Closing the Estate

A. FINAL ACCOUNTING
Pursuant to N.J.S.A. 3B:10-23, the Executor under a Will or the Administrator of an intestate estate is obligated to settle and distribute a decedent’s estate “as expeditiously and efficiently as is consistent with the best interest of the estate”. After marshaling the estate assets, paying the decedent’s debts and paying an unnecessary death taxes, the Executor or Administrator should take prompt action to close the estate. In order to do so, the Executor or Administrator typically accounts to the estate beneficiaries.

An estate can be closed in one of four fashions: (1) the mere release of funds by the Executor or Administrator to estate beneficiaries; (2) the release of estate distributions to estate beneficiaries after the execution of a Release and Refunding Bond upon which there is a waiver of any form of accounting; (3) distribution to estate beneficiaries after said estate beneficiaries execute a Refunding Bond and Release upon submission of an informal accounting; and (4) an Order obtained by a Court of competent jurisdiction after a Verified Complaint and Order to Show Cause are filed for approval of an Executor’s or Administrator’s account.

Theoretically, it is possible for an Executor or Administrator merely to make distributions to estate beneficiaries with no paperwork whatsoever. However, an Administrator would typically not be discharged by the Surrogate’s Court unless Refunding Bonds and Releases are signed and filed. (A copy of this form is attached in the Appendix). The requirement of bond may continue to be imposed and costs of discharging the bond would be borne by the Executor who would subsequently have to obtain Refunding Bonds and Releases or a Court Order discharging the requirement of bond at his/her own expense. Although an Executor typically doesn’t not usually have to concern himself/herself regarding the requirement of bond, an Executor constructively waives the protection of a Refunding Bond and Release by not having such bond(s) executed prior to distribution. No competent professional would ever allow a client to close an estate in this manner.

It is theoretically possible for beneficiaries of an estate to execute Refunding Bonds and Releases without requesting any accounting or information from the Executor or Administrator. In doing so, the beneficiaries of an estate are exhibiting, to a degree, blind faith. However, the execution and filing of said bonds effectively closes out the estate and discharges the Executor or Administrator from his/her position without further liability.

Although it is possible to resolve the closing of an estate without an accounting, the case law of the state clearly details its right to an accounting and the expectations of estate beneficiaries regarding the handling of an estate. (A copy of an accounting is attached in the Appendix). Specifically, the courts of this state have described the duty of an Executor or Administrator as follows:

“It is elementary that the Executor is under a peremptory duty to account for the assets of the estate coming to his possession or knowledge; and if, through failure of the fiduciary duty, he is unable to do so, he is chargeable with their full value. It is a primary duty of one exercising such trust functions to gather in the assets of the estate; and while it is incumbent upon him, in the discharge of this duty, to use only such care, skill, diligence, and caution as a man of ordinary prudence would practice in like matters of his own, it is also held to the upmost good faith.” In re Brueck’s Estate, 124 N.J. Eq. 62, 63 (E&A 1938).

In fulfilling a fiduciary relationship, the fiduciary, at all times, should be governed by a “prudent person” standard.Id.@63; In re Accounting of Koretzky, 8 N.J. 506, 524 (1951). Where the fiduciary fails to fulfill his/her obligation, “the parties of interest, may, by an exception, challenge the account in respect of the sufficiency of the charges made, and the Executor may be surcharged with the reasonable consequences of his failure of duty.” Brueck, supra at 63.

An accounting may be filed in an “informal” or “formal” manner. An informal accounting is a general summary of the assets obtained by the Executor/Administrator, as well as income received and spent by the estate, disbursements made by the estate, distributions made by the estate, and proposed final distributions. In many instances, an informal accounting will summarize classes of expenditures rather than make line-by-line itemizations.

A formal accounting is typically generated in one of three circumstances: (1) a complex estate in which the beneficiaries as well as the Executor or Administrator agree upon the production of same; (2) where required by the Charitable Trust Section of the Attorney General’s Office; and (3) when agreement cannot be reached upon an informal account by estate beneficiaries and the Executor or Administrator thereby can only be discharged by an Order by a court of competent jurisdiction.

