Estate administration covers the range of legal obligations and responsibilities that are part of the role of executor. In this blog, New Jersey estate planning attorneys take you through this role to demonstrate exactly what administering an estate is all about.
In order to do this, it’s important that the probate process is also understood. Probate is a legal process that certifies the validity of the deceased’s Last Will and Testament and appoints an executor to oversee the administration of the estate. Once this is done, the executor has to ensure that the required steps are taken in compliance with New Jersey state laws regarding creditors, taxation and the distribution of assets.
Administering estate taxes
In New Jersey, there are three different types of tax that can be levied on an estate: Federal estate tax, New Jersey Inheritance Tax, and Federal/State income taxes. A federal estate tax will only be levied if the estate is very large – for this year, 2016, the estate has to exceed $5.45 million. The NJ state tax, however, affects estates worth in excess of $675,000. The state’s inheritance tax functions on a sliding scale based on who inherits – the closer someone is to the deceased (for example, a spouse or child), the less tax is owed.
Managing the estate’s assets
The most common method of doing this is to first open a bank account for the estate and deposit any existing cash accounts and any cash owed to the estate into that account. This account will also be used to pay any debts owed by the estate, for example, outstanding taxes, and to pay any of the estate’s expenses. The administrator will also be in charge of:
- Collecting the deceased’s assets, recording their details and storing them safely.
- Having any assets appraised if necessary (for example, a property that needs to be sold)
- Distributing assets as stipulated by the Last Will and Testament
Estate administration when there is no Last Will and Testament
If the deceased dies intestate, the distribution of their assets is taken over by the State of New Jersey – even if the deceased had different wishes. This is why estate planning is so important.
The probate court will appoint an administrator of their own choosing, often the surviving spouse or child of the deceased, who will carry out the same duties and obligations that the executor of a Will would be responsible. The real difference occurs in the distribution of the deceased’s assets. These will be distributed according to the state’s system that places the surviving spouse, civil union partner or domestic partner with the highest priority, along with the children of the deceased. The next priority goes to grandchildren of the deceased if their parent’s are deceased, each receiving an equal share.
If there is no surviving spouse, civil union partner or domestic partner, then the surviving parents inherit, and if there are no surviving parents then siblings of the deceased will inherit an equal share.
The estate is considered to be escheat if there are no immediate surviving family members (from grandparents and aunts and uncles to parents, siblings, children and grandchildren) and the assets of the deceased are then taken by the State of New Jersey.
Speak to an estate planning attorney today and finalize your essential documents
Legal guidance can be of great assistance when you are administering an estate, especially if you have limited knowledge of this complex legal process. At Sedita, Campisano & Campisano, we can provide you with expert legal advice and personal guidance during this process. Not only can we assist you with speeding up this lengthy process, but also in saving you the maximum amount of costs possible.
Our attorneys can also assist you with all aspects of your estate plan, from drawing up your Last Will and Testament to Living Trusts, medical directives and Power of Attorney documents. For more information on setting up or changing an estate plan, please contact us at the law firm of Sedita, Campisano & Campisano, LLC in New Jersey today.