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GUIDE TO
PROBATE PROCESS
INTRODUCTION
The most sensible, practical
and surest way we can protect those who depend on us is by making a will.
We have assembled this
information to inform New Jersey residents of the advantage of preparing a will,
outline the meaning of the word "probate" and the course of action required to
complete probate.
Wills should be reviewed on
a regular basis as your situation in life changes such as children, moving to
another state, grandchildren, remarriage, purchase of real property, etc. State
and Federal laws also change constantly which could mean a revision in your
will. Remember: an investment in a properly drawn will could save your heirs
additional transfer inheritance taxes and income taxes at the time of your
death.
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THE IMPORTANCE
OF A WILL
Do you have a will? If not,
you've probably given some thought to it. You know it's a good idea to make a
will, but one thing or another keeps coming up and you put off doing something
about it. It's a subject you really don't feel like thinking about - somehow,
executing a will seems to make "the day of reckoning" a little closer.
Unfortunately, many people
do not execute wills for two reasons - procrastination and antipathy to thoughts
of death. Another reason for dying in testate (without a will) is that most
individuals don't have a clear idea as to the law. They realize that if they die
without will, their assets will be distributed to their family. But what they
don't understand is that the plan of distribution may not be in accordance with
their wishes. In fact, it's a good bet that it won't be as they would have
desired.
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THE WILL
DEFINED
Before proceeding further,
let's define the will. It is a legal declaration of a person's intention
concerning what shall be done following the death, as to the disposition of the
property and the administration of the estate. Three characteristics of a will
set it apart from other forms of property transfer.
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A will is revocable
during life - you can change your mind.
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A will is inoperative
until death - it's provisions don't take effect until that time.
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A will only applies to
the situation that exists at death - as to the extent of your property
holdings and beneficiaries.
There are well defined legal
requirements regarding wills which relate to such matters as the capacity to
make a will, execution, restrictions upon the disposal of property by will and
revocation. These requirements, which are beyond the scope of this discussion,
are a direct concern you should present to your lawyer.
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STEPS IN
PREPARING YOUR WILL
A will that is to be
successfully probated and made to meet your needs and wishes, must first be
thought out carefully by you. Although you can prepare your own will, an
attorney can help fulfill your intentions and guide you in making the best
decisions. Be sure to discuss fees with the attorney so there is no
misunderstanding at a later time.
Remember, your will can be
changed at any time you wish, as your assets, intentions or desired
beneficiaries may change. Your will is not made public while you are alive,
since the will is not presented for probate nor recorded before your death. The
existence of a will does not affect your right to dispose of your property
during your lifetime.
Firstly, start by making a
list of all your assets. It is important to list how each asset is owned -
individually, jointly, in trust, etc. - since this will determine whether or not
the disposition of the property will be governed by the will, or by operation of
law. Joint property with right of survivorship, real property and motor vehicles
in the name of husband and wife pass automatically to the survivor.
Secondly, examine the
beneficiary designations in all life insurance policies, IRA, pension plans and
similar documents. They will not become part of your estate and therefore, be
sure you have not included their value to cover any expenses.
Thirdly, select an executor
to administer the will. It is the executor's duty to collect all the assets of
the estate, determine what claims are being made against the estate, file the
necessary tax returns and distribute the assets among the beneficiaries under
the will. The executor may be a beneficiary under the will, a member of your
family, your legal or financial advisor, a friend, a bank, trust department or
business associate. It is also advisable to name a contingent executor to act in
case your first selection dies before you, or, for any reason, is unable to
serve as executor.
If the will is complex, you
may need to appoint a trustee and/or guardian for some of the beneficiaries. A
financial institution may be the right trustee to appoint in this situation to
handle the many complex tax, accounting, investment and property management
decisions.
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EXECUTING YOUR
WILL
To be effective, a will must
be written, signed by the testator and witnessed by at least two people, or the
signature and material provisions are in his/her handwriting. The latter is not
recommended because these wills , referred to as holographic wills, cannot be
probated in the Surrogate's Court but must be presented to the Superior Court.
Each witness must personally
witness the signing of the will. Witnesses do not have to read the will or know
it's contents. However, they must be told by the testator that it is his will,
and that he wants them to be witnesses to its execution.
While the law permits a
beneficiary to witness a will, it is recommended that a beneficiary-witness be
used only when a disinterested party is not available. In this way, possible
future challenges may be avoided.
NJ Statutes also allow the
witnesses and testator to sign the will in the presence of a Notary Public or
attorney making the will "self-proven". This relieves the witnesses from
appearing in the Surrogate's Court to prove their signature at the time of
probate.
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SAFEGUARDING
YOUR WILL
The will should be kept in a
secure place such as safe deposit box or fire proof strong box. But more
importantly, your executor should know where it can be found. It is a good idea
to give a copy of the will to your executor with a notation where the original
will can be located.
If it is kept in a safe
deposit box it can be removed by the executor immediately following your death
in the presence of an employee of the bank upon proof that you are the proposed
executor named in the will.
