Table of Contents:
WHY EVERYONE SHOULD MAKE ONE
YOUR WILL
STEPS IN PREPARING A WILL
THINGS TO KNOW WHEN MAKING A WILL
SIGNING YOUR WILL
SELF-PROVEN WILLS
COMMON DISASTER CLAUSE
SAFEKEEPING YOUR WILL
KEEPING YOUR WILL UP TO DATE
HOW TO CHANGE YOUR WILL
DYING WITHOUT A WILL
APPOINTMENT OF ADMINISTRATOR OR PERSONAL REPRESENTATIVE
LETTER OF LAST INSTRUCTIONS
PROBATE REQUIREMENTS
APPOINTMENT OF GUARDIAN
HOW A WILL IS PROBATED
GUIDELINES FOR EXECUTOR/ADMINISTRATOR
A TRUST
NOTICE OF PROBATE OF WILL
JOINT OWNERSHIP
WHY
EVERYONE SHOULD MAKE ONE
Everyone owns something
and therefore is an owner of property - real or personal - and has an
estate. REAL PROPERTY is land and buildings. Everything else that may
be owned is called PERSONAL PROPERTY, such as bank accounts, stocks,
bonds, furniture, automobiles, money, life insurance, jewelry, and personal
effects. It is the owner's privilege to select to whom his/her estate
will go. You may choose one of several ways to dispose of your estate
- by a Will, by creating a trust or joint ownership, or by letting the
law distribute your property. This informational booklet is meant to
familiarize you with your rights and to point out necessary steps to
be taken to transfer property to your heirs. It is not a substitute
for sound advice.
YOUR
WILL
Making a Will is
an important step in your financial management program. To save your
heirs time and money, you can plan now for the orderly transfer of your
property. Making a Will will avoid the cost of a bond and possible disagreement
among those who are to receive your property. You decide to whom, when,
and in what amounts your assets should go. You select your executor
or personal representative, the one who shall be responsible for the
disposition of the estate. You may avoid a forced sale of your property,
or costly and tedious applications to the courts for the right to sell
it. You have greater assurance that your plans will be carried out as
you desire. Without a Will your estate must be distributed according
to the intestate laws, the provisions of which are general and inflexible.
The law will say who shall administer your estate, among whom, and how
it shall be divided. If you do not name an executor or personal representative,
your property may not be distributed as you wish, and thus cause hardship
for those you want to safeguard most. Without a Will you lose the privilege
of naming a guardian for your minor children. This is vital, particularly
if your spouse should not survive you. If you leave no immediate family,
failure to leave a Will may result in your property going to persons
in whom you have no particular interest.
STEPS
IN PREPARING A WILL
A document that
will stand up in court, and tailor-made to meet the needs of your family,
must be thought out carefully by you. The Will can be prepared by an
attorney who specializes in Will drafting or estate planning. The attorney
can guide you to the best decisions - but only after obtaining all the
facts that you alone can give. Thus, you can be sure that your Will
is properly phrased, witnessed, and has all the technicalities observed.
THINGS
TO KNOW WHEN MAKING A WILL
- You don't need
to make an itemized statement of your assets, nor do you need to state
the disposition of your property item by item.
- You can change
your Will at anytime you wish, as your assets, beneficiaries or desires
change.
- Your Will is
not recorded before death; no one needs know of it if that is your
wish.
- The existence
of the Will does not affect your ability to sell or dispose of property.
You may continue as though you had not written the document.
- 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 order to avoid future challenges as to conflict.
Start by making
a list of everything you own and owe - a statement that will show exactly
where you stand financially. Decide to whom you will leave your real
and personal property. Be certain you have stated just what your wishes
are by making a list of the persons involved, their relationship to
you, your objectives, when their bequest is to be given, and how it
is to be provided.
NOTE: You may make
bequests to friends or charities. It is not mandatory for you to make
bequests only to family members.
Select an executor,
executrix, or personal representative to administer the Will. This may
be a beneficiary of your estate, a member of the family, your legal
or financial advisor, a trusted friend or business associate. You should
name a contingent executor or personal representative to act in case
your first selection dies before you, or is unable to serve. A bank
can act as an executor, personal representative, trustee under a trust,
or guardian of either a minor or incompetent person.
A bank is experienced
and familiar with accounting and management details. It is financially
responsible and a continuing institution if an individual may die, but
a bank has continued life. In selecting your executor or personal representative
and trustee, the choice should be business like, not sentimental. Your
executor or personal representative has the important responsibility
of settling your estate and seeing that the wishes expressed are faithfully
carried out.
Here are a few
of the things an executor or personal representative may be required
to do, in addition to seeing that the Will is offered for probate:
- Qualify as executor,
(also known as Personal Representative), obtain a certificate of authority,
and if necessary, execute a bond.