In complicated estates, it is frequently necessary to generate a formal accounting to ensure that all parties feel that there has been proper disclosure regarding the handling of an estate. Theoretically, a formal accounting can be generated for even the smallest estate. However, may estates resolve without a formal accounting for the cost of the preparation of same. If all parties agree, the formal accounting can be used to close out an estate. In this instance, a Court Order is not necessary. Refunding Bonds and Releases will suffice.

In many instances, the Charitable Trust Section of the Attorney General’s Office may require a formal accounting in order to conclude an estate. By statute, Notice of Probate must be sent to the Charitable Trust Section whenever a charity is a beneficiary under aWill. If there is a specific bequest, the Charitable Trust Section does not require an accounting, however, when a charity or charities are remainder beneficiaries under an estate, the State can require a formal accounting. When the State requests a formal accounting, the State also requests that the attorney, representing the estate, submit an Affidavit of Services for fees and costs incurred.

Most frequently, a formal accounting is filed when the Executor or Administrator is unable to obtain Refunding Bonds and Releases from all beneficiaries notwithstanding good faith attempts to obtain same through the use of an informal accounting. In this event, the only way in which an Executor or Administrator can be discharged from his/her duty is to obtain a Court Order. In order to do so, the Executor or Administrator must file an Order to Show Cause along with a Verified Complaint for approval of accounting. At the very least, the Verified Complaint will seek an Order from the Superior Court (Chancery Division/Probate Part) (a) approving the Executor’s or Administrator’s account, (b) approving the legal fees and costs incurred; (c) approving the Executor’s or Administrator’s commissions; and (d) discharging the Executor or Administrator from any further liability from the estate or its beneficiaries. In the case of intestate administration, the Complaint should also see that any surety bond be discharged upon distribution to the estate beneficiaries.

Upon approval of a final account, the surety bond can be discharged in one of two fashions. First, the beneficiaries will be given one final opportunity to execute a Refunding Bond and Release. If any Refunding Bonds and Releases remain unexecuted, an application can be made to the court to have said beneficiary’s share paid into the court and acquire an Order discharging the bond upon doing so.

An Order to Show Cause and formal accounting may be filed by an Executor or Administrator at any time once the estate is ready to be distributed. However, a beneficiary of an estate may not compel an Executor or Administrator to account until after the expiration of one year after the appointment of the Executor or Administrator unless special cause is shown before the Superior Court.

A formal accounting generally includes information in the following areas: (1) a general statement made as to corpus, income, and balance on hand; (2) receipts of principal or corpus by the beneficiary; (3) gains and losses on sales or other dispositions of capital assets; (4) disbursements of principal or corpus; (5) distributions of principal or corpus to estate beneficiaries; (6) principal balance on hand; (7) receipts of income; (8) disbursements of income; (9) distribution of income to estate beneficiaries; and (10) reserves held and proposed schedule of distribution.

When an account is filed in court, a representative from the Surrogate’s Office will review the account in detail. The Surrogate’s Office will assess a fee for the audit of the account. After this audit is made, a memorandum is written to the probate judge as well as, in many instances, to the attorney who prepared the account as to any questions or concerns the Surrogate has regarding the account itself. In some jurisdictions, if the account has considerable questions or does not comply with the before stated format, the Complaint and Order to Show Cause may be returned for correction. Nevertheless, after the correction Order, at times even without, an Order to Show Cause will be executed whereafter notice must be given to all interested parties regarding the hearing date. The Order to Show Cause will contain language which sets forth the date by which exceptions to the account and answers to the Complaint must be filed by any protesting party.

On the return date of the Order to Show Cause , the Court theoretically can hear arguments regarding the accounting and exceptions and take testimony. At the Court’s discretion, a discovery schedule can be set regarding interrogatories and depositions by the fiduciary and/or contesting estate beneficiaries. After the plenary hearing, the probate judge can either accept the account in its entirety or agree to alter the account as to certain exceptions.

