Val III assumed that debt. The Estate

applied the amount it paid to PNC from the sale to reduce the amount payable

to Val III as the assignee of Seifert's claims that the Estate valued to be in excess

of $1,000,000. After the payment to PNC, the Estate netted approximately

$400,000 from the sale.




                                                                             A-0443-17T4
                                         6
          As to amount owed to the IRS, the Estate retained Citrin in October 2003

to prepare and file the decedent's 2002 tax returns. Those returns indicated that

$33,050 was owed to the State on taxable income of $757,090, and $127,383 to

the IRS on taxable income of $762,939. At the time of filing, Citrin found that

the Estate did not have sufficient assets to pay the outstanding amount owed for

taxes.

         In 2005, the Estate hired Wiss & Company, LLP (Wiss) to provide a

second opinion about whether the losses and negative financial condition of

Service Group would impact the income taxes owed to the State and IRS. Wiss

concluded that the financial condition of Service Group as of December 2002

rendered a $2,434,463 loan owed to decedent by the company worthless. On

December 15, 2002, Wiss prepared an amended state income tax return, showing

no taxable income due to the loss of the written-off loan. It calculated that the

Estate was entitled to a state income tax refund of $13,050. Ultimately, the State

issued a refund of $8,229.83.

         Wiss filed an amended federal income tax return that also showed no

taxable income because of the uncollectable loan. It claimed that the Estate was

entitled to a refund of $28,827. The IRS disagreed and claimed the Estate owed

$127,383, as previously calculated, not including penalties or interest.


                                                                           A-0443-17T4
                                         7
       Neither PNC, the IRS, nor Farina took any action between 2005 and 2010

towards collecting any of the amounts owed to them by the Estate.

      Against this backdrop, in 2011, Farina began to pursue the collection of

the judgment she obtained against the Estate in 2005. After receiving documents

in response to an information subpoena issued to the Estate, in December 2012,

Farina filed a complaint seeking damages and equitable relief against Val III,

Bentley, and the Estate's attorneys for their alleged roles in diverting assets from

the Estate.

      Among the relief she sought in her complaint, Farina demanded that the

2004 approval of the SPA be set aside as it was a fraudulent conveyance under

N.J.S.A. 25:2-25 and that her judgment had priority over other the claims of

other creditors. However, after Judge McVeigh entered an order to show cause

on December 27, 2012, Farina voluntarily dismissed the complaint.

      Despite the dismissal, the judge directed the Estate to file a verified

complaint for judgment of insolvency and instructions. At the time, the Estate

owed money to the IRS, Farina, and Val III, the latter of whom had already

withdrawn from participating as a co-executor in matters that were central to the

Estate's administration.




                                                                            A-0443-17T4
                                         8
       The Estate filed its complaint on April 30, 2013 seeking approval of its

accounting, instructions as to certain issues, and an award of administrative,

accounting and counsel fees.      Farina responded with her exceptions to the

accounting by again alleging that Val III breached his fiduciary duty and that he

and the Estate conspired to commit fraud in order to divert funds. Farina also

alleged that her claim against the Estate had priority because she filed the

complaint upon which her judgment against the Estate was based before the

decedent's death.

      In its response to Farina's contentions, the Estate maintained that Farina

and her counsel had an open offer to examine its files and asserted that Farina

was notified when the Estate applied to the court for approval of the SPA but

she never responded or otherwise objected to the application. Farina asserted

that she did not object to the application for approval because she was told that

the SPA would not affect the Estate's ability to pay her and she relied on such

statements. She also claimed she did not receive all the information requested

from the Estate regarding its ability to pay.

      On May 12, 2014, Farina filed a motion for partial summary judgment

seeking an adjudication that her claim was superior to the claims of other

creditors and an order directing Val III to pay his obligation to the Estate. In a


                                                                          A-0443-17T4
                                        9
 supporting certification, Farina's counsel asserted that his client was first

informed that there may not be enough funds to pay her claim in 2011.

