AAGuide
Guideto
to
Probate,
Probate,Tax
Taxand
and
Estate
EstateLitigation
Litigation
9090
Woodbridge
Woodbridge
Center
Center
Drive
Drive
Suite
Suite
900
900
Box
Box
1010
Woodbridge,
Woodbridge,
NJNJ
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www.wilentz.com
A Guide to
Probate, Tax and
Estate Litigation
© 2014
This guidebook was prepared by the
Trusts and Estates Department of
WILENTZ, GOLDMAN & SPITZER, P.A.
90 Woodbridge Center drive
Woodbridge, nJ 07095
(732) 726-7422
Meridian Center i
tWo industrial Way West
eatontoWn, nJ 07724
www.wilentz.com
ADVERTISEMENT
A GUIDE TO THE
PROBATE PROCESS
This booklet was written to give you an overview of the probate process
and insight into probate litigation. While we have made an effort to explain
the procedures in the simplest of terms, some -- particularly those who
have just lost a loved one -- may find probate confusing and distressing.
Probate litigation adds tension and anxiety to bereavement. If you find
yourself battling with family members or heirs, you may find this brief
overview helpful. While we hope you find this booklet informative and
enlightening, we recommend you consult with an attorney who specializes
in estate matters to discuss your specific situation.
TABLE OF CONTENTS
1. THE PROBATE PROCESS .............................................................. 1
Collection of Assets ............................................................... 3
Taking of Inventory ................................................................ 3
Payment of Debts, Expenses and Taxes................................. 4
Determination of Heirs.......................................................... 4
Obtaining Releases and Providing an Accounting ................ 4
Distribution of Assets ............................................................ 4
2. COMMISSIONS ................................................................................ 5
3. NEW JERSEY’S INHERITANCE AND ESTATE TAX ................ 6
A. NEW JERSEY INHERITANCE TAX ............................... 6
Exemptions ............................................................................ 8
B. INHERITANCE TAX WAIVERS ....................................... 8
Personal Property ................................................................. 8
Real Property ...................................................................... 10
Safe Deposit Boxes .............................................................. 10
C. NEW JERSEY ESTATE TAX...........................................11
4. FEDERAL ESTATE TAX ............................................................... 12
5. PROBATE LITIGATION - THE CONTESTED ESTATE.......... 14
APPENDIX A ........................................................................................ 17
Executors’ and Administrators’ Commissions ..................... 17
Commissions of Trustees Under a Will and Guardians ...... 18
APPENDIX B ........................................................................................ 21
Economic Growth and Tax Reconciliation Act of 2001....... 21
APPENDIX C ........................................................................................ 22
Decedent’s Personal Data ................................................... 22
1.
THE PROBATE PROCESS
Probate is a term which most people have heard before but never
had to consider until the trying time following the loss of a loved one. In
essence, probate is a means by which a loved one’s wishes are carried out
after his or her passing. During the difficult time following a loss, it is
important to understand the probate process. For many people, probate is
a daunting experience, with an unfamiliar procedure and new terminology.
Several of the terms that one must be familiar with are “Decedent”,
“Estate”, “Personal Representative” and “Beneficiary”. The “Decedent”
is the person who has died. The Decedent’s “Estate” is made up of the
assets standing in the Decedent’s name or passing to his estate by reason
of his death. The “Beneficiaries” are those persons entitled to inherit the
Decedent’s Estate. The “Personal Representative” is the person with the
fiduciary obligation and legal authority to administer the Estate.
If a Decedent dies with a Will, probate is the process by which
the Executor gets the Will certified as valid by the Court. The Executor is
the person designated by the Decedent in his Will to administer his Estate.
The process begins by the Executor filing the original Will, original death
certificate and a fact sheet with the Court. By law, the Court must wait
10 days following a Decedent’s death before probate will be granted to
allow time for the filing of objections to the Will. Assuming everything
is in order, and the Will is self-proving, it can be probated without delay.
A self-proving Will contains an Affidavit identifying the person making
the Will (the Testator) and the witnesses to the Will. The affidavit is a
notarized statement affirming that all the formalities of law were followed
when the Will was signed. If the Will is not self-proving, at least one of
the witnesses must appear at the Surrogate’s office to swear to the validity
of the signatures before the Will is admitted to probate. The Surrogate is
an elected official who has authority to attend to routine matters relating to
Estates and who acts as the clerk of the Court in other matters.
The Surrogate’s Court in the county in which a Decedent was
domiciled at the time of his death has jurisdiction over the Decedent’s
estate. The location of a Decedent’s domicile has great significance as
the laws concerning inheritance taxes, intestacy and spousal rights of
election vary between the states. Generally a person’s domicile is where
his primary residence is located and where he intends to return to when
away. Although the probate process usually involves only one Court, if
the Decedent owned real estate in another state an ancillary (secondary)
1
proceeding will also be required in each state in which he owned real estate.
Once a Will is accepted for probate, the Surrogate will issue
Letters Testamentary to the Executor. These Letters are the formal Court
documents giving the Executor control over the Decedent’s estate and
conferring upon him the authority to carry out the Decedent’s wishes in
accordance with the Will. The Executor will usually have to present a
certificate from the Surrogate that the letters remain outstanding in order
to transfer assets of the Estate. Once the Will is probated, the Executor has
60 days to notify all the heirs and beneficiaries named in the Will of his
appointment and of their right to have a copy of the Will on request.
If a Decedent dies intestate, meaning without a Will, a person
having an interest in the estate must come forward to be appointed by
the Surrogate. This process is known as Administration and the person
appointed by the Court is known as the Administrator. In the case of
intestacy, the procedure differs from that where there is a Will. In most
cases a surety bond will be required. Also, before a person is appointed
by the Court, all next of kin of the Decedent with equal or greater rights
to the person applying must renounce their rights to be Administrator and
approve the appointment of the applicant. The order of priority for being
appointed Administrator is governed by law, and generally, the closest
living relative is the one with priority. By way of example, the surviving
spouse has first priority to be appointed, but if he or she renounces his or
her right to appointment, a child or children may be appointed, assuming all
the other children (those with equal rights to appointment) agree. This can
sometimes be a contested and lengthy process. The Court will ultimately
decide whom to appoint after hearing from all interested parties. In certain
circumstances, the Court may decide that an independent third party
should be named. Also, if the closest heirs do not commence proceedings,
other heirs, or even creditors interested in collecting their debts, may do
so. Once the decision is made as to who will act as Administrator, the
Surrogate will issue Letters of Administration giving the Administrator the
necessary authority to handle the affairs of the estate.
2
The estate over which the Personal Representative, whether
Executor or Administrator, has authority is known as the probate estate and
consists of those assets in the Decedent’s individual name, together with
any insurance or benefits made payable to his or her estate. Joint assets
such as bank accounts between husband and wife pass by operation of law
to the surviving account holder. Likewise, insurance and other benefits
payable to a designated beneficiary pass by operation of law outside the
probate estate. It is important, however, to keep in mind the distinction
between probate estate and taxable estate. For instance, although joint
bank accounts pass by law to the surviving co-owner, such accounts are
part of the Decedent’s estate for purposes of estate and inheritance taxes.
