Accounting in Probate Estate

NJ Court Rule 4:87 Probate Accountings, Actions for the Settlement of Accounts
(a) Actions to settle the accounts of executors, administrators, testamentary trustees, non-testamentary trustees, guardians and assignees for the benefit of creditors shall be brought in the county where such fiduciaries received their appointment. The action shall be commenced by the filing of a complaint in the Superior Court, Chancery Division, and upon issuance of an order to show cause pursuant to R. 4:83. A non-testamentary trustee shall annex to the complaint a copy of the written instrument creating the trust and stating its terms. The order to show cause shall state the amount of commissions and attorneys fee, if any, which are applied for. (b) An action may be commenced by an interested person to compel a fiduciary referred to in paragraph (a) of this rule to settle his or her account, and, in appropriate circumstances, to file an inventory and appraisement. Note: Source-R.R. 4:105-1, 4:105-2, 4:105-4(a)(b), 5:3-6(a)(b). Former R. 4:86-1, 4:86-2 and 4:86-3 deleted and new R. 4:87-1 adopted June 29, 1990 to be effective September 4, 1990. 4:87-2. Complaint

The complaint in an action for the settlement of an account (a) shall contain the names and addresses of all persons interested in the account, including any surety on the bond of the fiduciary, specifying which of them, if any, are minors or mentally incapacitated persons, the names and addresses of their guardians, or if there is no guardian then the names and addresses of the parents or persons standing in loco parentis to the minors; (b) shall specify the period of time covered by the account and contain a summary of the account. The summary shall state, all as shown by the account: (1) in the case of a first accounting, the amount for which the accountant was chargeable as of the date the trust or obligation devolved upon him or her, or where an inventory is on file, the amount of the inventory; or in the case of a second or later accounting, the balance remaining in the hands of the accountant as shown in the last previous account; (2) the amount for which the accountant became chargeable in addition thereto; (3) the total of the first two items; (4) the amount of the allowances claimed in the account; and (5) the balance in the accountants hands. Charges and allowances sought on account of corpus and income shall be stated separately both in the summary and in the account; (c) shall have annexed thereto the account which shall be dated; (d) shall ask for the allowance of the account, and also for the allowance of commissions and a fee for the accountants attorney, if accountant intends to apply therefor; and (e) shall be filed at least 20 days prior to the day on which the account is to be settled.http://www.njlaws.com/probate_account...

Removing an Executor of a Probate Estate, Removing Administrator

Removing an Executor of a Probate Estate, Removing Administrator

by Kenneth A. Vercammen, Esq.

Under New Jersey Law, the people selected as an executor of a Will have numerous legal responsibilities following the death of the person who signed the Will. Primarily, they have a duty to probate the Will, liquidate assets, pay bills and taxes, file all necessary court and tax returns, and then distribute the assets to beneficiaries. If there is no will, someone can petition the surrogate to be appointed as "administrator" of the estate.

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.
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 $225-$350 per hour, with a retainer of $3000 needed. Attorneys will require the retainer to be paid in full up front.
http://www.njlaws.com/removing_the_executor_of_an_estate.htm

Codicil to a Will

Codicil to a Will
A written revision to a Will is called a Codicil. An individual can have a Codicil to his or her Will as long as the codicil meets certain requirements. The codicil must be signed and witnessed just as the original Will was signed and witnessed. The codicil should refer to original Will by date and should be attached to the original Will. It is not recommended that an individualattempt to draft a codicil. A Codicil should only be draftedby an attorney to insure that it will have its intended effect. If thereare numerous changes to the Will, it is a good idea to have a new will drawn up and executed.
http://www.njlaws.com/codicil_to_a_wi...
KENNETH VERCAMMEN & ASSOCIATES, PC
ATTORNEY AT LAW
2053 Woodbridge Ave.
Edison, NJ 08817

Post Will Instructions

Post Will Instructions to Clients

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


We have given the client the Original signed Will to take home. The client should advise the Executors where the original Will is going to be stored. Additionally, they should provide the Executor with our business card and instruct the Executor to contact us prior to going to the Surrogates Office or probating a Will. If they have a Living Will, please be sure to give a copy to their doctor.


If they ever want to discuss the Will with me, I will be happy to do this with the client at any time after scheduling an appointment.


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


This periodic review program should not prevent the client from considering the making of a change in their Will at any earlier date. Changes should be made whenever the client believes such changes are necessary. A persons family, property and wishes may change over the years and for these and other reasons the client should re-examine their Will from time to time in order to make sure that it will carry out their present wishes.


