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A Citizen's Guide to Wills, Trusts, and Estates

 

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Function of the Surrogate Court

The function of the Morris County Surrogate includes administrating wills, estates, and trusts of Morris residents. The Surrogate is elected for a five year term under the New Jersey State Constitution and is a Chancery Division clerk of the New Jersey Superior Court. The Surrogate presides over the filing of wills that appoint executors, in order to transfer a decedent's real and personal property. The county Surrogate appoints an administrator to an estate where there is no will.

The Morris County Surrogate's office is fully staffed from 8:30 A.M. to 4:30 P.M. Monday through Friday. All inquiries will be gladly addressed by the Surrogate and his staff at 973-285-6500.

Wills

A will is a legal document that designates the distribution of an individual's estate upon death. An individual must be at least eighteen years of age in order to execute a will. This document specifies how property is to be divided and to whom it shall be distributed and who is in charge. If an individual does not have a will, an appointed administrator distributes the estate according to the laws of the State of New Jersey. It is therefore very important for individuals over the age of eighteen to have a will, in order to protect specific interests and intentions concerning the distribution of their property.

As a general rule, a will is probated in the state and county in which the decedent is a legal resident at the time of death.

Whatever type of will is executed, it should be kept in a safe place that is accessible in case of an emergency or upon the testator's death. Executors, family members, or those close to the testator should be aware that the will exists and where it is kept.

Standard Will

A standard will is one that is written, signed by the testator, and witnessed by two individuals. A standard will also contains an attestation clause that declares it to be that last will of the testator.

Self-proving Will

A self-proving will is a standard will whose witnesses sign at the time the will is notarized. This will includes an Acknowledgement and Affidavit Relating to Execution of the Will that is attached to the original will. Having a self-proving will eliminates the need for witnesses to appear before the Surrogate in order to have the will admitted to probate.

Holographic Will

A holographic will is one that bears no witnesses. Such a will must be signed by the testator. A holographic will can be admitted to probate only in Superior Court, and in the manner prescribed by the Rules Governing the Courts of New Jersey. This type of will is more vulnerable to challenge.

Items to Remember When Having a Will Drafted

A will is a legal document that is not effective unless properly prepared. Individuals should not undertake to execute a will unless they are knowledgeable about the requirements of a legally enforceable will, or have had an opportunity to consult legal advice. The process of executing a will can be simple, but certain items should be kept in mind while going through this process.

1. All beneficiaries should be specifically named and amounts of bequests specifically itemized.
2. Alternate beneficiaries should be specifically named in the event a designated beneficiary dies before the testator. If money or assets remain in the testator's estate, an individual should be named to receive the remainder in specific dollar amounts or percentages.
3. All wills must designate an executor. That individual is responsible for carrying out the intent of the testator with respect to property distribution.
4. Provide that an executor and guardian(s) will serve without bond. This bond will prevent the need to set aside money from the estate for that purpose.
5. If the testator has children under the age of eighteen, name a guardian for those children. The designation of a guardian should be discussed in advance of executing the will. One or two individuals may be so designated. These individuals are responsible for the day to day care of the testator's children as well as for any property the children may own or inherit.
6. All wills and codicils (see below) must be signed in the presence of two witnesses who are at least eighteen years of age, fully competent, and neither blind nor deaf. The State of New Jersey requires that the will be signed and witnessed by two witnesses. It becomes a self-proving will, provided it is properly worded and signed by a notary public.

Changing Wills and Codicils

A codicil is an addition or supplement to the original will that adds to or replaces part of the original will. A codicil is offered to probate in addition to the original will and must make reference to the original will. A codicil is often used when a testator undergoes some change in his or her life such as a marriage, divorce, birth or death of a child or a witness or executor,purchase or sale of real property, or a change in financial status. Changes in the federal estate or state inheritance tax laws may also warrant a codicil. An executed will should be reviewed upon the occurrence of any of the above events to evaluate the need for a codicil or a new will.

Intestate succession as of February 27, 2005

If an individual dies without a will, the laws of the State of New Jersey provide for the distribution of property to the heirs by intestate succession.