The Personal Representative is responsible for winding up the
Decedent’s affairs and uses the authority of the Letters Testamentary
or Letters of Administration to accomplish his responsibilities. The
administration of an estate involves the collection and valuation of the
Decedent’s assets, the payment of debts, expenses of administration
and taxes, and the distribution of the remaining assets to the persons
entitled thereto. This process is described as administering or settling
the estate. This is an essential and important process. It clears the title
to the Decedent’s property, settles legitimate debts, and protects the
Personal Representative in making distribution of the estate to the
persons entitled thereto. The most important responsibilities of the
Personal Representative in settling the estate are briefly described below.
Collection of Assets
A fundamental job of every Personal Representative is
to gain control over the Decedent’s assets so that bills and taxes
can be paid and the remaining assets distributed as required under
the Will or by state law. The Personal Representative must take
care to minimize the likelihood of loss or damage to Estate assets.
Taking of Inventory
The Personal Representative must inventory the estate assets and
put together a listing, or inventory, as of the dates on which the Personal
Representative’s responsibility began and ended, for estate assets.
3
Payment of Debts, Expenses and Taxes
Expenses and debts must be paid as well as federal and state
income, estate and inheritance taxes.
Determination of Heirs
The
Representative
must must
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the names,
and
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Representative
determine
theages,
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If,
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state
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intaking
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_
Obtaining Releases and Providing an Accounting
Before making a distribution to any beneficiary of the estate, the
Personal Representative should obtain a Release from that beneficiary. A
Release is a legal document in which the beneficiary approves the actions
of the Personal Representative and acknowledges having no future claim
against the Personal Representative or the estate. Often the Release is
combined with a Receipt, which is a document in which the beneficiary
acknowledges receiving a specified distribution. Some beneficiaries
may not sign off informally and will require an Accounting (a complete
reconciliation of all funds that were received by the estate, how the funds
were spent, and what funds are left) before signing a Release. At the
request of a beneficiary, the Court will require a formal Accounting before
releasing a Personal Representative.
Distribution of Assets
When all assets have been collected, all debts, taxes and expenses
have been paid, and an informal or formal accounting approved, the
remaining assets may be distributed to the persons entitled thereto.
4
2.
COMMISSIONS
The Personal Representative is responsible for winding up the
Decedent’s affairs and is entitled to compensation for services rendered
in settling the estate. Such compensation is referred to as commissions.
Commissions are governed by state law, although a Will or a Trust may
provide for rates of compensation in excess of those statutorily prescribed.
If provisions in a Will or Trust fix commissions, then those rates usually
govern.
By law, Personal Representatives are entitled to commissions on
all income earned by the estate at a rate of 6%. By way of example,
income earned by the estate includes dividends on securities standing in
the Decedent’s name, as well as interest on accounts held by the estate.
A Personal Representative is also entitled to commissions on principal
received at the following rates: 5% on the first $200,000 of estate assets,
3.5% on the next $800,000 and 2% on the excess. By way of example
if the probate estate consists of real estate with a value of $300,000 and
securities with a value of $400,000, the Personal Representative is entitled
to corpus commissions in the amount of $200,000 at 5% plus $500,000 at
3.5%, or $27,500 in principal commissions.
In the event that there is more than one Personal Representative
the statutes provide for an additional 1% of all principal for each
additional fiduciary to be divided among all of them. However, no
Personal Representative is entitled to receive more than that to which a
single Personal Representative would be entitled. Thus, if there were two
Personal Representatives for the $700,000 estate described above, they
would split $34,500 -- ($27,500 plus $7,000 [1% of $700,000]). They
could divide this amount between themselves as they deemed appropriate
subject to the condition that neither could receive more than $27,500.
Commissions are chargeable to and payable from the Decedent’s
estate. Commissions represent payment for services rendered and as such
are includable in the Personal Representative’s taxable income in the year
received. As a general matter, commissions may be paid without Court
allowance although they may be reduced by the Court if a beneficiary
demonstrates that the services rendered were materially deficient or that
the actual pains, trouble and risk involved in settling the estate were
substantially less than generally required for estates of comparable size.
5
Trustees named under a Will are also entitled to commissions
for their services in administering Trusts. They are entitled to annual
commissions on income and principal, as well as commissions on the
termination of or distributions from the Trust. Trustee commissions are
prescribed by statute, although the will or trust instrument can establish
higher or lower rates. Corporate trustees can establish their own rates,
which rates will be respected provided they are reasonable.
3.
3.
NEW JERSEY’S INHERITANCE
AND ESTATE TAX
Depending upon the size of the Decedent’s estate, and who the
beneficiaries are, estate taxes may be due. There are three levels of estate
taxation to consider: New Jersey Inheritance Tax, New Jersey Estate Tax,
and Federal Estate Tax.
A.
NEW JERSEY INHERITANCE TAX
The State of New Jersey imposes a transfer Inheritance Tax,
at graduated rates, on property which passes from a Decedent to a
beneficiary.
In many instances, if all of a Decedent’s property passes to
a surviving spouse, children, stepchildren, parents, grandparents or
grandchildren, it will not be necessary to file an Inheritance Tax return
with the Division of Taxation. In such cases, if there was any real property
in the name of the Decedent, a Form L-9 may be filed to release the State’s
lien on the real property.
If a death occurs on or after January 1, 1985, property passing to
a surviving spouse is entirely exempt from the tax. If a death occurs on
or after July 1, 1988, property passing to surviving parents, grandparents,
children, stepchildren or grandchildren is entirely exempt from the tax.
In essence, the revised New Jersey Transfer Inheritance Tax Act of
1985 provides for four classifications of beneficiaries.
•
6
Fathers, mothers, grandparents, wives, husbands, child or
children of the Decedent, adopted child or children, any
issue of any child or legally adopted child of a Decedent, or
a mutually acknowledged child or stepchild, are all part of
Class “A”, and are exempt from inheritance taxes.
•
Brothers, sisters, daughters-in-law and sons-in-law, included
in Class “C”, are exempt for the first $25,000. When the
bequest is in excess of $25,000 and up to $1,100,000, they
must pay 11%, up to $1,400,000 the tax is 13%, up to
$1,700,000 the tax is 14%. Over $1,700,000 the tax is 16%.
•
Bequests for charitable or public purposes to the State of New
Jersey, an educational institution, church, hospital, orphans’
asylum, public library and certain other non-profit agencies
also are exempt from inheritance taxes. They fall into Class
“E”.
•
All others, included in Class “D”, are exempt from taxation
if the total amount is no more than $499. They pay a 15%
tax on any amount up to $700,000 and 16% for any amount
beyond that.
•
Class “B” was eliminated from the law in an earlier revision
in 1963.
The return should be filed with the Individual Tax Audit Branch,
Inheritance and Estate Tax, in Trenton.
The return and associated tax are due eight months after the
Decedent’s death.
An inheritance tax return must be filed and the tax paid on the
transfer of real or personal property for:
•
A resident Decedent for the transfer of real or tangible
personal property located in New Jersey or intangible
personal property wherever situated.
•
A nonresident Decedent for the transfer of real or tangible
personal property located in New Jersey. No tax is imposed
on non-resident Decedents for intangible personal property
wherever located.
7
A return must be filed whenever any tax is due or when benefits
are passing to other than Class “A” beneficiaries. The tax is a lien on all
property for 15 years, unless paid sooner or secured by acceptable bond.
Interest on unpaid tax will accrue at the rate of 10% per annum beginning
8 months after date of Decedent’s death.
