Estate and Trust Administration
What do you do after a loved one has passed away?
After a loved one’s death, the surviving family members may feel vulnerable and unsure of what to do next. There are many emotional and legal decisions that must be made. During this difficult time, it is extremely important that you work with professionals who understand all of the challenging issues you may be facing.
At Fendrick & Morgan, LLC, we are often called upon to assist surviving spouses, and other family members, navigate their way through the complexities of the administration of a decedent’s “estate,” and the administration of certain “trusts” that may be created as a result of the loved one’s passing. We are thoughtful planners who can provide advice and counsel on all aspects of estate administration in New Jersey and Pennsylvania.
First, let us demystify what it means to administer an estate. The first issue that must be addressed in every administration is: Did the decedent leave a Last Will and Testament and, if so, is that document appropriate for probate? We can review the document (where one exists) and advise you regarding the validity of the document and your ability to have it probated by the Surrogate. Occasionally, issues arise regarding the Will, or the writing being offered for probate as a will. Care must be taken to resolve those issues. We can assist in that regard. For example, if the document which the decedent intended to serve as his or her Will fails to meet the statutory requirements of a “self-proving will” by having the decedent’s signature, two witnesses and a notary public, Court approval might be required in order to have the Will admitted to probate by the Surrogate.
Where the decedent died without a Will, we can discuss the various issues concerning an intestate administration; namely, who can be appointed to handle the administration and how are the assets to be distributed? We can walk you through those considerations. Where the decedent left a Will, the Will should designate an Executor. Where the decedent died without a Will, a statute will set forth a hierarchy of persons who are authorized to be appointed as Administrator to handle all aspects of the administration. The Executor or Administrator, as the case may be, is the person(s) authorized to handle the affairs. Generally, having such person appointed as Executor or Administrator is not a difficult task. A person is appointed to serve as Executor by going to the office of the Surrogate in the county where the Decedent was a resident at the time of his or her passing and present the original Will and an original death certificate. There is also a fee for the probate process. Where the decedent died without a Will, the appropriate person (as designated by statute) can go to the Surrogate’s office with an original death certificate, a check for the probate fee, and any renunciations of other family members who may be entitled to serve as Administrator, but who have elected not to do so. Probate is necessarily the first step in any estate administration, and we are experienced probate attorneys who know how to best help our clients deal with the process.
After being formally appointed, the Executor is charged with managing the assets of the estate, filing any tax returns and ultimately making distributions, as per the terms of the Will, to the beneficiaries. To assist in that regard, our office can have the Executor/Administrator sign financial release letters, so that our office can assist in collecting the necessary financial information. This can be a tremendous relief for many fiduciaries. We will undertake to gather asset information and value the assets as of the date of the decedent’s passing. Our office can assign a Taxpayer Identification Number to the estate so that a checking and/or brokerage account can be opened. Our office can also counsel the fiduciary regarding satisfaction of the decedent’s debts, and in the appropriate order. Occasionally, an estate may not have sufficient funds to satisfy all of the decedent’s debts. In that case, it may be necessary to proceed with the estate as an insolvent estate and, ultimately, have the fiduciary discharged of his or her duties by the court. The Executor is also responsible for ascertaining what tax returns (income tax, estate tax and/or inheritance tax) must be filed on behalf of the decedent and his or her Estate, and for preparing and filing such tax returns.
Ultimately, the Executor is charged with distributing the assets to the various beneficiaries. In order to properly conclude an Estate and be released for his or her role as Executor, an accounting must be given to all beneficiaries, and each beneficiary must sign a Release and Refunding Bond, which is then filed with the Surrogate. By signing the Release and Refunding Bond, the beneficiaries acknowledge receipt of their distributive share in the assets of the decedent, discharge the Executor from further obligation, and accept a pro rata responsibility for any proper debts imposed upon the Estate subsequent to receiving distribution. At this time, our office would undertake to conduct the necessary judgment searches to determine that no beneficiary has any outstanding child support judgments against them. This step is required by law before a distribution can be made to a beneficiary.
The term “Estate Administration” covers all of the financial, tax and related issues that arise and must be managed after a person’s death. It involves not only the probate of the decedent’s Last Will and Testament, but also an inventory of assets, assessment of liabilities, management of accounts, transfers of securities, liquidation or transfer of real estate, consolidation of assets, establishment of trust and preparation of state and federal tax returns to address income, estate and inheritance tax reporting requirements. Similarly, the term “Trust Administration” describes all of the financial, tax and related issues that arise in connection with a Trust.
We represent an Executor or Trustee in the administration of an Estate or Trust, and we provide an array of services in these areas, as described above. In the administration context after a loved one has passed, we can assist in the initial Probate proceedings and fully service the estate through the preparation and filing of death tax returns and ultimately through the process of a final accounting and ultimate distribution. Likewise, in Trust administration matters, we can handle all funding, tax and termination issues. We routinely handle complex issues in these arenas, while making the process simple for the family. Our administration team is growing, now with four attorneys and one Certified Public Account available to assist you through this process. Our approach is to work as a team, so that we can all be available and able to assist.
We understand that, as Executor or Trustee, you may lack the time necessary to attend to the details of administering the Estate or Trust. We know that you need expert accounting and tax advice, quick closure of the administration, and to work with individuals who are sympathetic to the emotional issues you are facing. We further realize how important it is to help you avoid disputes among beneficiaries, and for the administration process to be as easy and straightforward as possible for all involved.
If you have been named Executor or Trustee of an estate, you need to be advised of the many steps you must take to fulfill your duties and not incur any personal liability. We are here to listen to your concerns and offer advice. We can counsel you on tax related and distribution decisions that can help maximize the assets available for distribution to the beneficiaries and avoid family disagreement. As a firm, we strive to service our clients in the best way possible. A testament to that service is the fact that a majority of our new clients are referred by existing clients.
Our Goals of Estate Administration
- Guide surviving family member(s), Executor and/or Trustee through the many issues which must be addressed after the death of a loved one.
- Advise surviving family member(s), Executor or Trustee regarding the federal, state and local tax requirements.
- Advise Executor through the probate process, assist with asset distribution.
- Ensure all estate, inheritance and fiduciary tax returns and IRS documents are prepared and filed.
- Minimize taxes through post-mortem tax planning.
What Can We Do To Help?
- Ensure that all probate requirements are satisfied, including qualification of personal representative, notice of probate to beneficiaries and notice to creditors.
- Obtain tax identification number for the estate and trust, as applicable, and prepare appropriate IRS Forms to establish Fiduciary relationship.
- Establish value of estate assets by gathering and reviewing required information pertaining to the decedent’s financial affairs and then assembling supporting documentation.
- Analyze post-mortem planning options, including disclaimers (and the preparation of the same), reaffirmation of documents for disabled beneficiaries, and tax planning.
- Prepare tax returns, including Federal Estate tax, Federal gift tax, State inheritance tax, State estate tax, Fiduciary and State income tax returns and final Federal and State returns for decedent.
- Transfer of assets and accounts, annuities, business entities, securities, retirement assets and life insurance policies into the appropriate names.
- Preparation of deeds and representation in settlements transferring property.
- Preparation of Release and Refunding Bonds for approval of beneficiaries and release of Executor or Trustee.
- Preparation of Executor’s final accounting, as necessary, in accordance with the New Jersey Principal and Income Accounting Act.