In making a final determining regarding the account, the probate judge will make a determination as to the appropriateness of the fiduciary commissions as well as legal fees and costs incurred on behalf of the fiduciary. Although such fees are typically paid by the estate, the Court does have some discretion. First, a Court can modify the Executor’s fees. Second, the Court can take two sets of action as to legal fees. First, the Court can adjudicate the appropriateness of legal fees and costs requested.

Additionally, the Court can determine which party should be responsible for the payment of such fees and costs. Although such fees and costs would typically be paid by an estate, the Court can surcharge the Executor or Administrator if there exists evidence of gross negligence or fraud. On the other hand, the Court can surcharge the accepting party for the fees and costs incurred in filing an accounting if the Court finds that requirement of an accounting and cost of the proceeding were generated in bad faith.

B. DISTRIBUTION OF ESTATE TO BENEFICIARIES
Distribution of an estate typically takes four forms: (1) distribution of non-probate assets, (2) distribution of specific pecuniary bequests, (3) distribution of specific (but illiquid) bequests, and (4) residuary distributions.

In general, non-probate assets are not even handled by the Executor or Administrator of the estate. Such assets cannot be counted in the Executor’s or Administrator’s commission structure. However, if an Executor or Administrator has knowledge of the existence of non-probate assets, information regarding said assets should be distributed to the beneficiaries of same.
Non-probate assets typically take three forms. First, non-probate assets could be contract assets such as life insurance, annuities, individual retirement accounts, and other forms of retirement plans. Such assets are paid to the named beneficiaries of said accounts or policies. Said accounts or policies are only paid to the estate if there is no named beneficiary. Assuming that there is a named beneficiary, the Executor or Administrator should supply a certified copy of a death certificate to the beneficiary so that he/she may claim the proceeds from said accounts or policies. If no beneficiary is named, the Executor or Administrator shall provide not only a certified copy of the death certificate but a short certificate of the Letters Testamentary to the financial institution holding said asset and will refer that asset to be retitled or paid over to the estate.

Second, an individual may own transfer-on-death (TOD) or paid-on-death (POD) accounts. These are accounts historically held with banks. However, they have also been utilized on government savings bonds as well. Over the past decade, many brokerage house offices have employedTODdesignations. In order to claim such assets, theTODor POD beneficiary needs to supply a certified copy of the death certificate. An Executor or Administrator should provide a copy to said beneficiary, although they have no legal obligation to do so. Such beneficiary can certainly obtain a copy of the death certificate at the municipality where the decedent resided at the time of his/her death.

Third, assets can pass by right of survivorship. In financial accounts, there is a designation of joint tenants with right of survivorship. With such accounts, death certificates are produced by a surviving account holder and, thereby, assets are passed from one party to another.

In the case of real property, it is not necessary to transfer the ownership of property by deed from the estate of the deceased owner to the surviving owner. When the property is later sold or otherwise conveyed, the incident of the deceased party’s death merely needs to be noted in the deed recital.

Notwithstanding the foregoing, many financial institutions will only release one-half of the aforementioned assets until a waiver is obtained by the State ofNew Jersey. If the beneficiaries are Class A beneficiaries (i.e., spouse, parent, children, or other lineal descendants), the assets are typically released immediately if a Form L-8 is executed at the financial institution which, in turn, will request the waiver from the State. If more remote relatives, friends, other individuals or entities are named as beneficiaries, the entirety of the asset will not be released to the beneficiary or surviving account holder until a waiver is received by the State ofNew Jerseysubsequent to the filing of a New Jersey Transfer Inheritance Tax Return.

For distribution purposes, two forms of bequests are handled by the Executor or Administrator. Specific pecuniary bequests are precise distributions of cash. Those bequests should be paid as soon as is feasible after death. Typically, such bequests should be paid once the Executor has sufficient cash to handle such bequests along with any typical liabilities of the estate, including funeral expenses, administration expenses, debts and taxes. Pursuant to N.J.3B 23-11, “General pecuniary devises shall bear interest beginning one year after the first appointment of a personal representative until payment, unless a contrary intent is indicated by theWill, or unless the Court, for good cause, raises the imposition of interest. The annual rate of interest on general pecuniary devises shall equal the average rate of return, to the nearest whole or one-half percent, for the corresponding proceeding fiscal year terminating on June 30th, of the State of New Jersey Cash Management Fund (State accounts).” Notwithstanding the foregoing, an Executor or Administrator should forego payment of such a devise if it appears that there are significant liabilities pending against the estate especially if such claims are subject to litigation.