For up-to-date information about New Jersey’s Transfer Inheritance
Tax laws, call (609) 292-5033, the New Jersey Inheritance Tax Office.
Exemptions
In addition to the exemptions listed under “Beneficiary Classes
and Tax Rates”, no tax is imposed on:
B.
•
Transfers having an aggregate value of less than $500.
•
Life insurance proceeds paid to a named beneficiary.
•
Payments from the New Jersey Public Employees’ Retirement
System, the New Jersey Teachers’ Pension and Annuity
Fund and the New Jersey Police and Firemen’s Retirement
System.
•
Federal Civil Service Retirement benefits payable to
a Beneficiary other than the estate or the Executor or
Administrator of a Decedent’s estate.
•
Annuities payable to survivors of military retirees.
INHERITANCE TAX WAIVERS
Personal Property
8
a.
Waivers are not required for automobiles, household
goods, accrued wages or mortgages, but these assets must
be reported in the inheritance tax return filed.
b.
Under the current statute, a membership certificate or stock
in a cooperative housing corporation held in the name of
a Decedent and a surviving spouse as “joint tenants with
right of survivorship” is exempt. However, a waiver is
required to transfer ownership to the survivor.
c.
In the estate of a resident Decedent, banks, savings and
loan associations, and building and loan associations may
release 50% of all funds on deposit to the beneficiary prior
to the issuance of a waiver. The full amount on deposit as
of the date of death of the Decedent must be listed in the
inheritance tax return and will eventually require a waiver.
This 50% procedure is referred to as a blanket waiver and
is not available for the transfer of stocks and bonds. For a
detailed explanation see N.J.A.C. 18:26-11.16.
d.
A Self-Executing Waiver, Form L-8, has been created
for Class “A” beneficiaries in the estate of a resident
Decedent. This form may be used in most cases to
transfer bank accounts, stocks, and bonds in the following
circumstances:
1)
When transfers are to a surviving spouse in estates
of Decedents’ dying on or after January 1, 1985,
or
2)
When transfers are to a surviving Spouse or
any other Class “A” beneficiary in estates of
Decedents dying on or after July 1, 1988.
Proper use of this form may eliminate the need to file a formal
Inheritance Tax return. However, the Form L-8 cannot be used for the
transfer of real estate.
The completed Form L-8 is to be filed with the financial institution
or transfer agent which will then be authorized to release the subject asset.
9
Real Property
a.
Unpaid inheritance taxes constitute a lien on real property
and tax waivers are required to transfer real estate.
However, real property held by husband and wife as
“tenants by the entirety” in the estate of the spouse dying
first need not be reported and may be transferred without
a waiver, regardless of the date of death.
b.
A Request For A Real Property Tax Waiver, Form L-9 has
been created for Class “A” beneficiaries in the estates of
resident Decedents. When either of the following two
conditions exist, this form may be used if the entire estate
is untaxable and passing to Class “A” beneficiaries and
the only reason to file a return is to obtain a waiver to
transfer real property:
1)
Transfers are to a surviving spouse in estates of
Decedents dying on or after January 1, 1985 and
the Decedent’s interest was in the name of the
Decedent alone.
2)
Transfers are to a surviving spouse or any other
Class “A” beneficiary in estates of Decedents
dying on or after July 1, 1988.
Use of this form may eliminate the need to file a formal inheritance
tax return.
This form is to be filed with the Individual Tax Audit Branch,
Inheritance and Estate Tax in Trenton. If the form is in order, the
necessary waiver(s) will be promptly issued.
Safe Deposit Boxes
Safe deposit boxes are no longer inventoried by the New Jersey
Division of Taxation. On September 30, 1992, the Division issued a blanket
release in the form of a letter from the Director, Division of Taxation, to all
banking institutions, safe deposit companies, trust companies, and other
10
institutions which serve as custodians of safe deposit boxes. The contents
of the boxes may be released without inspection by the Division.
C.
NEW JERSEY ESTATE TAX
In addition to the inheritance tax, New Jersey imposes a separate
estate tax. An estate may be subject to the New Jersey estate tax even
though there is no New Jersey Inheritance Tax payable. For Decedents
with a date of death prior to January 1, 2002 the New Jersey estate tax
was designed to absorb the maximum credit for State inheritance, estate,
succession or legacy taxes allowable in the Federal estate tax proceeding.
It did not increase the estate’s total estate tax obligation.
The New Jersey estate tax was revised on July 1, 2002 and made
to apply retroactively to Decedents dying after December 31, 2001. The
revised New Jersey estate tax is de-coupled from the Federal estate tax.
The New Jersey estate tax is now imposed upon the transfer of
the estate of every resident Decedent that would have been subject to a
Federal estate tax under the provisions of the Internal Revenue Code in
effect on December 31, 2001.
The following summarizes the filing requirements and important
provisions of the revised estate tax:
•
The person or corporation responsible for payment of the
tax may choose the Form 706 method or the Simplified Tax
System (Alternative) method of filing the New Jersey estate
tax return. The Form 706 method is based upon the provisions
of the Internal Revenue Code in effect on December 31, 2001
(2001 Federal estate tax return). The Simplified Tax System
may only be used in those situations where a Federal estate
tax return has not and will not be filed and is not required to be
filed with the Internal Revenue Service. The Simplified Tax
System is not intended for use in all estates. The Simplified
Tax System requires that a Form IT-Estate be prepared and
filed along with a New Jersey inheritance tax return (Form
IT-R) completed in accordance with the provisions of the
inheritance tax statute in effect on December 31, 200l.
•
A New Jersey estate tax return must be filed if the Decedent’s
11
gross estate as determined in accordance with the provisions
of the Internal Revenue Code in effect on December 31, 2001
exceeds $675,000. It must be filed within nine months of the
Decedent’s death.
•
The New Jersey estate tax is due on the Decedent’s date of
death and must be paid within nine months.
Unlike the prior New Jersey estate tax, the revised estate tax is a
lien on all the property of a Decedent. Additionally, the statute provides
that the Decedent’s property may not be transferred without the written
consent of the Director. The tax waiver form has been modified to release
both the inheritance and the estate tax lien and permit the transfer of
the property listed thereon for both inheritance and estate tax purposes.
Generally, regulations which previously pertained only to inheritance tax
waivers have been amended to apply also to estate tax waivers.
For estates of Decedent’s dying on or after March 1, 1992, interest
accrues at the rate of 10% per annum on any New Jersey estate tax not paid
within nine months of the Decedent’s date of death unless an extension
of time to file the Federal estate tax return is granted. The Director of
the Division of Taxation may then reduce the interest rate of 6% per
annum on any New Jersey estate tax not paid within eighteen months of
the Decedent’s death or within 60 days of the final determination of the
Federal estate tax by the Federal authorities, whichever is later.
4.
FEDERAL ESTATE TAX
At the time of death, a Federal estate tax is imposed on the
transfer of property by a Decedent. Property transferred at death includes
the property owned in one’s sole name at death. This might include, for
example, a residence, stocks, bonds and bank certificates of deposit. Also
included are items of personal property such as household furnishings and
jewelry. Property that is not owned in one’s sole name, or directly at the
time of death may also be subject to tax for Federal estate tax purposes.
This will include property placed into a trust that can be revoked.
