Dealing with a loved one’s final affairs is an emotional process. It shouldn’t also be confusing, inefficient and wasteful. Paul Wigg-Maxwell is a New Jersey attorney with more than twenty-five years of experience helping Executors, Executrixes, Administrators, and Administratrixes (“Personal Representatives”) through the probate and administration of estates.
Paul Wigg-Maxwell handles large and small Probate and Estate Administrations, including both contested estates and uncontested estates.
Because most people are unfamiliar with the Estate Administration Process, Mr. Wigg-Maxwell has provided the following description of the steps and issues involved:
When a loved one dies, the process of Estate Administration begins. This process includes either Probate or Administration and includes all of the steps of winding up the affairs of the deceased.
The person who is responsible for the Estate Administration is called the “Personal Representative” and may be an Executor or Executrix appointed by the deceased person in the Will, or if no Will exists, it may be a family member or other person who volunteers and is appointed by the Surrogate Court, the Administrator or Administratrix.
It is a good idea for the Personal Representative to have competent legal advice. The Personal Representative is a “fiduciary” meaning that the Personal Representative has agreed to fulfill the duties of the position with highest degree of responsibility and diligence. It can be difficult to determine what these duties require when a Will is unclear or different beneficiaries of the estate have different ideas of what should happen to the assets of the deceased.
Probate is technically the process of producing the Will and having it accepted as the proper Will by the Surrogate Court and obtaining the appointment under the Will as the Personal Representative. If there is no Will a similar process, called “Administration” is followed whereby the Surrogate Court appoints a family member volunteer or a Court selected professional to act as the Personal Representative. At times the words “Estate Administration” and less often, “Probate” are used in a loose sense to cover both procedures.
Problems Encountered in Producing the Will
The Will may be difficult to find or to obtain. A bank may not cooperate in making a Safe Deposit Box available to inspect for a Will. The Will may be in the files of an attorney who has ceased to practice, moved or died. The Will may be in the residence of the deceased which is also occupied by an uncooperative person who may benefit less under the Will than if there is no Will.
Often it is possible to retrieve the original will with a little effort from the person who is not producing it. When necessary a court order can be obtained to produce the Will. If the original Will is missing it may be possible to introduce a photocopy or other evidence as to the provisions of the Will. This may involve a proceeding in the Superior Court.
The Will may not be “Self-Proving” meaning that at least one original witness must be found to swear to the Will. If the witness is out of state or can’t travel, the witness may make an affidavit as to the validity of the Will.
Wills That Are Defaced or Suspect
The Will may be written upon, unstapled or with one or more loose pages, or torn or otherwise defaced or illegible in some respect. Usually such problems can be resolved with an explanation of the way in which the problem was created and an indication of whether the deceased intended the Will to nonetheless be accepted as a valid Will, or intended some change or revision to the Will.
The Will may be suspect or someone may claim that Will is invalid due to “undue influence” by a person benefiting under the Will. This can lead to litigation to determine the merits of the claims.
The Will may be unclear or fail to direct how certain assets of the deceased should be handled in the current circumstances. It may be necessary to seek the Court’s direction as to how the Will should be interpreted.
Selecting the Personal Representative
Often the person named in the Will to be the Personal Representative is no longer the best person for the job or it is inconvenient for the named representative to take on the position. A renunciation properly signed and witnessed will permit the Surrogate Court to appoint the second or third person named rather than the parties renouncing the position. This is often convenient when several persons are named as a group to be the Personal Representative and the size of the group and distance between the members makes it difficult to work together.
In Administrations more than one person may want to serve as the Personal Representative forcing the Court to hold a hearing on who should be appointed.
Creditors of the Estate
It is important that creditors of the estate and those claiming to be creditors be properly handled. If the Personal Representative pays a claim that is not proper, the Personal Representative may have to personally pay back the estate for the loss.
Some creditors may choose not to pursue a debt against the decedent after his or her death. They may simply consider writing off the debt as more efficient than seeking full payment.
Other creditors may file a formal claim. The Personal Representative then must consider whether the claim should be paid and when. There is a priority among claims against an estate that may make it prudent to wait and see if higher ranking claims will be filed before paying lower ranked claims. Among the higher ranked claims is the claim for taxes, so it may be necessary to wait until tax returns have been filed and accepted before paying any claim. However, it may be possible to pay claims earlier, if the assets are sufficient and adequate reserves can be set aside for projected liabilities.
Access to the bank accounts and assets of the deceased person requires the appointment of the Personal Representative by the Court and often requires the production of one or more “tax waivers”. The staff at many local bank offices and brokerage firms have limited experience in dealing with tax waivers and may wrongfully refuse to grant access to the assets or provide incorrect advice on what kind of waiver is needed and whether or not the Personal Representative may legally sign such a waiver. A great deal of confusion can exist when the assets in the estate exceed $675,000 and if any assets are being put in trust or are going to persons other than the decedent’s parents, children or spouse. Assistance with gaining timely access and the avoidance of problems is a significant part of the advice a lawyer can provide in an estate administration.
The Personal Representative must resolve the tax issues of the decedent and the estate. In most cases, final income tax returns are required to be filed for the decedent’s final year of life. In addition, the estate is generally required to file a New Jersey Inheritance Tax Return and often required to file a New Jersey Estate Tax Return. Larger estate may be required to file a federal estate tax return or may find it advantageous to do so.
Preparation of the estate returns offers the chance to do significant tax planning to assist the beneficiaries of the estate. It is a good idea to consult with a professional in filing any estate tax return.