All other bequests, including residuary bequests, should be made as promptly as possible. However, neither an Executor nor an Administrator need to distribute any such bequest until he/she receives a closing letter from the Internal Revenue Service and the New Jersey Transfer Inheritance Tax division releases its closing letter and waivers. In general, complete distributions are not made until such closing letters and waivers are received. On the other hand, an Executor or Administrator may make partial distributions before he/she receives the closing letter and waiver if he/she determines that sufficient funds exist to pay any contingent liabilities.

One of the benefits of making partial distributions is the shift of income from the estate to the beneficiaries. In making a partial distribution, the Executor or Administrator of the Estate can send a Form K-1 to the beneficiaries who, in turn, can claim estate income on their own individual Form 1040. This option is almost always preferable to having the estate income taxed by the estate at significantly higher estate tax rates. In determining whether or not such partial distribution should be made, the Executor or Administrator should weigh the following factors: (a) the needs of the beneficiaries, (b) potential deterioration or loss of value of estate property, and (c) income tax ramifications from shifting estate income. If the Executor or Administrator decides to make a partial distribution, he/she should treat all beneficiaries impartially by making pro-rata distribution of their shares under the intestacy statute.

In general, there is no set time by which an Executor or Administrator must close an estate and distribute the estate assets. It must be done pursuant to the reasonable person standard. If an estate is taxable, the Executor or Administrator should wait until the federal closing letter and/or state closing letter are received. In the event an estate is subject to both federal and state tax, the Transfer Inheritance Tax Branch will not release a state closing letter until the federal closing letter is received by its office.

After the aforementioned steps are taken, the Executor or Administrator shall ensure that all final estate expenses are paid including Executor’s commissions and professional fees.

Occasionally, an aggregate estate is not expected to cover the decedent’s debts, administration expenses, taxes and bequests. In that situation, the shares of estate beneficiaries must be abated. Pursuant to N.J.3B:23-12, shares should abate in the following order: (1) property passing by intestacy, (2) residuary devises, (3) general devises and (4) specific devises. N.J.3B:23-12 further states that abatement within each classification is in proportion to the amount of property each of the beneficiaries would have received if full distribution of the property had been made in accordance with the terms of theWill.

C. DISCHARGE OF FIDUCIARY
An Executor or Administrator can be discharged in one of two fashions. First, Refunding Bonds and Releases, as discussed heretofore, are executed by all estate beneficiaries and filed with the Surrogate. By doing so, the fiduciary ensures that he/she has been released by any further liability by the estate beneficiaries and exacts the recognition of pro-rata distribution to any liabilities that may be discovered or presented to the estate at a later date. If such Refunding Bonds and Releases cannot be obtained, a Court Order will suffice. If a surety bond has been required, it can be discharged by the Order, Judgment, or evidence of filed Refunding Bonds and Releases.

Share
Thomas D. Begley, III

About the Author

Thomas D. Begley, III is the co-chair of the Trusts & Estates Group at Capehart Scatchard. He is a Certified Elder Law Attorney (CELA) who earned both his undergraduate and law degrees from Georgetown University, located in Washington, D.C. He concentrates his practice in the areas of estate and tax planning, estate administration, small business representation, elder law, and probate litigation. He is an accomplished author and lecturer who has frequently spoken on behalf of the National Academy of Elder Law Attorneys and the New Jersey Institute for Continuing Legal Education as well as other professional organizations. He has been named a “Super Lawyer” as voted by his peers and facilitated by New Jersey Monthly in the area of Trusts and Estate Litigation on numerous occasions. He has attained the prestigious AV rating by Martindale-Hubbell.