The purpose of the Federal estate tax is to impose tax on the
transfer of wealth at death, without regard to how that property transfer is
accomplished. For example, if anyone will succeed to property ownership
12
at the time of death by reason of the property being held as “joint tenants
with the right of survivorship”, and purchased with no contribution by the
other joint owner, the estate tax will apply. Similarly, if one holds “incidents
of ownership” (for example, the right to designate the beneficiary) in an
insurance policy on his life, the proceeds will be includable in the gross
estate even if the proceeds are not payable to the estate. Also includable
will be property previously transferred in trust but over which one retained
certain rights and powers under the trust instrument. Some limited types
of property will be included even where one has given up all rights in
property, if the termination of such rights occurs within three years of
death.
In 2002 and 2003, if there were no lifetime taxable gifts, the first $1
million of assets was protected from
from estate
estate taxation.
taxation. This is accomplished
through the availability of an “applicable credit amount.” This tax credit
is also available during lifetime and, accordingly, may have been partially
or completely used by gifts made during life. If completely used during
life, the credit would not be available to protect assets transferred at death
from the
amount
(known
as the
the application
applicationofofthe
theFederal
Federalestate
estatetax.
tax.TheThe
amount
(known
as
“applicable
exclusion
amount”)
thatthat
cancan
be be
protected
under
credit
the “applicable
exclusion
amount”)
protected
fromthis
estate
tax
increased
until itgradually
reached until
$3.5 itmillion
in$3.5
2009,
the final
year
under this gradually
credit increased
reached
million
in 2009,
before
estate
taxthe
was
to terminate
2010 and
be replaced
withthea
the finalthe
year
before
estate
tax was tointerminate
in 2010.
Note that
carryover
basis regime.
See Appendix
B. gift
Notetax
that
the amount
excluded
amount excluded
by the credit
for lifetime
purposes
remains
at $1
by
the
credit
for
lifetime
gift
tax
purposes
remained
at
$1
million,
so
more
million, so more credit is available for estate tax purposes than for gift tax
credit
was available
for estate
purposes
than itforseems
gift tax
purposes.
purposes.
At this time,
in thetax
Spring
of 2010,
unlikely
that the
repeal of the Federal Estate Tax will be permanent and it is more likely that
the amount
In December
2010,
Congress
excluded will
remain
at $3.5reinstated
million. the estate tax for 2010
with an exemption of $5,000,000, but allowed estates to elect to have the
carryover
basis regime
apply instead. Congress
also temporarily
extended
5.
5.
PROBATE
LITIGATION
the new 2010 estate tax
for two
years, until December
31, 2012, but with
THE
CONTESTED
ESTATE
a $5,000,000 gift tax exemption and no carryover basis provision. In 2012,
Congress
made the
estate and
gift taxexist
exemption
Common causes
of probate
litigation
when: of $5,250,000 (adjusted
for inflation in 2013) permanent, (increased to $5,340,000 in 2014 due to
the inflation
with afor
maximum
estate
tax bracket
of 40%.
1) adjustment)
A Will offered
probate is
challenged
as invalid
because
it was the result of fraud, duress, mistake or undue
influence exerted upon the Testator;
2)
there was no clear succession for the family business;
3)
there was not enough money to pay the taxes;
13
repeal
of
Federal
Tax
be
permanent
and
repeal
of the
theexcluded
Federal Estate
Estate
Tax will
will
be
permanent
and it
it is
is more
more likely
likely that
that
the
amount
will
remain
at
$3.5
million.
the
amount
excluded
will
remain
at
$3.5
million.
the amount
amount excluded
excluded will
will remain
remain at
at $3.5
$3.5 million.
million.
the
5.
5.
5.
5.
4)
5.
PROBATE
LITIGATION
5.
PROBATE
LITIGATION
5.
PROBATE
LITIGATION
the Will
failed to address
distribution of--- the jewelry or
5.
PROBATE
LITIGATION
THE CONTESTED
ESTATE
CONTESTED
THE
CONTESTED
ESTATE
otherTHE
heirlooms;
THE
CONTESTED ESTATE
ESTATE
Common
causes
probate
Common
causes of
of
probate litigation
litigation exist
exist when:
when:
Common
of
named litigation
Executor exist
isn’t when:
trusted or respected by other
Common5)causes
causesthe
of probate
probate
litigation
exist
when:
family
members;
1)
A
Will
offered
for
probate
is
challenged
as
invalid
because
1)
A
Will
offered
for
probate
is
challenged
as
invalid
because
1)
A
Will
offered
for
probate
is
challenged
as
invalid
because
1)
A
Will
offered
for
probate
is
challenged
as
invalid
because
it
was
the
result
of
fraud,
duress,
mistake
or
undue
it
was
the
result
of
fraud,
duress,
mistake
or
undue
was
the
result
of
fraud,
duress,
mistake
or
undue
6)
ait
child
was
omitted,
or
is
to
receive
less
than
the
other
it
was
the
result
of
fraud,
duress,
mistake
or
undue
influence
exerted
upon
the
Testator;
influence
exerted
upon
the
Testator;
influence exerted
exerted upon
upon the
the Testator;
Testator;
children;
influence
2)
there
was
clear
the
business;
2)
there
was no
no
clear succession
succession for
for
the family
family
business;
2)
there
no
for
family
7)
children
thesuccession
first marriage
object
the second
2)
there was
wasfrom
no clear
clear
succession
for the
the
familytobusiness;
business;
4)
the
Will
failed
to
distribution
of
the
jewelry
or
spouse’s
interest
inaddress
themoney
estate;
3)
there
was
not
enough
to
pay
the
taxes;
4)
the
Will
failed
to
address
distribution
of
the
jewelry
or
3)
there
was
not
enough
money
to
pay
the
taxes;
4)
the
Will
failed
to
address
distribution
of
the
jewelry
or
3)
there
was
not
enough
money
to
pay
the
taxes;
4)
the
Will
failed
to
address
distribution
of
the
jewelry
or
3)
there
was
not
enough
money
to
pay
the
taxes;
4)
the
Will
failed
to
address
distribution
of
the
jewelry
or
other
heirlooms;
other
heirlooms;
4)
the
Will
failed
to
address
distribution
of
the
jewelry
or
other
heirlooms;
4)
the
Will
failed
to
address
distribution
of
the
jewelry
or
other
heirlooms;
13
4)
the
Will
failed
to
address
distribution
of
the
jewelry
or
8)
second
spouse
wants
to
separate
financial
ties
from
other
heirlooms;
13
other
heirlooms;
13
13
other
heirlooms;
other
heirlooms;
5)
the
named
Executor
trusted
or
respected
by
other
children
from
the firstisn’t
marriage;
5)
the
named
Executor
isn’t
trusted
or
respected
by
other
5)
the
named
Executor
isn’t
trusted
or
respected
by
other
5)
the
named
Executor
isn’t
trusted
or
respected
by
other
5)
the
named
Executor
isn’t
trusted
or
respected
by
other
family
members;
family
members;
5)
the
named
Executor
isn’t
trusted
or
respected
by
other
family
members;
5)
the
named
Executor
isn’t
trusted
or
respected
by
other
family
members;
5)
the
named
Executor
isn’t
trusted
or
respected
by
other
9)
titling
of
the
assets
are
inconsistent
with
the
terms
of
family
members;
family
members;
family
members;
members;
6)
aafamily
was
omitted,
or
is
to
receive
less
than
the
other
thechild
Will;
6)
was
omitted,
or
is
to
receive
less
than
the
other
6)
aa child
child
was
omitted,
or
is
to
receive
less
than
the
other
6)
child
was
omitted,
or
is
to
receive
less
than
the
other
6)
a
child
was
omitted,
or
is
to
receive
less
than
the
other
children;
children;
6)
a
child
was
omitted,
or
is
to
receive
less
than
the
other
children;
6)
a
child
was
omitted,
or
is
to
receive
less
than
the
other
children;
6)
achildren;
was omitted,
is to receive
less than
other
10)
thechild
beneficiaries
do notorreceive
an accounting
of the estate
children;
children;
children;
7)
children
from
the
first
marriage
to
the
second
and believe
there
was
more
wealthobject
than the
inheritance
7)
children
from
the
first
marriage
object
to
the
second
7)
children
from
the
first
marriage
object
to
the
second
7)
children
from
the
first
marriage
object
to
the
second
7)
children
from
the
first
marriage
object
to
the
second
spouse’s
interest
in
the
estate;
received.