1. If an individual dies leaving a spouse and children, who are also the children of the surviving spouse, the spouse receives the entire estate.
2. If an individual dies leaving a spouse and children who are not also the children of that spouse, the spouse receives the first 25% (not less than the first $50,000 nor more than $200,000.) plus ½ of the balance. The rest goes to the children.
3. If an individual dies leaving children but no spouse, the children receive the entire estate divided equally among them. If there are grandchildren, they take their deceased parent's share by representation. If all the children are deceased, then the grandchildren share equally in the estate.
4. If an individual dies leaving a spouse, mother and father, but no children, the spouse receives the first 25% ( not less than the first $50,000 nor more than $200,000 ) plus 3/4 of the balance. The rest goes to the parents.
5. If an individual dies leaving no spouse and no children and that individual's parents survive, the parents inherit the entire estate. If no parent survives, brothers and sisters receive equal amounts of the entire estate.

If the estate does not exceed $20,000 and there is a surviving spouse, an Affidavit of Surviving Spouse may be issued by the Surrogate. An affidavit allows a husband or wife to dispose of the property. If there is no surviving spouse and the property does not exceed $10,000, a close relative can be issued an affidavit to handle the disposition.

If the estate exceeds $20,000/$10,000 an administrator will be appointed by the Surrogate. Before an administrator can be appointed, all other next of kin of the decedent must renounce their right to be the administrator. A surety bond is also required. The Surrogate will issue a "Letter of Administration" giving the administrator the necessary authority to transfer property, withdraw money from the bank accounts, pay outstanding bills and handle the other affairs of the estate.

To challenge the appointment of an executor or administrator, a caveat must be filed prior to their appointment, with the Surrogate to temporarily prevent the probation of a will or granting of administration.

The appointment of an administrator often takes time, especially if there are challenges to the appointment which must be addressed, or if a search for distant relatives must be performed. During that period, final pay checks can be withheld and bank accounts that were not jointly held can be frozen.

Finally, if there are no next of kin, the property will escheat to the State of New Jersey.

Probating a Will

Probating a will refers to the legal process through which the authenticity of a will is established. Once probated, a will becomes a permanent part of the county records.

Upon the death of a loved one, there are certain steps to be taken to ensure the smooth probate of a will.

1. Locate the decedent's original will.
2. Present a correct death certificate with raised seal, names and addresses of persons named in the will, and the names and addresses of all next of kin to the Surrogate's office. If the will is self-proving, it can be probated within a very short time. If the will is not self-proving, one of the witnesses to the will must come to the Surrogate's office or present proof of their signature.
3. Within sixty days of the will's probate, the executor shall notify all the heirs and beneficiaries named in the will, with proof sent to the Surrogate's Court.

The Social Security Office, Veteran's Administration and employer of the decedent should also be contacted to ascertain any benefits due the decedent.

State Inheritance Tax

The revised New Jersey Transfer Inheritance Tax Act of 1985 provides for four classifications of beneficiaries.

1. Class A - Spouses, children, step-children, grandchildren, parents, and grandparents are not subject to state inheritance tax.
2. Class B - This class was eliminated in a 1963 revision of the inheritance tax law.
3. Class C - Brothers, sisters, daughters-in-law, and sons-in-law are exempt from inheritance tax for the first $25,000. They are subject to 11% tax for bequests in excess of $25,000 and up to $1,100,000; 13% tax for bequests in excess of $1,100,00 and up to $1,400,000; 14% tax for bequests in excess of $1,400,000 and up to $1,700,000; and 16% tax for bequests in excess of $1,700,000.
4. Class D - All other individuals that do not fall into Class A or C are exempt from tax if the total amount of the bequest does not exceed $499. These individuals are subject to 15% tax on all bequests over $499 and up to $700,000, and 16% tax on bequests in excess of $700,000.
5. Class E - Charitable or non-profit entities are exempt from inheritance tax.

Further information concerning state inheritance tax may be obtained by contacting the New Jersey Transfer Inheritance and Estate Tax Division.

NJ Estate Tax

For estates greater than $675,000 contact a professional to calculate the NJ Estate Tax.

Federal Estate Tax

For transfers from spouse to spouse there is no federal estate tax. For all others the estate tax exemption is $5 million for the years 2011 and 2012.