40 Enlightened Replies

Trackback  •  Comments RSS

  1. Barbara N. says:

    How long does it currently take for the NJ Attorney General to approve an estate that has a charity as a beneficiary.

  2. Mal says:

    when is the earliest an estates assets can be distributed and the estate closed out when there is only one beneficiary?

    • Mal, your question is difficult to answer accurately without knowing anything about the background of the estate. For example, obligations to death taxes and the claims of potential creditors are issues which may need to be addressed. However, if the executor and the beneficiary are one and the same, it is possible for the executor to transfer the assets to himself or herself so long as they understand that they have to meet these potential obligations. If they are different people, the executor should typically wait for the 9 month statute of limitations for claims of creditors to be filed and, if there are any death tax obligations, until the State releases a letter of no further assessment. Hope this helps. Tom

  3. The court ordered Conservator (who filed to be the Administrator in May 2016 ) went to court on 12/20/16 to close out my husbands moms estate which entails distributing the money to 3 siblings (everything was liquidated in Sept 2016) & for him to receive his final fees & then be released from his duties.

    Now what happens?
    What is a Refunding Bond & Release?
    How long until the estate is distributed to the siblings?

    Thank you in advance for your response, Sherri

    • Sherri, as to the issue of timing and what happens, that in part is a reflection of the court order. However, a refunding bond and release is a document executed by each beneficiary which, in part, discharges the administrator of the estate from any further liability upon making the distribution noted therein. Good luck. Tom

  4. Rick says:

    Thomas,
    I am dealing with an insolvent estate. The only beneficiary is one (living) person, call her “Jane Doe”. However, a charity was named as a third alternate beneficiary, if “Jane Doe” and her issue not have survived the decedent.

    Does this mean I have to serve the NJ Attorney General and the charity w/ notice of the probate? Even though the charity is only a back-up/contingent beneficiary, where the contingency never came to pass… ?

  5. Noel Rivers says:

    Thank you for posting this informative article. I have a question regarding an estate that has a clause stating that all just debts and costs of administration shall be paid by the residuary estate, but the residuary estate isn’t large enough to pay off those expenses, which include a hefty reverse mortgage. The decedent’s 3 living children who take the residuary would be left with significantly less, should I deplete it to pay the just debts, and the 3 grandchildren who share a 1/3 interest in the real property would receive much more than decedent intended.

    If you can point me in the right direction on this estate I would greatly appreciate it!

    • Because there is a reverse mortgage, the home needs to be sold. To be safe, I would file an action in the county probate court seeking what is known as advice and direction. In doing so, you are asking the judge to make the call.

  6. Kayla says:

    In NJ, when there is a partial disbursement does the Executor get to draw their Executor fee at the same time the partial disbursement is paid out? Also, what happens if the beneficiaries decide not to sign the Final Release/Refund bond?

    • The Executor can take her fee any time. However, until the estate is closed, part or all of the fee could be challenged. If the beneficiaries do not sign the final refunding bond and release, the only way to be properly discharged is to have a formal account approved by the Court. The Executor needs to do this for her protection.

  7. Glen says:

    I am a co-executor of an estate with my brother. His attorney fees are 10x that of mine. He doesn’t seem to understand what is going on nor do I think he reads what he signs and continues to spend thousands of dollars on small issue. Is there anyway to stop this or do I just need to wait for an accounting at the end for a judge to review the billing. Would a judge really allocate fees to a co-executor if they are excessive?

    • I would put your brother on notice that you believe the fees to be excessive and will challenge them. If he wants to continue to use the attorney in question, you can tell him to take the fees out of his commission and/or share of the estate. Assuming he will not, you can either bring an action to remove him now or to file an account with the court seeking that the fees be disallowed or reduced.

  8. BERNADETTE HILWAY says:

    I am the executrix of a friend’s estate. I have already made partial distributions to all 10 beneficiaries. I am now left with $11,000 to distribute in order to close out the estate. I realize I will have to prepare final release and refunding bonds. My question is – how do I know what amount to put in the bonds. I will not know how much filing fees and mailing fees will be. Does the law allow for me to leave a minimal amount (ie: $100) in the estate account?