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KEEPING YOUR
WILL UP TO DATE
A will should be
periodically reviewed and kept current. Keeping it current is just as important
as making one in the first place. Certain changes in your life, such as
marriage, birth of a child, purchase or sale of property, change in your
financial status, or changes in various tax laws may warrant your making certain
important revisions in your will. Also, laws change from state to state (and
country to country) so the will should be updated to take the local laws into
account.
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HOW
TO CHANGE YOUR WILL
There are two ways to change
your will: prepare a new one or prepare a codicil. If there are many changes to
make, it may be less confusing to the executor to prepare a new will. If you
have only minor additions or deletions, a codicil, executed in the same
formality as a will, would be sufficient. Changing your will by drawing lines
through items, erasing, writing over or adding notations is improper and may
destroy it as a legal document.
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AFTER DEATH
When a person dies leaving
assets in his name alone or in joint names with another person other than a
spouse, it will be necessary to present the will to the Surrogate for probate.
The will is presented to the Surrogate in the county wherein the decedent
resided at the time of death.
The executor will need to
present the original will, certified copy of death certificate and a list of
names and addresses of the closest next of kin to the Surrogate. Papers are
prepared by the court and signed by the executor. The legal review of the
documents by the surrogate is the probate of the will. If all requirements are
met, the will is admitted to probate and certificates are issued to the
executor. These certificates allow the executor to execute documents formerly
done by the decedent such as transfer automobiles, bank accounts, investment
accounts, etc.
The original will is
retained by the Surrogate and filed and recorded in the Surrogate's Court. The
will becomes a public record and is listed in the general index.
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LETTER OF LAST
INSTRUCTION
Few persons expect to die
when they do, and therefore, relatively few leave their affairs in perfect
order. Those who administer an estate and take care of what is left often find
themselves without necessary information. To facilitate their job, it is
advisable to give your personal representative or your attorney a letter of last
instruction which is separate and apart from your will. This letter should
contain the following:
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Name and address of
those to be notified at death and relationships of family members.
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Instruction as to burial
and funeral including any prepayments of funeral expenses.
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Location of birth,
baptismal and marriage certificates as well as social security card,
citizenship papers, armed forces discharge papers and titles to automobiles.
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Location of safe deposit
box and where keys are kept.
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List of insurance
policies and where they can be found.
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List of stocks, bonds,
securities, savings accounts, credit union accounts, etc.
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Statement of all real
property owned by you with location of deeds, mortgages, abstracts and
insurance policies for real property.
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Location of income tax
returns for previous five years.
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Receipted bills and
cancelled checks for previous five years.
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List of any gifts made
and information needed for estate tax.
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MANY ASKED
QUESTIONS....
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WHAT IS A WILL?
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A will is a legally
enforceable written document directing which belongings and property go to
whom. It also transfers ownership of real and personal property when the
maker of the will passes away.
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DO I NEED A WILL?
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Yes--if you want your
assets to be distributed according to your wishes rather than by statute.
Also, you get to pick the executor.
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WHAT IF THE WITNESSES
DIE OR CAN NOT BE LOCATED?
A minimum of at least two witnesses is required to witness a will. You may,
however, have additional witnesses. This would help insure that at least one
witness would be available in the event of the testator's death. If one
witness dies or can not be located you need do nothing. However, if no
witnesses to the will are living someone who can identify the signatures of
the two of the witnesses must come forth. If all witnesses die or cannot be
located, it is advisable to prepare a new will
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CAN THIS PROBLEM BE
AVOIDED?
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Yes, simply have your
will made self-proven at the time of signing which means to have a notary or
attorney attest that they saw the testator and the witnesses sign the will
and then witnesses will not be required to prove the will.
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CAN A WILL SAVE MONEY?
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Yes, a will can
eliminate the requirement of a bond which will reduce administration
expenses and it could permit your estate to take advantage of tax savings.
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CAN I PREPARE MY OWN
WILL?
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Yes, but without
professional guidance and advice it may not be legally sufficient to be
admitted to probate. In addition, self prepared hand written "holographic"
wills can only be admitted to probate after a costly time consuming formal
Superior Court hearing.
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CAN I NAME MORE THAN ONE
EXECUTOR?
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Yes, you can name two or
more executors to serve at the same time or alternate executors to serve in
the event the first named executor dies or is unable to serve.
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WHAT EFFECT DOES A WILL
HAVE ON REAL ESTATE OWNED JOINTLY BY HUSBAND AND WIFE?
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Real estate owned
jointly by husband and wife in the form of ownership legally known as
"tenancy by the entirety" is not controlled by the will of the spouse who
dies first. Absolute ownership of the property will pass to the surviving
spouse who has rights of survivorship, regardless of what the will may
provide.
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WHAT ABOUT JOINT BANK
ACCOUNTS OR CERTIFICATES OF DEPOSIT?
Accounts held jointly may be owned with right of survivorship and if you
want the account to pass outside the estate when one owner dies, make sure
you set the account up that way.
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DOES A DIVORCE REVOKE
THE ENTIRE WILL?
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A divorce operates as
revocation of any bequest made to your former spouse or any appointment of
your former spouse as executor, but in all other respects the will is still
effective.
