Trusts & Estates Thursday, January 26, 2023
When a loved one passes, the family faces the difficult task of settling the estate and implementing their wishes. This process begins with the funeral arrangements and continues through the settling of the estate.
The Process of Settling an Estate
The first issue is whether the deceased family member has left a will. If there is a valid will, then the will govern the way that the assets in the estate are distributed. There may also be trusts, created by the will or by the late family member before their death.
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If there is a will, it will name an executor who hopefully is available and willing to serve in this role. If there is no will, then an administrator will need to be appointed, typically from among eligible family members. In New Jersey the county surrogate supervises the administration of will when there are no disputes among the beneficiaries or potential beneficiaries.
Navigating the Probate Process
Any disputes about the validity of the will or its terms are decided in the Superior Court. An interested party can file an action in the Superior Court or the county surrogate may refer it to the Chancery Division of Superior, which has jurisdiction over probate disputes.
Here are the essential steps you will follow n the process of settling an estate.
- Find and secure the most important documents: The documents that are critical to settling and estate will include the deceased person’s will, any trust documents, life insurance policies, bank and investment account statements, lfe insurance policies, deeds to real estate as well as any other records related to assets and liabilities. Put these documents in a safe place.
- Secure the deceased person’s property: This can be a troublesome situation, since the right to take action requires the appointment of a fiduciary. Nonetheless, in some circumstances, it may be necessary to take steps to secure the property of the deceased person, including the involvement of law enforcement. This may be the case when there are general security issues or when there are concerns that those who have access to the deceased person’s home may take property, including documents or records.
- Notify relevant parties: Inform the necessary individuals and organizations about the death. This typically includes immediate family members, beneficiaries mentioned in the will, financial institutions, employers, insurance companies, and government agencies.
- Executor or administrator appointment: If there is a will, the document usually designates an executor to oversee the estate administration process. If there is no will or no executor is named, the court will appoint an administrator to handle the tasks.
- Probate process: Determine whether probate is necessary, which will be based on the nature of the assets involved. Probate is usually required for assets solely owned by the deceased, while assets held jointly or with designated beneficiaries may bypass the probate process. If a trust was established and funded during the life of the deceased, those assets may also pass outside of the prob ate process. In most cases, probate will be necessary, which requires submission of the will to the surrogate in the county in which he or she was domiciled at the time of death.
- Asset valuation and management: Determine the value of the estate’s assets, which may include bank accounts, investments, real estate, personal belongings, and business interests. Take necessary steps to safeguard and manage the assets during the administration process.
- Debt settlement and tax obligations: Identify and address any outstanding debts or taxes owed by the deceased. This includes notifying creditors, paying off debts using estate funds, and filing final tax returns on behalf of the deceased.
- Asset distribution: Once all debts, taxes, and expenses have been settled, distribute the remaining assets according to the wishes outlined in the will or in accordance with applicable laws if there is no will. Follow any specific instructions provided by the deceased, such as establishing trusts or making charitable donations.
- Finalize estate matters: Close out the deceased person’s accounts, cancel subscriptions or memberships, transfer ownership of assets, and complete any other necessary administrative tasks to finalize the estate’s affairs.
In most cases, it is advisable for the executor to engage an attorney to provide advice and to assist in the probate process. Other individuals who have an interest in the estate should also consider engaging an attorney.
Jay R. McDaniel