    • Bernadette, it is customary to hold back funds to pay for the preparation of any estate income tax returns and administrative costs. Our practice is to prepare refunding bonds and releases that net out these costs. Once these costs have been paid, you can distribute the balance without any further refunding bond. It is hard to imagine someone getting upset by receiving an unexpected check. Tom

  9. Ruth Jensen says:

    My Mom just died two weeks ago. My parents WILL entails distributing the estate to 3 siblings equally. Nothing has been liquidated as of this date (two homes + stocks and bonds).
    The executor of the WILL is requiring, at this date, that all siblings complete a Refunding Bond and Release legal form before any monies can be distributed.
    To start the process, several stocks will be cashed in for distribution. Is it necessary to complete at this time, the Refunding Bond and Release form in order to receive partial payments of stocks etc?

    • Ruth, it is customary for an executor to have a refunding bond and release executed by estate beneficiaries prior to any distribution. However, the refunding bond and release should state in the caption that it is a “partial” refunding bond and release. It should also note that any release of the executor for the distribution is solely up to the extent of the partial distribution. You should not execute a standard refunding bond and release as it typically says you have received the entirety of your inheritance. Good luck.

  10. James Dean says:

    Can you tell me what the worst can happen if the final accounting is incorrect? I have submitted the first and final, but they sent it back. I made corrections the best I could, but still am $49 off somehow. Everything else is perfect. All other paperwork is good. Just can’t figure the 49, so I put it as depreciation of one asset. I am just done with the probate stuff and really can’t handle the stress of it any longer, and want it to stop. So, what is the very worst case if my final accounting is wrong (to the courts), and I can’t find the $49. Can I just go to jail for a few days and be done with it. All beneficiaries have signed off on everything and notarized copies of distributions and granting approval of estate closure. I just want it over now. I can’t handle any more money or stress. How can I make this stop? Thank you.

    • I can’t speak for your State, but in New Jersey, if all of the beneficiaries sign a refunding bond and release, there is no need for court approval. You file those executed forms and that’s it. If you nevertheless need to file, the worst should be that they reduce your executor’s commission by $49. Good luck.

      • James Dean says:

        Thank you. I don’t believe VA has a need for that. What I can say is living trust, don’t die in Fairfax, and as much honor as it seems, try to steer clear of being the executor. It will literally stress you and your wallet to death.

  11. Kurt says:

    My life-long bachelor brother-in-law passed away intestate. Having no wife or children as heirs, his next of kin per New Jersey guideline is his 88 year old mother. She asked me if I would handle his final financial affairs for her. So in the Middlesex county Surrogates office we filed and she signed the renunciation form and I was named administrator. Turns out his estate is insolvent, with insufficient funds to pay for the funeral. There is no funding left to pay other creditors and federal and state income taxes. Refusal letters were sent to all known creditors. in order to close the estate, do I need to have my mother-in-law file a Refunding Bond and Release form stating zero dollars will be distributed? Do I need to file an informal accounting with the state as well. If so Is there a form for this? His father is deceased so I believe his mom is the only legal heir from a legal point of view, correct? His three sister do not need to served and file Refunding Bond and Release forms. Thanks iin advance for your help.

    • Kurt, the refunding bond and release concludes any legal obligation you may have with beneficiary. However, it does not discharge any liability with the taxing authorities or other creditors. Technically, what you should do is file an application to have the estate declared insolvent. It is akin to a bankruptcy proceeding for an estate. It is done by filing a Verified Complaint and Order to Show Cause with the Surrogate. In it you list the assets, expenses and debts. Based on what you are telling me, the court should enter an Order stating that the estate is not bound to pay the debts. The Order to Show Cause and final Order get served on the creditors. The upshot is that it eliminates the creditors from filing any action against the estate later. It is an expense (a few thousand dollars) but it allows to shut down the creditors especially the IRS and NJ Division of Taxation who may inquire a few times before closing out the estate. Good luck.