      After considering the parties' oral arguments in July 2014, on January 29,

2015, Judge McVeigh granted the Estate's motion to dismiss Farina's exceptions

and on April 30, 2015, dismissed the exceptions with prejudice, except for two

of them.1 In her accompanying written decision, the judge found that under Rule

4:50, there was no legal basis established and no facts provided to substantiate

allegations that in 2004 Judge Humphreys abused his discretion or was misled

when he approved the SPA. She found that he properly considered all issues

before him during his consideration of Val III's settlement with Seifert and the

SPA. Judge McVeigh specifically noted that there were no expert reports

supporting any allegation made by Farina regarding the financial condition of

the Estate or her claim of fraud. Judge McVeigh denied a subsequent motion

for reconsideration and reserved decision on the Estate's request for an interim

award of counsel fees in the amount of $210,088.




1
  The two exceptions related to the Estate's decision to charge Val III's claim
with the amount it paid to PNC rather than require him to pay the amount
himself, and whether an administrative claim for reimbursement he made was
valid.
                                                                        A-0443-17T4
                                      10
       On August 14, 2015, Judge McVeigh awarded the Estate's attorneys

$39,483.75. The judge issued a written decision in which she found that Val III

still owed the Estate the $155,798 it paid to PNC, and that his administrative

claim was not valid. The judge also required a proposed distribution plan for

the Estate's remaining assets be filed. She later denied Val III's motion for

reconsideration of that order.

      On February 9, 2016, the Estate filed an amended verified final

accounting. In support of its application, it detailed claims for payment being

made by its counsel, the co-executors, the IRS, Farina and Val III. It explained

that under N.J.S.A. 3B:22-2, Farina was not a judgment creditor because her

judgment was obtained after decedent's death, rendering her a general claimant.

Farina initially responded by filing a complaint seeking the appointment of a

new executor to replace Val III and Bentley.

      After considering the parties' oral arguments on March 23, 2016, Judge

McVeigh denied Farina's application. In an oral decision placed on the record,

the judge concluded that Farina was a general judgment creditor and did not

have "extraordinary interest in what happened to this estate . . . ." She found

that removing Bentley as the "only functioning executor . . . would be gross

incompetence . . . ."


                                                                        A-0443-17T4
                                      11
       After Farina filed her exceptions to the Estate's amended final accounting,

the parties once again appeared for oral argument on April 22, 2016. After

considering the parties' contentions, the judge again found that Farina was a

judgment creditor of the Estate, not entitled to priority over the IRS. The judge

stated that the "IRS stands before everybody," even though, as Farina argued,

under 26 U.S.C. § 6323, the IRS did not file a notice of federal tax lien . Judge

McVeigh ordered the Estate to file another amendment to its accounting, which

it did on August 5, 2016. In the accounting, the Estate indicated that it owed

$2,027,745.38 in liabilities, including the amount owed to Val III, but only had

$273,927.14 in assets, providing a breakdown of its proposed distribution.

Farina again filed exceptions.

      The parties appeared before Judge Bruno Mongiardo2 for oral argument

on the final accounting on August 10, 2017, before he issued his August 17,

2017 order approving the final accounting for the reasons stated in his written

decision issued on the same date. The judge concluded that the Estate's legal

fees had first priority under N.J.S.A. 3B:22-2(b). He noted that the exceptions

that Judge McVeigh did not dismiss were unrelated to legal fees and stated "[a]n



2
  Judge Mongiardo was assigned to the matter after Judge McVeigh retired in
2016.
                                                                         A-0443-17T4
                                      12
 attorney's entitlement to be paid for services rendered is not merely a contractual

right but also a professional right." He found that that there was no legitimate

issue or dispute about the attorney's "time spent, hourly rates, or the

reasonableness or necessity of the charges for legal services" and that since

2013, most of the time expended was focused on addressing Farina's exceptions.

As to the executors' commissions, the judge cited to N.J.S.A. 3B:18-24 and -25

and observed that no prior court found that Val III engaged in behavior that

would justify depriving of the commission he was owed.

      Judge Mongiardo also concluded that the IRS was entitled to the balance

of the Estate's cash after all expenses were paid, including legal fees and

executor commission fees, assuming there were assets left. He too found that

Farina was not a judgment lien creditor entitled to any priority because her claim

was against the Estate, not the decedent. He noted that Judge McVeigh already

ruled on the matter of priority and reiterated that the IRS had a superior claim

to Farina's.