- Locate and take
possession of all property, discover and assert all rights and line
up claims owed by the estate.
- Prepare and
file an inventory of all property and interest of any kind belonging
to the estate, listing the appraised value.
- Review all assets,
liquidating those of doubtful character.
- Advertise for
claims and pay them in the order cited by law.
- Collect monies
due the estate.
- Figure and pay
taxes.
- Pay legacies
under the Will.
- Distribute the
estate.
- Make final accounting
to the court, if required.
It is important
that you name a guardian if you have minor children.
If you consult an
attorney, ask for a rough draft of your Will and study it carefully
before signing the final copy.
SIGNING
YOUR WILL
A Will must be written,
signed by the testator (maker) and witnessed. The original copy is the
legal document and must be signed.
In New Jersey,
a Will, to be admitted to probate at the Surrogate's Court, must have
at least two witnesses. The testator and the witnesses are required
to be present at the signing, and each must see the others sign. The
witnesses do not have to read it or know what it contains. However,
they must be told by the testator that it is his/her Will, and asked
to sign as witnesses.
The witnesses should
be likely to outlive the testator and remain in the community. If you
do not have a self-proven Will, the whereabouts of your witnesses should
be known at all times.
SELF-PROVEN
WILLS
If the witnesses
and the testator execute an affidavit before a Notary Public, it will
not be necessary for either of the witnesses to appear in Surrogate
Court at the time of Probate. Your attorney can review your Will and
advise you as to whether it can be made self-proven and prepare the
proper Affidavit to comply with the law.
COMMON
DISASTER CLAUSE
A well-drawn Will
contains a common disaster clause to establish contigent beneficiaries
if both husband and wife die within a stated period of time. Without
a clause, if both husband and wife die with no way to determine who
died first, their individual property is disposed of as if they had
a widow and widower.
SAFEKEEPING
YOUR WILL
Keep your Will in
a safe place, but let the executor know where it can be found. If kept
in a safe deposit box, it usually can be removed by the executor in
the presence of an employee of the bank immediately after death. Husband
and wife should have their own wills. They each should know where both
are kept.
KEEPING
YOUR WILL UP TO DATE
Periodically review
your Will to keep it up to date. Keeping it current is just as important
as making one in the first place. Changes in your life such as marriage,
birth of a child, death, change of witnesses, purchase or sale of property,
a change in your financial status - or a change in the estate tax law
may make important revisions or a new Will advisable. A Will drawn in
another state can be valid; however, revision in relation to New Jersey
laws may be prudent. You are free to change your Will at any time.
HOW
TO CHANGE YOUR WILL
The safe way to
change your Will is to have a new one drawn; however a codicil may be
effective.
A codicil is a separate document used to make minor changes. It must
be signed with the same formality as the Will itself. It is not necessary
to have the same witnesses on the codicil and the original Will.
Do not try to change
your Will by drawing lines through items, erasing, writing over or adding
notations. This may destroy it as a legal document.
DYING
WITHOUT A WILL
Intestate Succession
When no Will exists, Real and Personal property is not distributed according
to the decedent's wishes. Rather, it is distributed according to the
statutes of New Jersey.
How will your property
be divided if you have no Will? The Chart on pages 7-8 shows how an
Estate is distributed in New Jersey if you do not leave a Will.
If you die without
leaving a Will and are a resident of New Jersey, the State law provides
the manner for distributing your property. Your net estate remaining
after deduction of debts, taxes, family exemptions, etc., would be distributed
under the Statutes governing Decedent's Estates and, in the case of
most common occurrence, the heirs who would receive such property are
as follows:
Property owned jointly
by husband and wife is automatically owned by the survivor. The following
charts show the distribution of separately owned property. (Effective
February 27, 2005)
IF YOU DIE LEAVING:
| Survivors
(Heirs) |
New (2004)
UPC |
|
Spouse
and parent(s), but no children
|
Spouse:
the first 25% (but not less than $50,000 nor more than $200,000)
plus three fourths of the balance
Parent(s):
All other estate assets
|
| Spouse and
children of Decedent, all of whom are also children of spouse (and
spouse has no children by any other relationship) |
Spouse:
100% of estate
Children:
nothing
|
| Spouse and
children of Decedent, some of whom are not children of spouse |
Spouse:
the first 25% (but not less than $50,000 nor more than $200,000)
plus one half of the balance
Children
of the Decedent: all other estate assets
|
| Spouse and
children of Decedent, all of whom are also children of spouse (and
spouse has children by another relationship) |
Spouse:
the first 25% (but not less than $50,000 nor more than $200,000)
plus one half of the balance
Children
of the Decedent: all other estate assets
|
| Spouse and
stepchildren (children of spouse who are not Decedent's children)
|
Spouse:
100% of estate
Stepchildren:
nothing
|
| Children of
spouse (stepchildren), but no descendants, parents, descendants
of parents or descendants of grandparents |
Stepchildren:
100% of estate |
Note: shares of
predeceased children pass to descendants by representation. The new
rules on intestacy say that the decedents inherit "per capita,
by generation" rather than "per stirpes."
