Probate is often assumed to be a complicated and expensive process that must be avoided. It is not. In New Jersey, and particularly in Bergen County, probate is relatively simple and inexpensive. In Bergen County, an individual can probate a decedent’s Last Will & Testament in the Surrogate’s Court, with or without the assistance of a lawyer, in usually under an hour. You need not make an appointment; just appear between 8:30 a.m. and 4:30 p.m. on any business day with certain information and documents, as described hereafter. The Surrogate’s Court will work with you in completing the probate process. The cost is generally $100 to $200.

Probate is the process which permits an executor to transfer assets as directed by a decedent in his or her Last Will & Testament. The written document known as a Last Will & Testament, in which the testator (the person who has made the Last Will & Testament) expresses his or her intentions about the disposition of his or her assets, must be presented to the Surrogate to be “proved” in accordance with the procedures required in New Jersey.

Probate is handled differently in each of the twenty-one counties in New Jersey. For additional information about how probate is handled in Bergen County, please refer to the Surrogate’s Court’s pamphlet entitled “How to Probate a Last Will & Testament in Bergen County.” This pamphlet contains important information which will assist you in understanding and completing the probate process. The cost is generally $100 to $200.

Probate is the process which permits an executor to transfer assets as directed by a decedent in his or her Last Will & Testament. The written document known as a Last Will & Testament, in which the testator (the person who has made the Last Will & Testament is called a “testator”) to the beneficiaries (recipients) according to the testator’s Last Will & Testament. In New Jersey there are twenty-one counties, each with its own Surrogate’s Court that handles the probate process. These Surrogates’ Courts generally operate in similar fashion, but there may be slight differences in how they function. If you are probating a Last Will & Testament in Bergen County that was written by a testator in another county or state, the probate process remains fundamentally the same; however, there may be small differences in local rules or procedures that apply. Probate in Bergen County takes place in the Bergen County Surrogate’s Court, which has jurisdiction if the testator was domiciled (residing) in Bergen County at the time of death, or in some cases, if the testator owned property located exclusively in Bergen County at the time of his or her death.

Not all assets must go through probate to be transferred to a beneficiary. Assets that do not pass through probate are referred to as “non-probate assets.” Whether a particular asset must go through probate or not depends on how ownership (title) to the asset is held.

Real estate and personal property, such as bank accounts, stocks, and bonds, may be held in the testator’s name individually. These assets are generally probate assets and may require the appointment of an executor in order to transfer the property. Assets such as bank accounts, individual brokerage accounts, and other financial accounts held in the testator’s name alone may require the filing of probate documents with the Surrogate’s Court to enable the executor to collect, manage, and ultimately distribute them according to the Last Will & Testament.

Assets held by the testator and another person jointly, with a right of survivorship, may transfer directly to the surviving joint owner upon the testator’s death, without the need for probate. Examples of such jointly held assets include joint bank accounts, jointly owned real estate, and similar property interests. In such cases, the surviving joint tenant often becomes the sole owner automatically; however, it is important to check the specific title and, where appropriate, consult with professionals to understand any tax or legal implications associated with the transfer of such assets because there can be tax and other consequences.

“Beneficiary designation property” is generally non-probate property. This type of property includes life insurance policies, retirement plans, and annuities where a beneficiary is designated to receive the proceeds upon the death of the owner. When such beneficiary designations are made properly and remain in effect at the time of death, the proceeds generally pass directly to the named beneficiaries without the need for probate. It is important to ensure that beneficiary designation forms are properly completed and updated as needed to reflect the testator’s current wishes, since the language in the beneficiary designation often controls the disposition of that property. Language in the policy or plan may also be important.

A Last Will & Testament cannot be probated until ten (10) days have elapsed from the date of the testator’s death. That is, the Surrogate’s Court will not accept the Last Will & Testament to probate until after the ten (10) days have lapsed.

If you are appointed under the Last Will & Testament to manage the estate as the executor, you may wish to contact the Surrogate’s Court to arrange an appointment for probate. At that time, you will be advised concerning what documents to bring with you to the appointment, including an original death certificate, the original Last Will & Testament, and information about the decedent’s assets and family members. Generally, the Surrogate’s Court will also request that any applicable filing fees be paid at or before the time probate is completed, so it is advisable to refrain from depositing or cashing any checks made payable to the estate until your meeting at the Surrogate’s Court.

In addition, if a Last Will & Testament is not “self-proving,” meaning that it does not contain certain language and formalities that allow it to be admitted to probate without the testimony of witnesses, then additional steps may be required to prove the testator’s signature and the authenticity of the document. In such instances, the Surrogate’s Court may require affidavits or testimony from the witnesses, or other documentation, to accept the Last Will & Testament for probate. Information about whether a Last Will & Testament is self-proving and what is required if it is not may be obtained from the probate clerk at the Surrogate’s Court or an attorney.

When you arrive at the Surrogate’s Court, a probate clerk will meet with you to review the Last Will & Testament and the information you have provided about the decedent and the estate. The clerk will prepare the necessary probate documents, including a complaint for probate and a proposed judgment admitting the Last Will & Testament to probate. You will be asked to sign these documents in the presence of the clerk, and, in many cases, you will also be required to take an oath or affirmation that you will faithfully carry out the duties of executor.