spouse’s
interest
in
the
estate;
7)
children
from
the
first
marriage
object
to
the
second
spouse’s
interest
in
the
estate;
7)
children
from
the
first
marriage
object
to
the
second
spouse’s
interest
in
the
estate;
7)
children
from
the
first
marriage
object
to
the
second
spouse’s
interest
in
the
estate;
spouse’s
interest
in
the
estate;
spouse’s
interest
in
the
estate;
If
litigation
is
commenced,
it
is
generally
filed
in
the
county
where
spouse’s
interest
in wants
the estate;
8)
the
second
spouse
wants
to separate
separate financial
ties
from
8)
the
second
spouse
to
financial
ties
from
8)
the
second
spouse
wants
to
separate
financial
ties
from
8)
the
second
spouse
wants
to
separate
financial
ties
from
the Decedent
resided
andfrom
isspouse
often
commenced
with an
Order ties
to Show
8)
the
second
wants
to
separate
financial
from
children
the
first
marriage;
children
from
the
first
marriage;
8)
the
second
spouse
wants
to
separate
financial
ties
from
children
from
the
first
marriage;
8)
the
second
spouse
wants
to
separate
financial
ties
from
Cause which
to:
1)
overturn
a
Will
offered
for
Probate;
2)
remove
an
children
from
the
first
marriage;
8) seeks
the
second
spouse
wants
to
separate
financial
ties
from
children
from
the
first
marriage;
children
from
the
first
marriage;
children
from
the
first
marriage;
Executor;
or
3)
demand
an
accounting.
Overturning
a
Will
is
most
often
children
from
theassets
first marriage;
9)
the
titling
of
the
are
inconsistent
with
the
terms
of
9)
the
titling
of
the
assets
are
inconsistent
with
the
terms
of
9)
the
titling
of
the
assets
are
inconsistent
with
the
terms
of
supported
by
a
claim
that
undue
influence
caused
the
Decedent
to
execute
9)
the
titling
of
the
assets
are
inconsistent
with
the
terms
of
9)
titling
of
the
assets
are
inconsistent
with
the
terms
of
the
Will;
the
Will;
9)
titling
of
the
assets
are
inconsistent
with
the
terms
of
the
Will;
9)
titling
of
the
assets
are
inconsistent
with
the
terms
of
a Will that
did
not
reflect
his
or
her
intent.
Alternatively,
a
claim
is
often
the
Will;
9)
titling
of
the
assets
are
inconsistent
with
the
terms
of
the
Will;
the
Will;
filed that10)
the Decedent
did
not
have
the
requisite
cognitive
mindset
or
the
Will;
Will;
the
do
receive
an
accounting
of
estate
10)
the beneficiaries
beneficiaries
do not
not
receive
an
accounting
of the
the
estate
beneficiaries
not
receive
an
accounting
the
estate
capacity10)
to knowthe
what
he or shedo
was
signing,
who
the naturalof
objects
of
10)
the
beneficiaries
do
not
receive
an
accounting
of
the
estate
10)
the
beneficiaries
do
not
receive
an
accounting
of
the
estate
and
believe
there
was
more
wealth
than
the
inheritance
and
believe
there
was
more
wealth
than
the
inheritance
the
beneficiaries
do
not
receive
an
accounting
of
the
estate
and
believe
there
was
more
wealth
than
the
inheritance
his or her10)
bounty
are
or
how
much
wealth
he
or
she
had.
Fraud
is
another
10)
the
beneficiaries
do
not
receive
an
accounting
of
the
estate
and
believe
there
than
the
inheritance
10)
the
beneficiaries
dowas
not more
receivewealth
an accounting
of
the estate
and
believe
there
was
more
wealth
than
the
inheritance
received.
received.
and
believe
there
was
more
wealth
than
the
inheritance
cause of action often
alleged
in
these
cases.
received.
and
believe
there
was
more
wealth
than
the
inheritance
received.
and
believe there was more wealth than the inheritance
received.
received.
received.
If
litigation
is
commenced,
it
is
generally
filed
in
the
county
where
received.
If
litigation
is
commenced,
it
is
generally
filed
in
the
county
where
There
are
times
when estate
or probate
litigation
cannot
be
If
litigation
is
commenced,
it
is
generally
filed
in
the
county
where
If
litigation
is
commenced,
it
is
generally
filed
in
the
county
where
the
Decedent
resided
and
is
often
commenced
with
an
Order
to
Show
If
litigation
is
commenced,
it
is
generally
filed
in
the
county
where
the
Decedent
resided
and
is
often
commenced
with
an
Order
to
Show
If
litigation
is
commenced,
it
is
generally
filed
in
the
county
where
avoided.
However,
litigation
can
often
be
avoided
if:
1)
communication
the
Decedent
resided
and
is
often
commenced
with
an
Order
to
Show
If
is
is
filed
in
the
county
where
the
Decedent
resided
and
is
often
commenced
with
an
Order
to
Show
Cause
which
seeks
to:
1)
overturn
aa it
offered
for
Probate;
2)
remove
an
If litigation
litigation
is commenced,
commenced,
itWill
is generally
generally
filed
in
the
county
where
the
Decedent
resided
and
is
often
commenced
with
an
Order
to
Show
Cause
which
seeks
to:
1)
overturn
Will
offered
for
Probate;
2)
remove
an
the
Decedent
resided
and
is
often
commenced
with
an
Order
to
Show
can
be
established
by
the
family
members,
with
the
Executors
and
Cause
which
seeks
to:
1)
overturn
a
Will
offered
for
Probate;
2)
remove
an
the
Decedent
resided
and
is
often
commenced
with
an
Order
to
Show
Cause
which
seeks
to:
1)
overturn
a
Will
offered
for
Probate;
2)
remove
an
Executor;
or
3)
demand
an
accounting.
Overturning
aaan
Will
is
most
often
the
Decedent
resided
and
is
often
commenced
with
Order
to
Show
Cause
which
seeks
to:
1)
overturn
a
Will
offered
for
Probate;
2)
remove
an
Executor;
or
3)
demand
an
accounting.
Overturning
Will
is
most
often
Cause
which
seeks
to:
1)
overturn
a
Will
offered
for
Probate;
2)
remove
an
Trustees
and
their
respective
professionals
(attorney
and
accountant)
from
Executor;
or
3)
demand
an
accounting.