I caution the client against making any marks upon their original Will because this can lead to a Will contest. If the client wants to make a change in their Will, they should contact my office and we will either make a Codicil (a short addition) to their Will or a new Will depending upon their needs and wishes.


In the event that a death occurs in their family, may I suggest that the client contact my office immediately in order to determine what, if anything, must be done in order to settle that persons estate. I also suggest that the client instruct their Executor and the members of their family to contact my office immediately, in the event of their death, in order to determine what, if anything, must be done to settle their estate.
http://www.njlaws.com/postwillinstruc...

Wills & Estate Planning in NJ

WILLS AND ESTATE PLANNING
"SAVE MONEY AND PROVIDE FOR YOUR LOVED ONES "
By Kenneth A. Vercammen, Esq.
IF YOU HAVE NO WILL:
If you leave no Will or your Will is declared invalid because it was improperly prepared or is not admissible to probate:
* State law determines who gets assets, not you
* Additional expenses will be incurred and extra work will be required to qualify an administrator
* Judge determines who gets custody of your children
* Possible additional State inheritance taxes and Federal estate taxes
* If you have no spouse or close relatives the State may take your property
* The procedure to distribute assets becomes more complicated-and the law makes no exceptions for persons in unusual need or for your own wishes.
* It may also cause fights and lawsuits within your family
When loved ones are grieving and dealing with death, they shouldn’t be overwhelmed with Financial concerns. Careful estate planning helps take care of that.
A Will must not only be prepared within the legal requirements of the New Jersey Statutes but should also be prepared so it leaves no questions regarding your intentions.


WHY PERIODIC REVIEW IS ESSENTIAL

Even if you have an existing Will, there are many events that occur which may necessitate changes in your Will. Some of these are:




* Marriage, death, birth, divorce or separation affecting either you or anyone named in your Will

*Significant changes in the value of your total assets or in any particular assets, which you own




* A change in your domicile




* Death or incapacity of a beneficiary, or death, incapacity or change in residence of a named executor, trustee or guardian of infants, or of one of the witnesses to the execution of the Will

*Annual changes in tax law The cost of a Will depends on the size and the complexity of the estate and the plans of the person who makes the Will. A properly drawn Simple Will without Trust costs approximately $200.00 to $500.00. It is one of the most important documents you will ever sign, and may be one of the best bargains you will ever have.
Be sure your Will takes into account the Federal Tax changes and New Jersey Inheritance Tax changes. Also, ascertain if your Will is “self-proving”, which would dispense with having to find the Will’s witnesses after death.

WHAT IS A WILL?

“A Will is a Legal written document which, after your death, directs how your individually owned property will be distributed, who will be in charge of your property until it is distributed and who will take care of your minor children if the other parent should die ". You should remember that the term “property” under the law includes "real estate as well as other possessions and rights to receive money or items of value.” Everyone who has at least $3,000 in assets should have a Will. You do not have to be wealthy, married, or near death to do some serious thinking about your Will.


ADMINISTRATION OF AN ESTATE

If you are named the executor or executrix, you must visit the County Surrogate to probate the Will. You will need the following items:
1. The Death Certificate
2. The Original Will
3. Names and Addresses of decedent's, next of kin and list of beneficiaries
4. Minimum of $80.00 for Surrogate fees

A NJ state inheritance tax return must be filed and the tax paid on the transfer of real or personal property within eight months after death.

OTHER ITEMS OF CONCERN TO BE PREPARED BY YOUR ATTORNEY
-Trusts (and Medicare Trusts)
-Power of Attorney- to allow a trusted person to administer your assets during your lifetime, either upon disability or now
-Living Wills- to state your wishes concerning medical care in the event of your serious illness

Kenneth A. Vercammen is a Middlesex County trial attorney who has published 125 articles in national and New Jersey publications on litigation topics. He has been selected to lecture to trial lawyers by the American Bar Association, New Jersey State Bar Association and Middlesex County Bar Association. Call our office to schedule a confidential appointment 732-572-0500

Duty of Executor of Probate Estate

Other upcoming 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 will handle)
If charity, notice to Atty General

File notice of Probate with Surrogate (Attorney will handle)

File first Federal and State Income Tax Return [CPA- ex Marc Kane]

Prepare Inheritance Tax Return and obtain Tax Waivers (Attorney will handle)

File waivers within 8 months upon receipt (Attorney will handle)