If there are no problems with the Last Will & Testament or with the information supplied, the Surrogate will review the documents and, if appropriate, sign the judgment admitting the Last Will & Testament to probate. Once the judgment has been entered, the Surrogate’s Court will issue Letters Testamentary (often called Surrogate’s Certificates) that confirm your authority to act as executor. These documents provide proof to banks, brokerage firms, and others that you are authorized to manage and distribute the estate in accordance with the Last Will & Testament after it has been signed by you and your witnesses.

The probate clerk will ask you how many certified copies of the Surrogate’s Certificates you anticipate needing during administration of the estate. Most executors require multiple copies to present to financial institutions, government agencies, and others who hold estate assets. Additional Surrogate’s Certificates may be obtained later from the Surrogate’s Court if needed, but there is a fee for each additional certificate. It is important to estimate your needs as accurately as possible, since each Surrogate’s Certificate carries a separate fee and you may be required to purchase additional certificates if you discover later that more are needed to sell or transfer any real estate. The cost is $5.00 each.

Many executors find it easier to get extra Surrogate’s Certificates at the time of probate so that they do not need to return to the Surrogate’s Court later. Once the Surrogate’s Court has entered the judgment for probate and issued Letters Testamentary, the clerk will ordinarily advise you when the Surrogate’s Certificates will be ready for pickup or mailing. In most cases, this occurs within several business days. If the certificates are to be mailed, it is important that you provide an accurate mailing address to ensure timely delivery of the documents. In many cases, you can expect to receive the Surrogate’s Certificates from the Surrogate’s Court about seven (7) business days later.

Once the judgment for probate and the Letters Testamentary have been issued, the executor may begin taking steps to administer the estate, which may include collecting and safeguarding assets, notifying beneficiaries of the probate of the Last Will & Testament, paying debts and expenses, and addressing any tax filings or other requirements. In addition, the executor is generally required to send a formal “Notice of Probate of Will” to all beneficiaries and certain other interested parties, and to file proof of mailing of that notice with the Surrogate’s Court. The Surrogate’s Court can provide information and forms to assist the executor in preparing and filing the proof of mailing of the “Notice of Probate of Will.”

Following probate, the executor begins the process of settling the estate. This includes identifying, gathering, and safeguarding the decedent’s assets; identifying and paying valid debts, expenses, and taxes; and ultimately distributing the remaining property to the beneficiaries in accordance with the terms of the Last Will & Testament. The administration of an estate can take time, and may require the assistance of accountants, attorneys, or other professionals, particularly in larger or more complex estates. The executor is a fiduciary, which means that he or she must act in the best interests of the estate and the beneficiaries at all times, and must avoid self-dealing or conflicts of interest. Careful record-keeping and transparency are important aspects of fulfilling the executor’s responsibilities and protecting the executor from potential claims arising out of the administration of the estate.

The executor is entitled to a fee for services performed. Under New Jersey law, executor commissions or fees are calculated in accordance with statutory guidelines that take into account the size of the estate and the income earned by the estate during the period of administration. Generally, executor commissions are permitted as follows (on both the corpus of the estate and, in some instances, on real estate which comes into the hands of the executor):

a. 6.0% on all estate income;
b. 5.0% of the estate up to $200,000;
c. 3.5% on excess above $200,000 up to $1,000,000;
d. 2.0% on excess over $1,000,000 or such other percentage as the Superior Court may determine

There are different rules for commissions when there is more than one executor serving and in other special circumstances. In addition, there may be tax implications associated with payment of executor commissions, both to the estate and to the executor individually, because executor commissions are generally treated as taxable income to the executor. The executor may, in some cases, choose to waive or reduce commissions, depending on the circumstances, and should consider consulting with an accountant or attorney to understand the tax and financial consequences of taking or not taking the deduction for payment of the commission.

Once debts and taxes of the estate are paid and the executor is ready to distribute the remaining assets to the beneficiaries, it is common practice to obtain a “Release and Refunding Bond” from each beneficiary. This document serves two important purposes. First, it confirms that the beneficiary has received the distribution to which he or she is entitled from the estate. Second, it provides a mechanism for the estate to recover funds from the beneficiary in the unlikely event claims are subsequently made against the estate.

The “Release” is proof that the executor has made distribution in accordance with the Last Will & Testament or applicable law and that the beneficiary acknowledges receipt of the distribution. The “Refunding Bond” is a promise by the beneficiary to return some or all of the distribution to the estate if it later becomes necessary to pay additional debts, expenses, taxes, or other obligations that could not have been reasonably anticipated at the time of distribution. The Surrogate’s Court can provide forms or guidance for preparing Release and Refunding Bonds, and, in many estates, these documents are filed with the Surrogate’s Court to complete the record of the administration. For these reasons, it is often advisable for the executor to obtain a Release and Refunding Bond from each beneficiary of the testator’s estate.

These comments are necessarily only a general overview of the probate process and are not intended to serve as legal or tax advice in any particular case. Because each estate is unique, you may wish to consult with an attorney, accountant, or other professional adviser to obtain guidance specific to your circumstances. For more information, contact us via telephone at (201) 336-6700.