Overturning
a
Will
is
most
often
Cause
which
seeks
to:
1)
overturn
a
Will
offered
for
Probate;
2)
remove
an
Executor;
or
3)
demand
an
accounting.
Overturning
a
Will
is
most
often
supported
by
a
claim
that
undue
influence
caused
the
Decedent
to
execute
Cause
which
seeks
to:
1)
overturn
a
Will
offered
for
Probate;
2)
remove
an
Executor;
or
3)
demand
an
accounting.
Overturning
a
Will
is
most
often
supported
by
a
claim
that
undue
influence
caused
the
Decedent
to
execute
Executor;
or
3)
demand
an
accounting.
Overturning
a
Will
is
most
often
the
beginning
of
the
probate
process;
2)
issues
are
raised
by
beneficiaries
supported
by
a
claim
that
undue
influence
caused
the
Decedent
to
execute
Executor;
or
3)
demand
an
accounting.
Overturning
a
Will
is
most
often
by
a
claim
that
undue
influence
caused
the
Decedent
to
execute
asupported
Will
that
did
not
reflect
his
or
her
intent.
Alternatively,
a
claim
is
Executor;
or
3)
demand
an
accounting.
Overturning
a
Will
is
most
often
by
aa not
claim
that
undue
influence
caused
the
Decedent
to
execute
asupported
that
did
reflect
his
or
her
intent.
Alternatively,
aa claim
is
often
by
claim
that
undue
influence
caused
the
Decedent
to
execute
orWill
their
professionals
with
proposed
resolutions
rather
than
threats;
asupported
Will
that
did
not
reflect
his
or
her
intent.
Alternatively,
claim
is
often
by
aaDecedent
claim
that
undue
influence
caused
the
Decedent
to
execute
asupported
Will
that
did
not
reflect
his
or
her
intent.
Alternatively,
a
claim
is
often
filed
that
the
did
not
have
the
requisite
cognitive
mindset
or
by
claim
that
undue
influence
caused
the
Decedent
to
execute
asupported
Will
that
did
not
reflect
his
or
her
intent.
Alternatively,
a
claim
is
often
filed
that
the
Decedent
did
not
have
the
requisite
cognitive
mindset
or
afiled
Will
that
did
not
reflect
his
or
her
intent.
Alternatively,
a
claim
is
often
that
the
Decedent
did
not
have
the
requisite
cognitive
mindset
or
acapacity
Will
that
did
not
reflect
his
or
her
intent.
Alternatively,
a
claim
is
often
that
the
Decedent
did
not
have
the
requisite
cognitive
mindset
or
to
know
what
he
or
she
was
signing,
who
the
natural
objects
of
afiled
Will
that
did
not
reflect
his
or
her
intent.
Alternatively,
a
claim
is
often
filed
that
the
Decedent
did
not
have
the
requisite
cognitive
mindset
or
capacity
to
know
what
he
or
she
was
signing,
who
the
natural
objects
of
filed
that
the
Decedent
did
not
have
the
requisite
cognitive
mindset
or
capacity
to
know
what
he
or
she
was
signing,
who
the
natural
objects
of
14
filed
that
the
Decedent
did
not
have
the
requisite
cognitive
mindset
or
capacity
to
know
what
he
or
she
was
signing,
who
the
natural
objects
of
his
orthat
hertobounty
bounty
are
or he
how
much
wealth
he
orwho
she had.
had.
Fraudmindset
is another
another
filed
the
Decedent
did
not
have
the
requisite
cognitive
or
capacity
know
what
or
she
was
signing,
the
natural
objects
of
his
or
her
are
or
how
much
wealth
he
or
she
Fraud
is
capacity
to
know
what
he
or
she
was
signing,
who
the
natural
objects
of
his
or
her
bounty
are
or
how
much
wealth
he
or
she
had.
Fraud
is
another
capacity
know are
what
ormuch
she was
signing,
the natural
of
his
or hertobounty
or he
how
wealth
he orwho
she had.
Fraud objects
is another
supported by a claim that undue influence caused the Decedent to execute
a Will that did not reflect his or her intent. Alternatively, a claim is often
filed that the Decedent did not have the requisite cognitive mindset or
capacity
to know
whatmeetings
he or shewith
wasclear
signing,
whoare
thepart
natural
of
3)
regularly
scheduled
agendas
of theobjects
process;
his
or
her
bounty
are
or
how
much
wealth
he
or
she
had.
Fraud
is
another
4) reasonable expectations and timelines are established early in the
cause ofprocess;
action often
alleged
in these
cases. with an accounting.
probate
and 5)
the process
concludes
There are times
when
estate takes
or probate
litigation
cannot and
be
Accomplishing
these
objectives
patience,
understanding
avoided.
However,
litigation
can
often
be
avoided
if:
1)
communication
perseverance. One must put emotions aside, roll up the sleeves and do
can be
the family lawyers,
members,judges
with and
the mediators
Executorsoften
and
what
hasestablished
to be done.byExperienced
Trustees
and
their
respective
professionals
(attorney
and
accountant)
from
take time with family members to help find middle ground and settle all the
the beginning
of the probate
process;
2)you
issues
are raised
beneficiaries
disputes.
If litigation
is on the
horizon,
should
find anbyestate
attorney
or their
professionals
with proposed
resolutions
rather
than
who
will not
only competently
litigate, but
can help you
settle
the threats;
case.
3) regularly scheduled meetings with clear agendas are part of the process;
4) reasonable
expectations
are established
the
Allegations
of fraud,and
lacktimelines
of testamentary
capacity,early
and in
undue
14
probate process;
and 5)
the process concludes
with
accounting.
influence
now seem
commonplace
particularly
in an
Wills
wherein a child
was omitted or treated differently from other children, a proffered Will
these objectives
understanding
and
providedAccomplishing
a different dispositive
schemetakes
thanpatience,
a prior Will,
or a sizeable
perseverance.
Onetomust
put emotions
roll up
the sleeves
and do
bequest
was made
a charity,
paramouraside,
or friend.
Examples
of unnatural
what
has
to
be
done.
Experienced
lawyers,
judges
and
mediators
often
Wills, deathbed Wills, or Wills executed in secrecy fill both law libraries
take
time
with
family
members
to
help
find
middle
ground
and
settle
all
the
and Court dockets. What makes undue influence a staple used by probate
disputes. isIfthat
litigation
is on the
you should
findscenarios
an estateincluding
attorney
litigators
such claims
canhorizon,
arise in many
different
who
will
not
only
competently
litigate,
but
can
help
you
settle
the
case.
both well-intentioned acts as well acts of coercion. Indeed, undue influence
is one of the most common challenges to the validity of a Will. One study
Allegations
fraud,
lackincluded
of testamentary
undue
noted that
74% of all of
Will
contests
allegationscapacity,
of undueand
influence.
influence
now
seem
commonplace
particularly
in
Wills
wherein
a
child
Jeffrey A. Schoenblum, Will Contests - An Empirical Study, 22 Real Prop.,
was
omitted
or
treated
differently
from
other
children,
a
proffered
Will
& Trust J. 607, 646-652 (1987).
provided a different dispositive scheme than a prior Will, or a sizeable
bequest Although
was made to
a charity,
paramour
or friend. remove
Examples
unnatural
there
is no way
to completely
theofpossibility
Wills,
deathbed
Wills,
or
Wills
executed
in
secrecy
fill
both
law
libraries
of a Will contest on the grounds of undue influence, the precautions
set
and
Whatormakes
unduethe
influence
a staple
used byofprobate
forthCourt
abovedockets.
might deter
minimize
likelihood
of success
a Will
litigators
contest. is that such claims can arise in many different scenarios including
both well-intentioned acts as well acts of coercion. Indeed, undue influence
is one of the most common challenges to the validity of a Will. One study
noted that 74% of all Will contests included allegations of undue influence.
