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I’ve been made an executor. Now what?

Executors are appointed by a living person in their will to distribute their property and assets according to the wishes outlined in the will. The decision to appoint a person as an executor is usually made after careful consideration and a conversation with the executor to make sure they’re comfortable assuming the responsibilities of the role. Still, even if an executor knew they would someday assume responsibility for their loved one’s estate, the process can be confusing.

How do I become an executor in New Jersey?

Statutes about who can and cannot be an executor vary from state to state. Some executors in New Jersey may also have to obtain a bond and file it with the court before they can manage the estate, including non-residents of New Jersey.

Sometimes, an executor either is not named in the will or unable to fulfill their role. The court may appoint an administrator, who fulfills the same fiduciary obligation as an executor. As is held by New Jersey Title 3B (NJ Rev Stat § 3B:15-1 (2013)), any time someone other than the person originally appointed is made the executor of an estate, they must obtain a bond and file it with the court.

What are the responsibilities of an executor?

Executors are responsible for paying the debts and taxes of the decedent, and then distributing the remaining assets as outlined in the will. Some assets like a 401(k), IRA or property held in joint tenancy are known as non-probate assets, meaning that they do not pass through probate and instead go directly to the beneficiaries or surviving tenants. Other assets, called probate assets, are distributed to inheritors by the executor. Before these assets can be distributed, however, the will must go through probate, or proved valid in court, which accomplishes two things:

Probating the will makes it legally valid. Typically, at least one of the witnesses who signed the will either appears in court or submits a sworn statement acknowledging that they saw the testator sign their will without coercion.

In New Jersey, a testator can include a self-proving affidavit with their will and sign it along with their witnesses, which means that witnesses will not have to appear in court later and can speed up the probate process.

Probating the will gives the executor the legal authority to administer the estate. Even when the executor is named in the will, the executor must be formally appointed by the court before they can begin performing their duties. Once someone is formally made an executor by the court, they receive legal documents, either Letters Testamentary or Letters of Administration, which give them the authority to administer the estate.

What tax forms are needed?

After the will has been proved and the executor formally appointed, the executor can begin to administer the estate. The executor must first obtain the appropriate waivers to access the testator’s assets like bank accounts and real estate, which many find confusing. These are some of the most common estate-related tax forms:

Form L-8 may be completed by an executor or other permitted party to release New Jersey bank accounts, bonds, stocks or brokerage accounts to Class A beneficiaries only.

Form 0-1 must be obtained from the New Jersey Division of Taxation, and releases real property as well as assets. One waiver is issued per asset.

Form L-9 may be completed by an executor or other permitted party to release New Jersey real estate to a Class A beneficiaries only. This form is not necessary if the property in question was held in joint tenancy because the property already legally passes to the joint tenant.

Form L-9 may only be used for dates of death during the current calendar year; Form L-9(A) must be used for dates of death before January 1, 2018.

The executor is responsible for ensuring inheritance taxes are paid. New Jersey recognizes four classes of inheritors; A, C, D and E; to stratify what percentage of inheritance tax is due.

Class A and Class E beneficiaries do not pay any inheritance revenue tax.

Class A beneficiaries include most immediate family members, including parents, grandparents, spouse, biological or legally adopted child, stepchild and mutually acknowledged child.

Class E beneficiaries include most charitable and not-for-profit institutions as well as the State of New Jersey or any of its political subdivisions.

Inheritance revenue taxes for Class C and Class D beneficiaries vary depending on the size of the estate.

Class C beneficiaries can include the decedent’s siblings or the decedent’s child’s spouse, surviving spouse, civil union partner or surviving civil union partner. Class C beneficiaries may pay no inheritance revenue tax at all, or a tax of up to 16%.

Class D beneficiaries include every person not outlined by Classes A, C and E. Class D beneficiaries pay a tax of 15-16%.

That’s a lot to digest. Is there anything I can do to make being an executor easier?

Some smaller estates may be eligible for New Jersey’s simplified probate procedures, if there is no will in place. The procedure varies depending on whether or not the decedent is survived by a spouse: if so, the surviving spouse is entitled to the entire eligible estate without probate. If there is no surviving spouse, and all heirs consent in writing, one heir can receive the entire eligible estate. Regardless of the size of the estate, number of heirs or other factors, many find the probate process confusing. Jeff Apell is frequently appointed by the Court as an estate administrator, and has helped families find common ground during disputes as an estate mediator. Whether or not there is a will in place, Jeff and the other members of the firm’s Estates Division help to guide executors through securing all the right legal forms and paying all applicable taxes. Call (856) 242-8151 for the peace of mind expert legal advice provides.

This post: (1) does not create or constitute an attorney-client relationship, (2) is not intended as a solicitation, (3) is not intended to convey or constitute legal advice, and (4) is not a substitute for personalized legal advice from a qualified attorney. You should not act upon any such information without first seeking qualified professional counsel about your specific matter.