  12. Beverly Albright says:

    I am the executor of my father’s will. My brother and I are the only beneficiaries and have pretty much split everything already. The only thing left is the home. My brother doesn’t want any parts of it and has agreed to sign a document allowing me to put the deed in my name solely. Is there a specific form that I can find online to do this? I need to get the deed in my name so that I can refinance the mortgage.

  13. J. Smith says:

    I am one of three beneficiaries in my aunts will. I have received an informal accounting of the estate but there are items that do not add up. I have requested both to the executor and the attorney he has given power of attorney to for a formal accounting of the estate before my self and brother sign the release bond. I have yet to receive the formal accounting at what point do I submit an application to the court to have the estate audited.
    Also if the executor gives his duties to another does he still receive his fee?

    • You can apply to the local probate court to compel an accounting. In addition, you can contest the executor taking the full fee. Although most states have statutes or case law that sets commissions, there is law that supports the reduction of commissions if the executor did not expend much effort or virtually delegated all of his or her responsibilities to a third party such as the estate attorney.

  14. Andrew Gattuso says:

    My sister passed away May 12, 2017. Her will left PNC bank the executor. Her estate is about $1,000,000. In New Jersey, can half distribution be paid out now. The bank is saying one year for half distribution

    • Andy,I am sorry for your loss. Having said that, partial distributions are not made immediately after death. Based on the content of your message, it appears that her estate is subject to inheritance tax. That tax is due and payable eight months after a decedent’s date of death whereafter the executor has to wait about 6 months for the State to provide a letter indicating there is no further tax obligation. In addition, there is a 9 month statute of limitations for creditors to file claims after an individual dies. Although she may very well not have any debts to your knowledge, there are occasionally surprises in estate administration. One year may be a bit cautious but it’s not out of line. In this sort of circumstance, the earliest I would have a distribution made is after the nine month period. This may not be the answer you were seeking but I hope it helps.

  15. Andy G says:

    My sister died on May 12, 2017. She lived in New Jersey by herself. PNC bank is executor of her will.
    Her estate is around $1,000,000. Me and my 3 siblings are equal beneficiaries. Can one distribution be now? The bank is say one year. She has no debts.

  16. Denise says:

    I am the Executrix of my father’s small estate. My brother who was also a beneficiary passed away six months after my father, during probate. My brother died intestate. His assets passed to his wife without going through probate. I am now ready to distribute my father’s assets, can I distribute directly to my sister in-law or does she have to create an estate?

  17. Kathryn Hoffman says:

    My mom died just over two years ago. Two of four siblings are unhappy and spiteful, as there was a no contest clause they waited until the time period was over to complain. The executrix has tried to answer every question raised but the spiteful ones are still not satisfied. They now want to contest the will, our mothers mental capacity, the executrix, our mothers expenses for the last five years of her life and anything else they can think of. According to our attorney they have told their attorney that their whole plan is to spend all the estate money on attorney fees. They received their cash distribution, we received the real estate. The remainder of the estate money is to be distributed by percentages. How can we end this travesty?

    • Kathryn, they can’t contest the Will as the statute of limitations to do so has expired. As to the administration of the estate, you will likely need to file a formal accounting with the court. When you do, request that the unhappy siblings be assessed the fees and costs of bringing the complaint and the associated court costs. I cannot guarantee that a judge will invoke this penalty but the estate will be properly concluded assuming the executrix’ records substantiate that she has done her job properly. I will note that I dealt with a similar family over the past year. However, two weeks before Court, they folded. Although we didn’t impose the costs on them, they signed the refunding bonds and releases, and the estate concluded. Good luck.