Jeffrey A. Schoenblum, Will Contests - An Empirical Study, 22 Real Prop.,
& Trust J. 607, 646-652 (1987).
Although there is no way to completely remove the possibility
of a Will contest on the grounds of undue influence, the precautions set
forth above might deter or minimize the likelihood of success of a Will
contest.
15
NOTICE
Before making your choice of attorney, you should give this matter
careful thought. The selection of an attorney is an important decision.
If this guidebook is inaccurate or misleading, report same to the
Committee on Attorney Advertising, Hughes Justice Complex, CN 037,
Trenton, NJ 08625.
16
APPENDIX A
EXECUTORS’ AND ADMINISTRATORS’ COMMISSIONS
The applicable statutes are laid out below.
Income commissions (3B:18-13)
Commissions in the amount of 6% may be taken without Court
allowance on all income received by the fiduciary. For the purposes of
this section, income which is withheld from payment to a fiduciary or
fiduciaries pursuant to any law of this State, or of the United States, or
any other state, country or sovereignty, or of any political subdivision or
governmental unit of any of the foregoing, requiring the withholding for
income tax or other tax purposes, shall be deemed to be income received
by the fiduciary, and shall be subject to income commissions as provided
in this section in the same manner as if actually received by the fiduciary.
Corpus commissions (3B:18-14)
Commissions on all corpus received by the fiduciary may be taken
as follows:
5% on the first $200,000 of all corpus received by the fiduciary;
3.5% on the excess over $200,000 up to $1,000,000;
2% on the excess over $1,000,000; and
1% of all corpus for each additional fiduciary provided that no
one fiduciary shall be entitled to any greater commission than that which
would be allowed if there were but one fiduciary involved.
Such commissions may be reduced by the Court having jurisdiction
over the estate only upon application by a beneficiary adversely affected
upon an affirmative showing that the services rendered were materially
deficient or that the actual pains, trouble and risk of the fiduciary in settling
the estate were substantially less than generally required for estates of
comparable size.
L.1981, c. 405, § 3B:18-14, eff. May 1, 1982. Amended by L.1983 c. 394,
§ 1, eff. Dec. 14, 1983, L.2000, c. 29, § 1, eff. June 16, 2000.
17
COMMISSIONS OF TRUSTEES UNDER
A WILL AND GUARDIANS
Income commissions (3B:18-24)
Commissions in the amount of 6% may be taken without Court
allowance on all income received by the fiduciary. For the purposes of this
section, income which is withheld from payment to the fiduciary pursuant
to any law of this State, or of the United States, or any other state, country
or sovereignty or of any political subdivision or governmental unit of any
of the foregoing, for income tax or other tax purposes, shall be deemed
to be income received by the fiduciary, and shall be subject to income
commissions as if actually received by the fiduciary.
L.1981, c. 405, § 3B:18-24, eff. May 1, 1982.
Taking annual amounts on account of corpus commissions (3B:18-25)
a.
Fiduciaries may annually, without Court allowance, take
commissions on corpus (including accumulated income which has been
invested by the fiduciary) in the amount of $5.00 per thousand dollars
of corpus value on the first $400,000 of value of corpus and $3.00 per
thousand dollars of the corpus value in excess of $400,000.
b.
Notwithstanding the provisions of subsection a. of this
section, if the fiduciary is a banking institution, foreign bank or savings
and loan association authorized to exercise fiduciary powers, the fiduciary
shall be entitled to such commissions as may be reasonable.
c.
Notwithstanding the provisions of subsection a. of
this section, a fiduciary may take a minimum commission of $100.00
annually.
d.
The value of the corpus for the purpose of this section
shall be the “presumptive value” as defined in N.J.S.3B:18-18 or, at the
option of the fiduciary, the value at the end of the period.
e.
Upon application of a person interested in the trust or
guardianship, a court may review the reasonableness of the commissions
18
of the fiduciary, provided, however, the fiduciary shall be entitled to
receive at least the compensation provided for all fiduciaries as set forth in
subsections a. and c. of this section.
L.1981, c. 405, § 3B:18-25, eff. May 1, 1982. Amended by L.1988, c.
165, § 1, eff. Nov. 29, 1988; L.1999, c. 159, § 11.
Taking annual amount on accounts of corpus commissions; two or more
fiduciaries (3B:18-25.1)
If there are two or more fiduciaries, the amount of the annual
commissions taken pursuant to N.J.S. 3B:18-25 may equal the commissions
which may be taken pursuant to that section when there is but one fiduciary,
plus one-fifth of the commissions for each fiduciary more than one. No
one fiduciary shall be entitled to any greater commission than that which
would be allowed if there were but one fiduciary involved.
L. 1989, c. 7, § 1, eff. Jan. 27, 1989.
Corpus commissions on termination of trust, guardianship or upon
distribution of assets (3B:18-28)
In addition to the annual commissions on corpus, upon termination
of the trust or guardianship, or upon distribution of assets from the trust or
guardianship, the fiduciary may take a commission on corpus distributed,
including accumulated income which has been invested by the fiduciary.
The value of the corpus for the purpose of computing the commissions
shall be the “presumptive value” or, at the option of the fiduciary, the value
at the time of distribution, as defined in N.J.S. 3B:18-18. The amounts of
the commissions to be taken are as follows:
a.
If the distribution of corpus occurs within 5 years of the
date when the corpus is received by the fiduciary, an amount equal to the
annual commissions on corpus authorized pursuant to N.J.S. 3B:18-25,
but not actually taken by the fiduciary, plus an amount equal to 2% of the
value of the corpus distributed;
b.
If distribution of the corpus occurs between 5 and 10
years of the date when the corpus is received by the fiduciary, an amount
equal to the annual commissions on corpus authorized pursuant to
19
N.J.S. 3B:18-25, but not actually received by the fiduciary, plus an amount
equal to 1 1/2% of the value of the corpus distributed;
c.
If the distribution of corpus occurs more than 10
years after the date the corpus is received by the fiduciary, an amount
equal to the annual commissions on corpus authorized pursuant to
N.J.S. 3B:18-25, but not actually received by the fiduciary, plus an amount
equal to 1% of the value of the corpus distributed; and
d.
If there are two or more fiduciaries, their corpus
commissions shall be the same as for a single fiduciary plus an additional
amount of one-fifth of the commissions for each additional fiduciary.
L.1981, c. 405, § 3B:18-28, eff. May 1, 1982.