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DO ALL STATES HAVE THE
SAME PROBATE LAWS?
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No, although New Jersey
is one of several states to enact the Uniform Probate Code, most states have
their own probate laws. It is a good idea to have your will reviewed when
you move to another state.
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IF BOTH PARENTS DIE
LEAVING CHILDREN UNDER 18 YEARS OF AGE AND THEY HAVE NO WILL WHO SELECTS THE
GUARDIAN?
Application is made to the Surrogate who usually appoints a person from
among the next of kin of the minor.
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GUARDIANSHIPS
FOR MINORS
A Guardian for a minor
can be named in a will or the Surrogate can appoint a guardian if a minor
receives an inheritance or proceeds from a lawsuit.
Normally, the money is
deposited in the Surrogate Court Intermingled Account and held until the minor
reaches the age of 18 years.
As an alternative, the
Guardian could post a bond and invest the monies themselves on behalf of the
minor with court permission.
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POWERS OF
ATTORNEY
A Power of Attorney is a
written document in which another adult person is authorized to act on your
behalf regarding real property, bank accounts and other financial and legal
matters.
It is generally used when
someone is unable for some physical or mental reason to carry out his or her
affairs. With this instrument, a spouse, friend or family member, called an
Agent, can act on behalf of you, the Principal.
There are generally two
kinds of Power of Attorney: limited and general. The limited power of attorney
gives a person authority to act for a specific purpose. With a general power of
attorney the agent has the authority to act on anything and everything for the
principal if he or she becomes disabled or mentally incompetent. Most general
powers of attorney will have a provision that will allow the agent to act even
in the event of the disability of the principal. A power of attorney ends at the
death of the principal.
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IF YOU DIE
WITHOUT A WILL - WHO GETS WHAT
A. What your Surviving Spouse Gets:
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Your entire estate if you have no surviving issue and no surviving parent.
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The first $50,000 plus one-half of the balance of your estate if either
a) you have no surviving issue but have a surviving parent or parents;
or
b) you have surviving issue and all of them are also the issue of your
spouse;
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One-half of your estate if you have surviving issue but one or more of such
issue is not also the issue of your spouse (e.g., children by another
marriage.)
B. What your Surviving Children or
Grandchildren Get:
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Your entire estate if you have no surviving spouse;
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Half your estate if have a surviving spouse who is not the parent of one or
more of your children;
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Half your estate less $50,000. if you have a surviving spouse who is the
parent of all your children.
C. What your parents get:
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Your entire estate if you have no surviving spouse or surviving issue;
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Half your estate less $50,000 if you have a surviving spouse but no
surviving issue;
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Nothing if you have surviving issue.
D. What Your Brothers and Sisters Get:
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Your entire estate if you have no surviving spouse, issue or parents;
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Nothing if you have surviving spouse, issue or parent
E. What Other
Relatives Get:
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you have no surviving spouse, issue, parent, brother or sister, then your
entire estate passes as follows:
a) To the surviving issue of your parents, other than your brothers and
sisters (e.g., nieces, nephews, grand-nieces, grand-nephews, and so on);
if there are none, then:
b) To your surviving grandparents or their issue (e.g., aunts, uncles, first
cousins, first cousins once removed and so on.)
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you die without any relative listed above surviving you, then your estate is
taken by the State of New Jersey (called Escheat).
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GLOSSARY
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Administrator:
(also known as Personal Representative) Person or institution appointed by
the court to manage and distribute the estate of a person who dies without a
will.
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Beneficiary:
Person named to receive property or benefits.
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Codicil:
An addition or supplement made to change or add provisions to a will.
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Contingent beneficiary:
Receiver of property or benefits if first-named beneficiary dies before
receiving all benefits.
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Contract:
Legal enforceable agreement.
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Decedent:
A deceased person.
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Devise:
To give (or a gift of) property.
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Estate:
Everything a person owns.
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Executor:
(also known as Personal Representative) A person or institution named in the
will to carry out the provisions and directions of the will.
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Heirs:
Those persons who are legally entitled to receive a decedent's property.
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Issue:
Children, grandchildren, great grandchildren, etc. (lineal descendants)
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Intestate:
A person who dies without making a valid will.
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Legatee:
A person who receives personal property under a will.
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Levy:
To collect by assessment.
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Lien:
A charge upon property, real or personal, for the satisfaction of a debt.
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Personal property:
Intangible property such as stocks, bonds, or bank accounts and tangible
property such as furniture, automobiles and jewelry.
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Probate:
Official proof of the genuineness of a will.
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Real property:
Land and buildings.
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Surrogate:
A judicial officer who has jurisdiction over the probate of wills.
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Tenants in common:
Two or more persons owning individual interests in property.
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Testator:
The person who makes a will.
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Trust:
Property owned and managed by one person for the benefit of another person.
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Trustee:
Person or institution holding property in trust.
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Waiver:
A legal instrument relinquishing a right or lien.
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Will:
A legal declaration of the manner in which a person wishes his estate
divided after death.
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Witness:
Person who observes the signing of a will and also attests to the
signatures.
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