  18. Gayle Lundquist says:

    I am the executrix of my mother’s will. Probate in NJ. All financials have been equally distributed to my 2 siblings and me. My mother’s jewelry (gold & silver pieces) was last to be divided. I hired a certified estate appraisal service who valued each piece as they would for the purpose of an estate sale. I used this valuation as a means to divide the jewelry lot in thirds. However, I sold all the gold pieces to this service for the purpose of melting. I received a check for $1225.00 and deposited in the estate checking account. The will gives me the right to decide how to divide & distribute the personal property. I knew the gold jewelry was going to be a battleground and chose to melt in order for everyone to get equal share. The remaining silver jewelry can be sold at one’s discretion. My sister is livid, accusing me of not fulfilling my fiduciary duty to her because she “wanted” specific pieces. The will does not name any specific personal property to go to any sibling. Once she received her share of the financials, she has been spiteful and nothing but trouble. Everything is done and accounted for. Can she challenge this in court? Can she prevent me of collecting my commission? She threatens to not sign the Release Bond. I just want to close this probate and be on with my life. Thank you for your time and advice.

    • Gayle, you may have a problem. Typically, beneficiaries are entitled to what is known as an “in kind” distribution. That means they can take an asset as part of their share of the estate.
      As such, your sister is likely correct. You could have offset the value of the pieces she wanted from the share she was to receive from the liquid assets. I would consult with counsel to see what you can do to mitigate this issue. Good luck.

  19. Flossie says:

    My husband passed away intestate two months ago. At the surrogate’s they said, as his wife everything is mine since the only children involved are both of ours. As the administrator of his relatively small estate, It’s been crazy. My questions are, am I supposed to pay the creditors for cars and credit cards out of the estate right away or am I suppose to wait 9 months for them to file a claim? I want to make sure the taxes are filed and paid before paying creditors but this is taking time to gather all the information. I have to go to the IRS to see what they have also.
    Should I pay off the leaves to his two cars from the estate( not in my name). The creditors took one car without my knowledge and said the lease was up in September and only a couple of payments need to be made. The car lease expires in Nov 2017.
    Also, my daughter started college in September. My husband has always paid for our children’s college education. He passed away right before the first payment was due. I had to pay it out of the estate, is this okay? I hope it is. Also, can I pay my living expenses out of the estate like…, mortgage, taxes, and the heating system stopped working in July. It needs to be replaced estimated at $17000 for 2. I can’t afford all this from my own accounts. How do I close the estate once it’s done or do I need to do this.Will appreciate any advice you can give me.

    • Flossie, I am sorry for your loss. There are ways to minimize exposure to certain creditors. However, it is impossible to do that via an on-line forum like this. There are variables in including the amount of assets, what type of assets, in whose name, the amount owed to the creditors. Although the estate is modest, you should consult with an attorney. Although there is a cost to get good advice, it’s much cheaper than trying to handle these issues on your own. Good luck.

  20. Gretchen says:

    My mother in law died last December and my husband is the executor of her estate (so, I’m helping) with him and two siblings as 3 equal beneficiaries. We have passed a 6-month waiting period for creditors to come after the estate. Are we able to partially disburse the funds to the beneficiaries? I have asked this of our attorney and can’t seem to get any answer… One sibling would like the funds but we don’t want to write checks if we aren’t supposed to. We would like to pay out the majority (it’s a relatively small estate with about $150,000 cash) and leave a budget for future expeneses like estate tax-prep and additional legal fees….

    • Gretchen, based on the information you have provided, I have several concerns. First,In New Jersey, the waiting period was expanded years ago to 9 months. Prior to 2005, there was a shorter period but the executor had to publish what is known as a notice to bar creditors. In 2005, the law changed so that the executor was relieved of the obligation to publish the notice, but creditors were given a few extra months to file their claims. Second, there’s no law that says you have to wait for any event to occur in order to distribute an estate. The “waiting period”, as you call it, is for the protection of the executor. If an executor distributes an estate prior to the end of the period, and a claim is filed before the deadline, the executor can be personally held liable for the claim. When an executor has a strong sense of any potential liabilities, partial distributions are often made earlier than that date. After the period has expired, final distributions should be made although a reserve should be held for payment of possible income tax preparation fees and legal fees. Third, the estate is not subject to estate taxes in NJ unless the estate exceeded $675,000 when she died last year. In all, your questions don’t appear difficult and a competent estate attorney should be able to answer them in the same conversation in which they are asked. Good luck.

Post a Reply

Your email address will not be published. Required fields are marked *

Top