More Remote
Cases (under this classification are not covered in this section of
the Booklet)
However, the State of New Jersey takes your property if you leave no
wife or husband; child or its descendants; parent; brother or sister
or their descendants; grandparent; or uncle or aunt or their children;
or their grandchildren or stepchildren.
NOTE: Any person
who fails to survive the decedent by 120 hours is deemed to have predeceased
the decedent for purposes of intestate succession.
APPOINTMENT
OF ADMINISTRATOR OR PERSONAL REPRESENTATIVE
When there is no
Will, an administrator, administratrix, or personal representative is
appointed by the Court. Any close relative may be appointed.
For an individual
or a bank to be appointed administrator or personal representative,
all other heirs must renounce their rights. In most cases, a surety
bond must be furnished by paying a premium to a surety company for signing
this bond.
The county surrogate,
or the Superior Court, grants letters of administration showing the
authority to act.
LETTER
OF LAST INSTRUCTIONS
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 executor, executrix, personal representative or attorney a letter
of last instructions - which is separate and apart from your Will. This
letter, to be opened upon your death, should contain the following:
- Names and addresses
of those to be notified at death, and relationship of members of family
and relatives.
- Statement as
to where your Will may be found.
- Instructions
as to funeral and burial. You may Wish to specify, for example, that,
as a Veteran you want to be buried in a national cemetery.
- Where your birth
or baptismal certificate, certificate of auto ownership, social security
card, marriage or divorce certificate, naturalization and citizenship
papers, and discharge papers from the armed forces may be found.
- Where your membership
certificates in any lodge or fraternal organizations which provides
death or cemetery benefits may be found.
- Location of
any safe deposit boxes you may have, and where keys are kept.
- A list of your
insurance policies and where they may be found.
- A list of all
bank accounts, checking and saving; their location and where the passbooks
are kept.
- A list of all
other savings accounts; for example, credit union deposits, etc.,
and passbook locations.
- A statement
concerning any trusts and/or pension systems from which your estate
may be entitled to receive benefits.
- A list of all
stocks and bonds or other securities you own, and where they may be
found.
- A statement of
all real property owned by you with the location of deeds, mortgages,
abstracts, and insurance policies for real property owned.
- A location of
copies of income tax returns for previous 5 years.
- Receipted bills
and canceled checks for last 5 years.
- List of debts
and names of creditors - with addresses.
- A statement
of reasons for actions taken in your Will, such as disinheritances.
It is usually better to place the explanation in a separate but accompanying
letter, rather than in your Will, to avoid a complicated will and
expensive litigation.
- List of any
gifts made and information needed for estate tax.
- A list of any
payments made, especially for funeral expenses.
PROBATE
REQUIREMENTS
- Decedent must
be a resident of Middlesex County or if a non-resident, decedent died
intestate seized of real property in this County
- Certified death
certificate
- Original Will
or if no Will, immediate next of kin
- Probate fee
APPOINTMENT
OF GUARDIAN
A guardian may
be appointed by the court for minor children. In order to sell or dispose
of a minor's interest in a parent's land, a guardian must be appointed
by the Superior Court to sign the deed for them. The expense of having
the guardian appointed, bond for the guardian, appraisals, court costs
and attorney's fees are charged to the minor.
In some cases, the
guardian applies to the court for permission and approval to sell and/or
to spend the children's money for their support or education. The guardian
must account for income and disbursements - by the court action if necessary.
HOW
A WILL IS PROBATED
Upon the death of
the testator or testatrix, the Will is probated. This is the legal process
which establishes the genuineness of the Will. It is done by the surrogate
or the Superior Court in the county where the testator or testatrix
resides at the time of death.
The executor, executrix,
or personal representative is appointed by going to the Surrogate Court
with the original Will, certified death certificate, and if the Will
is not self-proven, at least one of the witnesses who signed the Will
must prove his or her signature on the Will.
If the Will, for
any reason is not properly executed, the Surrogate's court can advise
the executor or personal representative as to the proper procedure in
order to allow the Will to be admitted to probate.
GUIDELINES FOR EXECUTOR/ADMINISTRATOR
If you have just probated
a Will and have been named Executor, or if you have qualified as Administrator
for an estate with no Will, you may be asking yourself the question, "What do
I do next?" I am pleased to supply you with some basic guidelines to assist you.