Trusts

A trust is an agreement which allows a third party to administer another's property or bequest. It can be created through or independent of a will. Such an agreement can be established for minor children or others who are incapable of managing their affairs or bequests. The party appointed to administer this property or bequest is called a trustee.

When a trustee is named in a will, that individual must file a written declaration under oath of his or her acceptance of the trusteeship and a Power of Attorney. This declaration contains the name and address of the Trustee and all persons who have an interest in the trust. It also identifies the interest of the trust. Upon filing of an Acceptance and Power of Attorney, appropriate certificates and Letters of Trusteeship are issued by the Surrogate's Court.

Power of Attorney

A Power of Attorney is a written document in which an individual authorizes another to act on his or her behalf concerning real property, bank accounts or other legal matters. A Power of Attorney is often used when that individual is unable to carry out his or her affairs. It can be of a limited power, giving the individual authority to act for a specific purpose or event, such as the purchase of a home. It can also be of a general power, giving an individual power to act on all legal matters.

Guardian

A guardian is one who has been appointed by the court to conduct the general care and control of another. When a guardian is needed for a minor (under the age of eighteen), the guardian is appointed by the Surrogate's Court. When a guardian is needed for someone 18 years of age or older, the guardian is appointed by Superior Court.

Fees

The duties of the Morris County Surrogate and his office are set by the acts of the New Jersey State Legislature, as are the fees to be charged for those services. Payment can be made by either cash or a check made payable to the Morris County Surrogate's Court. The office does not accept credit cards.

Glossary

Administrator/Administratrix-Person appointed by the courts to take charge of the estate of a decedent who dies without a will.

Beneficiary-Person designated to receive money, property or benefits in a will.

Bequest-A gift of personal property by a will.

Bequeath-To dispose of personal property through a will.

Codicil-An addition or supplement to an original will that adds to or deletes only part of a will.

Decedent-A deceased person.

Devise-A gift of real estate through a will.

Escheat-Property reverting to the state for want of any legal heir.

Estate-Property and possessions owned by an individual.

Executor/Executrix-Person named in a will to carry out the wishes and intentions of the will.

Guardian-Person entrusted by the law with the personal and/or fiduciary care of another.

Heir-Person who inherits property from a deceased person through a blood relationship, including legal adoptions.

Intestate-When a person dies without a will.

Legatee-Person who receives a gift under a will.

Personal property-Intangible property, such as stock, bonds or bank accounts and tangible property such as jewelry, furniture or an automobile

Probate-Official proof of the authenticity or validity of a will.

Real Property-Land or building.

Surrogate-Elected county official who oversees probate in the State of New Jersey.

Testator/testatrix-Person who makes a will.

Trust-Property owned or managed by a person for another.

Trustee-Person holding property in trust for another.

Will-A legal declaration of the manner in which a person wishes his or her estate to be distributed after death.

Witness-Person who observes the signing of a document and attests to the signatures.

Checklist

This is a list of documents and important papers that may help settle your estate and resolve issues for your survivors should you die. Keeping them in a single known location or seeing that someone responsible has a list of the location of all these documents can save time and trouble later.

• Will and other final instructions documents
• Real Estate deeds, related records
• Death certificate
• Income tax records
• Checking/savings/CD acct. numbers and banks
• Vehicle titles and other paperwork
• Safe deposit key, number, name of holder
• Installment loans
• Stocks, bonds, mutual funds, other securities
• Birth/baptismal cert., adoption papers, etc.
• Pension and annuity records
• Social security numbers
• Insurance policies
• Marriage, divorce, prenuptial documents
• Union/company health and other benefits
• Military and civil service documentation

Telephone Numbers

• Morris County Bar Association: 973-267-6089
• Lawyer referrals: 973-267-5882
• Morris County Surrogate's Office: 973-285-6500
• FAX: 973-829-8599
• NJ Inheritance Tax Office: 609-292-5033
• NJ Motor Vehicle Information: 609-292-6500
• Legal Services of Northwest Jersey: 973-285-6911
• Social Security Administration: 800-772-1213
• US Tax Information: 800-829-1040
• Department of Veterans Affairs: 800-827-1000

 

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