      The order entered by Judge Mongiardo on the same declared the Estate to

be insolvent and directed that the $273,927.14 in cash that the Estate had be

distributed pursuant to N.J.S.A. 3B:22-2. Specifically, the order approved a

previously made payment of $15,478.87 to the Passaic County Surrogate,


                                                                           A-0443-17T4
                                       13
 directed that Bentley be paid $5,412.16 for co-executor commissions, the

Estate's attorneys be paid $208,531.84 in legal fees and expenses, and that a

payment of $44,504.27 be made to the IRS for partial payment of the outstanding

taxes. The order also provided that the amount owed by Val III to the Estate be

reduced by $20,412.16, in order to satisfy Val III's co-executor fees. The order

also stated that the IRS's claim had priority of all other claimants, but noted there

were not enough assets to pay the entire claim. This appeal followed.

      "The scope of appellate review of a trial court's fact-finding function is

limited" because "findings by the trial court are binding on appeal when

supported by adequate, substantial, credible evidence." Cesare v. Cesare, 

154 N.J. 394

, 411-12 (1998). We decline to disturb "factual findings and legal

conclusions of the trial judge unless . . . convinced that they are so manifestly

unsupported by or inconsistent with the competent, relevant and reasonably

credible evidence as to offend the interests of justice." Rova Farms Resort, Inc.

v. Inv'rs Ins. Co., 

65 N.J. 474

, 484 (1974) (quoting Fagliarone v. Twp. of N.

Bergen, 

78 N.J. Super. 154

, 155 (App. Div. 1963)).             On the other hand,

challenges to legal conclusions are subject to our de novo review. Estate of

Hanges v. Metro Prop. & Cas. Ins. Co., 

202 N.J. 369

, 382-83 (2010).




                                                                             A-0443-17T4
                                        14
       At the outset, we address what we consider to be the lynchpin to all of

Farina's contentions on appeal. Specifically, Farina argues that her judgment

was superior to all other creditors and that despite having received notice of the

Estate's application for approval of the SPA in 2004, she was entitled to raise a

challenge to it beginning in 2011.     We find no merit to these contentions

substantially for the reasons expressed by Judge McVeigh and Judge Mongiardo

in their thorough written and oral decisions.      We add only the following

comments.

      The appropriateness of the SPA under the circumstances that existed at

the time were considered by Judge Humphreys after notice to Farina. Bentley

properly filed a complaint for instructions because of Val III's involvement. "An

executor has the right to apply to the courts for direction and guidance in the

performance of the duties of his office or trust when he is in doubt as to the

extent of his powers and duties or as to the proper manner in which to proceed."

Fid. Union Tr. Co. v. Heller, 

16 N.J. Super. 285

, 292 (Ch. Div. 1951); see also

7 N.J. Practice, Wills and Administration § 1116 (Alfred C. Clapp & Dorothy

G. Black) (rev. 3d ed. 2019). Once Judge Humphreys decided that the SPA was




                                                                          A-0443-17T4
                                       15
 bona fide, Farina was barred by N.J.S.A. 3B:14-363 from raising a challenge to

the judge's approval, absent circumstances warranting the vacating of Judge

Humphreys' judgment under Rule 4:50-1. When Farina attempted to raise a

challenge to that approval, Judge McVeigh found that there was no evidence of

any reason to vacate the 2004 approval. Her conclusion was supported by the

evidence in the record.

       In any event, and regardless of the bona fides of the SPA, Farina's repeated

contention that her judgment had priority over all creditors, including the IRS,

is without merit because it is legally incorrect. N.J.S.A. 3B:22-2 sets forth the

order of claimants to which an estate's personal representative shall make

payments where "assets of the estate are insufficient to pay all claims . . . ."