20
p. B pg 21
App. B pg 21
App. B pg 21
APPENDIX B
APPENDIX B
APPENDIX B AND TAX
ECONOMIC
ECONOMIC GROWTH
GROWTH AND TAX
ECONOMIC
GROWTH
ANDOF
TAX
RECONCILIATION
ACT
2001
ECONOMIC GROWTH
AND
TAX
RECONCILIATION
ACT
2001
RECONCILIATION
ACT
OFOF
2001
AS
AMENDED
RECONCILIATION
ACT
OF
2001
AS AMENDED
AS AMENDED
YEAR
YEAR
YEAR
YEAR
2002
2002
2003
2003
2002
2004
2004
2005
2005
2003
2006
2006
2007
2004
2007
2008
2008
2005
2009
2009
2010
2010
2006
2002
2003
2004
2005
2006
2007
2008
2009 2007
2010
2008
2009
2011
2011
2010
2012
2012
2013
2013
DEATHTIME
LIFETIME
APPLICABLE
DEATHTIME
LIFETIME
APPLICABLEMAXIMUM
MAXIMUM
DEATHTIME
LIFETIME
APPLICABLE
MAXIMUM
EXEMPTION
GIFT
TAX
CREDIT
AT AT
ESTATEESTATE
MAXIMUM
EXEMPTION
GIFT
TAX
CREDIT
EXEMPTION
GIFT
TAX
CREDIT
AT
ESTATE
DEATHTIME
LIFETIME
AMOUNT
EXEMPTION APPLICABLE
DEATH
AND GIFT
ESTATE
AMOUNT
EXEMPTION
DEATH
AND
GIFT
AMOUNT
EXEMPTION
DEATH
AND GIFT
TAX RATE
EXEMPTION
GIFT
TAX
CREDIT
AT
TAX RATE
AND
GIFT
TAX RATE
AMOUNT
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$1,500,000
$1,500,000
$1,000,000
$1,500,000
$1,500,000
$1,000,000
$1,500,000
$2,000,000
$2,000,000
$1,500,000
$2,000,000
$1,500,000
$2,000,000
$2,000,000
$2,000,000
$2,000,000
$1,500,000
$3,500,000
$3,500,000
$2,000,000
OPTIONAL
OPTIONAL
$2,000,000
$2,000,000
$5,000,000
$5,000,000
$3,500,000
$2,000,000
OPTIONAL
$2,000,000
$5,000,000
$3,500,000
$5,000,000
$5,000,000
REPEALED
$5,000,000
$5,000,000
$5,250,000
$5,250,000
EXEMPTION
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$5,000,000
$1,000,000
$5,000,000
$5,250,000
DEATH
TAX50%
RATE
$ 345,800
$ 345,800
50%
$
345,800
49%
$
345,800
50%
345,800
49%
$ $$345,800
50%
555,800
48%
$ 555,800
48%
$ 345,800
49%
555,800
47%
555,800
47%
$ $$345,800
49%
$
555,800
48%
780,800
46%
$$ 780,800
46%
$
555,800
47%
$
780,800
45%
$ $555,800
48%
780,800
45%
$
780,800
45%
$
780,800
46%
$ 780,800
45%
$ $1,455,800
555,800
47%
$1,455,800
45%
45%
$ 780,800 OPTIONAL 45%
$1,730,800
$ $1,730,800
780,800
46%
$ 780,800 OPTIONAL
45%
$3,000,000
$3,000,000
basis
step-up
$1,455,800
45%
basis45%
step-up
$ 780,800
spouse
$1,730,800 totospouse
OPTIONAL
$1,300,000
$1,300,000
$ 780,800
45% $3,000,000
basisstep-up
step-up
basis
basis step-up
$1,455,800
others
toto45%
others
$1,730,800
35% to spouse
$1,730,800
35%
REPEALED
N/A
$1,730,800
35% $1,300,000
$1,730,800
35%
Gift40%
Tax at
$2,045,800
40%
$2,045,800
basis step-up
$1,000,000
to others
Assetsnot
notprotected
protected from
from tax
tax by
by the applicable credit
will
Assets
credit amount
amount (or
(or otherwise)
otherwise)
willbe
betaxed
taxed
$3,000,000
ratesasasshown
shown$5,000,000
above.
atatrates
above.
2011
$5,000,000
$1,730,800basis step-up 35%
2012
$5,000,000
$5,000,000
$1,730,800 to spouse 35%
Note: The
TheTable
Tableisisbased
basedon
on the
the law
law as
as itit exists in 2011. Some
Note:
Some changes
changes are
areexpected
expectedby
by2013.
2013.
2013
$5,250,000
$5,250,000
$2,045,800 $1,300,000 40%
basis step-up
Assets not protected from tax by the applicable credit amount (or otherwise)
to others will be ta
ates as shown above.
2011
$1,000,000
$1,000,000
$ 345,800
55%
te: The Table is based on the law as it exists in 2011. Some changes are expected by 2013.
Assets not protected from tax by the applicable credit amount (or
otherwise) will be taxed at rates as shown above.
#3371285
#3371285
Note: The Table is based on the law as it existed in early 2010. Some
amendments are expected in 2011.
21
APPENDIX C
DECEDENT’S PERSONAL DATA
Name on Will
Also Known As
Social Security No.
Date of Death
Place of Death
Date and Place of Birth
Employer
Address of Employer
Marital Status
Name of Surviving Spouse
Name of Executor/Executrix
Address
Phone
Beneficiaries (List)
Bank Accounts
Financial
Institution
22
Title on
Account
Account
Number
Balance
Real Estate
Address
Mortgage
Balance
Approximate
Value
Title Holder
Stocks, Bonds, Mutual Funds
Quantity
Name of
Fund
Account No.
Value
Title Holder
Closely Held Corporation, Partnership or Other Business Interests
Business
Name
Address
Telephone
Buy-Sell
Agreement
# Of
Shares or
% Interest
Accounts Receivable, Mortgages & Notes Owed to Decedent
Debtor
Address
Phone
Balance
Owed
23
Insurance on Decedent’s Life
Company
Contract
No.
Owner
Death
Benefit
Amount
Beneficiary
Insurance Other Than Life Insurance
Company
Policy No.
Type of
Insurance
Amount
Miscellaneous Property
Description
Approximate Value
Pension, Profit Sharing Plans, Employee Benefits, IRAs,
Annuities Receivable
Name of Plan
24
Account No.
Total Value
Title Holder
Beneficiary
Burial Expense
Funeral Director
Florist
Headstone
Cemetery
Clergy
Other
$
$
$
$
$
$
Charge Accounts, Loans and Miscellaneous Debts
Company
Account No.
Address
Balance Due
25
NOTES
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NOTES
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WILENTZ, GOLDMAN & SPITZER, P.A.
90 Woodbridge Center Drive
Woodbridge, NJ 07095
(732) 726-7422
Meridian Center I
Two Industrial Way West
Eatontown, NJ 07724
www.wilentz.com
TRUSTS AND ESTATES DEPARTMENT ATTORNEYS
Edwin Leavitt-Gruberger, Department Chair
Richard F. Lert
Robert A. Kautz
Linda Lashbrook
Elizabeth C. Dell
AAGuide
Guideto
to
Probate,
Probate,Tax
Taxand
and
Estate
EstateLitigation
Litigation
9090
Woodbridge
Woodbridge
Center
Center
Drive
Drive
Suite
Suite
900
900
Box
Box
1010
Woodbridge,
Woodbridge,
NJNJ
07095-0958
07095-0958
732-726-7422
732-726-7422
www.wilentz.com
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