1. Notice of probate
of the Will must be served on all interested parties within sixty days
of probate, advising them of the name and address of the Executor. A
copy of the Will may accompany this notice or a copy may be requested.
If the Will contains any charitable bequests, notice must also be given
to the Attorney General of the State of New Jersey, Division of Law,
P.O. Box 112, Trenton, NJ 08625. You are to file a proof of service
by filing an affidavit that all parties were served by personal service,
or regular and certified mail. The filing fee is $5.00 per page.
2. The Administrator of an
intestate estate (no Will) is obligated to notify the Attorney General of the
State of New Jersey, in the event that there are no surviving heirs. In this
case, the net proceeds of the estate would escheat to the State of New Jersey.
3. The Executor/Administrator
is responsible for determining and marshaling all assets of the estate. An estate
checking account is opened from which bills are paid. It may be necessary to secure
a Federal ID number for the estate. You can call the IRS AT 800-829-1040 for
an ID number.
4. The Executor/Administrator
is responsible for all debts, last illness expenses, inheritance and estate taxes,
and administrative expenses from the decedent's assets.
5. The Executor/Administrator
is responsible for filing appropriate State and Federal tax forms as applicable,
and forwarding any tax payments due.
6. The Executor/Administrator
is entitled to a commission of 5% of the value of the gross estate (for estates
up to $200,000.00) and 6% on income.
7. The Executor/Administrator
shall prepare an accounting of the estate assets and disbursements and
proposed distribution, which accounting may be proved informally by
each beneficiary/heir acknowledging his approval of same. In the alternative,
the Superior Court of New Jersey approves a Formal Accounting. Filing
fee for the Informal Accounting is $5.00 per page.
8. The Executor has the
obligation to distribute the net estate in a timely manner, in accordance with
the terms of the will. The Administrator distributes in accordance with the
intestate laws of the State of New Jersey. A copy of the relevant New Jersey
Statutes is available at the Law Library, which is located on the second floor
of the Middlesex County Courthouse.
9. Prior to the
distribution, each beneficiary shall execute a Refunding Bond and Release.
Upon receipt of the executed document, the Executor/Administrator issues
payment. The original refunding Bonds and Releases are filed with the
Surrogate. The filing fee is $5.00 per page.
10.The Executor/Administrator
is required by NJ law to initiate a child support enforcement order for any
beneficiary receiving in excess of $2,000.00, prior to distribution of any
money to the beneficiary. The search shall be conducted by a private judgement
search company that will verify results.
A
TRUST
If there is a question
as to the ability of your beneficiaries to manage money or if you are
in a high tax bracket, ask your lawyer or inquire at a bank about setting
up a trust. A trust may be created by an agreement or by your Will giving
property to a third person - trustee - to hold and administer for the
benefit of the person named in the trust. A trust may reduce estate,
legal and administrative expenses. The trustee is entitled to a fee
for such service.
NOTICE
OF PROBATE OF WILL
Within 60 days after
the date of the probate of a will, the personal representative shall
cause to be mailed to all beneficiaries under the will and to all persons
who would inherit if there was no will, at their last known addresses,
a notice in writing that the will has been probated, the place and date
of probate, the name and address of the personal representative and
a statement that a copy of the will shall be furnished upon request.
Proof of mailing shall be filed with the Surrogate within 10 days thereof.
If the names or addresses of any of those persons are not known, or
cannot by reasonable inquiry be determined, then a notice of probate
of the will shall be published in a newspaper of general circulation
in the county naming or identifying those persons as having a possible
interest in the probate estate. If by the terms of the will property
is devoted to a present or future charitable use or purpose, like notice
and a copy of the will shall be mailed to the Attorney General. A TRUST
If there is a question as to the ability of your beneficiaries to manage
money or if you are in a high tax bracket, ask your lawyer or inquire
at a bank about setting up a trust. A trust may be created by an agreement
or by your Will giving property to a third person - trustee - to hold
and administer for the benefit of the person named in the trust. A trust
may reduce estate, legal and administrative expenses. The trustee is
entitled to a fee for such service.
JOINT
OWNERSHIP
Another way to
transfer property is through joint ownership. Real Estate owned by both
husband and wife automatically becomes the sole property of the survivor.
If two or more
persons other than husband or wife own real estate together, each owns
an undivided share as tenants in common, unless the deed states they
are to own "as joint tenants and not as tenants in common." With exceptions,
real estate held in joint ownership goes to the survivor or survivors
when one of the joint owners dies. An interest in real estate owned
by tenants in common passes to the heirs of the deceased.
Personal property
may be owned jointly with right of survivorship, the survivor becoming
the sole owner. Checking accounts, saving accounts, or stocks and bonds
may be held in joint ownership with right of survivorships, or as tenants
in common.