3
    N.J.S.A. 3B:14-36 states:

              Any sale or encumbrance to the fiduciary, his spouse,
              agent or attorney, or any corporation or trust in which
              he has a substantial beneficial interest, or any
              transaction which is affected by a substantial conflict
              of interest on the part of the fiduciary, is voidable by
              any person interested in the estate except one who has
              consented after fair disclosure, unless:

              a. The will or a contract entered into by the decedent
              expressly authorized the transaction; or

              b. The transaction is approved by the court after notice
              to interested persons.
                                                                           A-0443-17T4
                                        16
 According to the statute, "debts and taxes" have priority over a creditor who

obtained a judgment against a decedent before his or her death, and those

creditors have priority over those who obtained a judgment against an estate or

personal representative. "A judgment against an executor[ or] administrator

. . . unlike a judgment against [a] decedent in his lifetime, is not entitled to a

preference over other claims payable out of the assets of the decedent's estate."

7 N.J. Practice, Wills and Administration § 1283 (Alfred C. Clapp & Dorothy

G. Black) (rev. 3d ed. 2019). See also Ward v. Kaycoff, 

9 N.J. Misc. 498

 (1931)

(noting that for judgments to be preferred, they must be actually entered during

decedent's lifetime); 7 N.J. Practice, Wills and Administration § 1279 (Alfred

C. Clapp & Dorothy G. Black) (rev. 3d ed. 2019). In fact, in cases such as

Farina's where the defendant dies during the litigation, our rules do not permit a

judgment to be entered against the decedent where the claim is not extinguished

by his or her death. See N.J.S.A. 2A:15-4 (eliminating the common law bar

against post-mortem suits and permitting actions against a decedent's estate);

see also R. 4:34-1(b) (addressing the substitution of representatives for deceased

parties to a litigation); Long v. Landy, 

35 N.J. 44

, 53 (1961).

   Also without merit is Farina's contention that the IRS was required to file

notice of its claim under 26 U.S.C. § 6323 in order to have priority over her


                                                                          A-0443-17T4
                                       17
 claim. 26 U.S.C. § 6321 states that, "[i]f any person liable to pay any tax

neglects or refuses to pay the same after demand, the amount . . . shall be a lien

in favor of the United States upon all property and rights to property, whether

real or personal, belonging to such person." 26 U.S.C. § 6323(a) provides that

"[t]he lien imposed by section 6321 shall not be valid as against any purchaser,

holder of a security interest, mechanic's lienor, or judgment lien creditor until

notice thereof which meets the requirements of subsection (f) has been filed by

the Secretary." (Emphasis added).

   Because Farina never had a judgment against decedent, she had no lien

against his property prior to his death and was therefore a general claimant of

the Estate. See N.J.S.A. 2A:17-17 ("no real estate of any testator or intestate

shall be sold or in anywise affected by any judgment or execution against

executors or administrators"). With or without filing its lien, the IRS would thus

have priority over Farina's judgment under N.J.S.A. 3B:22-2(d).

      We also conclude that Farina's challenge to the award of commissions and

fees to the co-executors and the Estate's attorneys is without merit. We review

those awards for a "clear abuse of discretion," only "disturb[ing] a fee

determination . . . 'on the rarest of occasions . . . .'" Jacobs v. Mark Lindsay &

Son Plumbing & Heating, Inc., 

458 N.J. Super. 194

, 206 (App. Div. 2019)


                                                                          A-0443-17T4
                                       18
 (quoting Packard-Bamberger & Co. v. Collier, 

167 N.J. 427

, 444 (2001)); see

also In re Estate of Summerlyn, 

327 N.J. Super. 269

, 272 (App. Div. 2000)

(quoting In re Estate of Moore, 

50 N.J. 131

, 149 (1967)) (addressing review of

awards of commissions).

      Here, Farina never pursued any challenge to the calculation of the Estate's

attorney's fees or the commissions awarded. Her only challenge was based upon

her allegation that Val III engaged in impermissible self-dealing through an

alleged conspiracy with counsel and Bentley. Both judges who considered her

claims found them to be without merit. We conclude that their findings were

supported by the evidence and their legal conclusions were correct. Because

Farina's allegations failed to establish any abuse of discretion in either the fee

award or the award of commissions, we have no reason to disturb the challenged

awards.

      Finally, to the extent that we have not specifically addressed any of

Farina's remaining arguments, we find them to be without sufficient merit to

warrant discussion in a written opinion. R. 2:11-3(e)(1)(E).

      Affirmed.