Prepare Informal Accounting

Prepare Release and Refunding Bond (Attorney will handle)
 
Obtain Child Support Judgment clearance (Attorney will handle)

 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 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.
http://www.njlaws.com/executor-duties_and_responsibilties.html

2015 Update Wills and Estate Planning by Kenneth Vercammen

2015 update Wills and Estate Planning Seminar
By Kenneth Vercammen
1. Federal Estate Tax exemption increased to $5,430,000 in 2015 so no Federal Estate Tax. However, New Jersey taxes estates over $675,000

2. Gifts permitted without Federal Estate & Gift tax remains at $14,000 per person.

3. We recommend Self- Proving Wills since witnesses to Will often move or pass away

4. Non-formal writings could be Wills under the Probate Law

5. Undue influence: Recent cases can void Will signed under suspicious circumstances
6. NJ Inheritance tax
7. Power of Attorney
8. Federal Health Privacy Law (HIPAA)
9. Competency required to sign a Will or Power of Attorney
10. Taxpayer relief act
1. Federal Estate Tax exemption increased to $5,430,000 in 2015 so no Federal Estate Tax. However, New Jersey taxes estates over $675,000.
New Jersey has an Estate Tax on amounts over $675,000. So, even if no Federal Estate Tax due, the estate must still file a Federal Estate Tax Return, plus NJ Estate Tax Return.
So, for an unmarried or widowed person with assets of $1,000,000, there is No Federal Estate Taxes, but the Estimated State Estate Tax: $33,200.00
For an unmarried or widowed person with assets of $1,500,000, estimated NJ Estate Tax is over $60,000.
The Federal Tax rate on estates over $5,340,000 was increased from 35% to 40%. How to avoid NJ Estate Tax- hire an attorney to set up a personal residence trust or irrevocable trust and have the assets taken out of your name and put into a trust or given to children and grandchildren in the trust. Minimum fees for trust are $3,000. This is probably not something a non-attorney can do on their own. It is illegal for a non-attorney to provide legal advice or prepare most legal documents.
2. Gifts permitted without Federal Estate & Gift tax remained at $14,000 per person. However, the amount permitted for Medicaid transfers is zero.
3. We recommend Self- Proving Wills since witnesses often move or pass away
An old New Jersey Probate law required one of the two witnesses to a Will to travel and appear in the Surrogate’s office and sign an affidavit to certify they were a witness. This often created problems when the witness was deceased, moved away, or simply could not be located. Some witnesses would require a $500 fee to simply sign a surrogate paper. My Grandmother’s Will was not self- proving, and the witness to Will extorted a $500 fee.
The New Jersey Legislature later passed a law to create a type of Will called a “Self-Proving Will.” In such a Will, the person for whom the Will is made must sign. Then two witnesses sign. Then the attorney or notary must sign; with certain statutory language to indicate the Will is self-proving. Beware of online documents not prepared by an attorney When done properly, the executor does not have to locate any witnesses. This usually saves time and money. If your Will is not “self-proving” or if you are unsure, schedule an appointment with an elder law attorney. Some law offices ignore the revised law, and fail to prepare self proving Wills. Do not use a law office that follows old methods and does not do a self-proving Will.

4. NJ SENATE Law No. 708 made a number of substantial changes to the NJ Probate Law. Non-formal writings could be Wills under the Revised provisions governing the administration of estates and trusts in New Jersey. So make sure you have a Formal Will drafted by an estate attorney. The law expanded situations where writings that are intended as Wills would be allowed, but requires that the burden of proof on the proponent would be by clear and convincing evidence. Possibly a Christmas card with handwritten notes could be presented as a Will or Codicil.
To present a non-formal Will or writing requires an expensive Complaint and Order to Show Cause to be filed in the Superior Court, and a hearing in front of a Superior Court Judge.
Be careful; have a Will done properly by an experienced attorney. Beware of the “Elective share” rights of a new spouse. Have a Prenuptial Agreement if entering into a 2nd marriage
The elective share provisions of the present Code has still not been changed yet. Currently, the new spouse who is not given money in a Will can challenge the terms of the Will. This is called "electing against the Will by a spouse". A spouse could receive up to 1/3 of the estate, even if only married for 2 weeks. The spouse must file a Caveat or lawsuit in Superior Court. We suggest a formal prenuptial agreement in 2nd marriage situations. A Testator now means both male and female individuals, removing the term “Testatrix”. Will forms that say executrix should not be used. Materials athttp://www.njlaws.com/probateupdate.htm