New Jersey Estate Issues

[bicker]

You'd think, having asked questions on a dedicated Estate forum on a Legal discussions bulletin board, and asking the lawyer we retained to help us in administering my deceased mother's estate, I wouldn't have to come to the DISboards for advice. However, the lawyer turns out to be a totally waste of money, refusing to give me straight answers to straight questions (I'll be filing a complaint once I'm really done with the guy), and the estate forum being equally useless, with responses basically being of the order, "Pay for a lawyer, you cheapskate!"

So here I am, asking these questions here.

What must I, as executor of the state, do to preclude creditors coming at the estate with bills two or three years from now? To protect the beneficiaries, I need to know where, in New Jersey State Law, it says that I have to do what you believe I have to do, and most importantly, where it says that doing that is sufficient to protect the estate from late creditors.

I was all set to send letters to all the doctors who she's used over the last three months of her life (because I don't know who else could be creditors of her's) but when I asked if I should my lawyer didn't say yes. Note that he didn't say no either. He said someone else should have done something else. (Grrrr.... WTH is wrong with a person who cannot answer a straight-forward question with a straight answer? Anyway...)

Thanks for the assistance!

 

[LoraJ]

Did you hire a lawyer in NJ or in MA?

I really don't have answers for you. We're in the same situation. When DH's dad died 2 years ago, he left nothing but a tax refund and a rental security deposit. No other assets, lots of credit card debt. We went to the probate judge and he did some paper work stating DH was in charge of the estate and we haven't been able to go back. We finally decided we should just hire a lawyer and let him deal with this since we're clueless.

At first we were bombarded with collection notices. Especially medical bills. Most of those went away because he had emergency medicaid. Some doctors wouldn't accept it so I told them they were SOL. Same with the credit card companies. Once we get this sorted out, I think whatever little money he had will go to back to medicaid.

Now I am having second thoughts about the lawyer since it doesn't seem to be making things easier for you.

 

[Loverly]

What must I, as executor of the state, do to preclude creditors coming at the estate with bills two or three years from now? !

Why would any creditor wait a few years to bill your deceased Mother?

Also, I doubt any old person has any secret bills lying around. Mostly credit card bills and such-right?

 

[LoraJ]

Why would any creditor wait a few years to bill your deceased Mother?

Even though I have told every creditor that FIL is deceased with no estate, I do continue to get 1 or 2 bills from them trying again.

 

[tinkntraining]

I'm going to start off by saying although I am an estate administration paralegal in PA, I have no idea of the estate laws and statutes in NJ. That said, perhaps I can offer some direction for you that no-one else was able (or willing) to do.

In PA, the law states that an administrator/executor must advertise the decedent's death in the county newspaper (and in some counties, also in a legal journal) of the decedent's last residence. This process gives all creditors one year from the date of first advertisement to make a claim against an estate. It is the administrator's job to protect the assets until after the one-year date of advertisement. After that, the executor presents an accounting of the estate to all beneficiaries and if they are in agreement, the inheritance is disbursed according to the Will and any creditors that did not file a claim, are SOL. I will also add that in some cases (when the beneficiaries are not in agreement, and/or when the estate is insolvent (not enough assets to pay all debts), the accounting must be approved by the Court prior to distribution as well.

It is the executor's job, to pay all debts known to them, if there are sufficient assets. The key word is "known" to them. If you acknowledge a claim, it's legitimate. In cases of insolvency, PA statute clearly orders the priority of payment (administrative costs first, later down the line, funeral, medical bills within the last 6 months of decedent's death, etc....) The last class of creditors to be paid are general creditors (credit cards, medical bills older than 6 months, etc).

Again, although I realize I am quoting PA estate statute, it may help you to at least know the direction to go in your search for answers. I would urge you to see if NJ has the same advertising statutes. Other than that, I would encourage you to fire your current estate attorney and find another who is willing to answer your questions. After all, he works for you. Good luck.

 

[Loverly]

That is not what he is saying
He has settled the estate (which NORMALLY takes 6 months or so). In that time frame every bill should have come in.

He is saying some creditor waiting a couple of years to turn in a bill

edited-this was reply to loriJ

 

[bicker]

Did you hire a lawyer in NJ or in MA?

NJ.

Now I am having second thoughts about the lawyer since it doesn't seem to be making things easier for you.

Indeed. Though I don't know if it is all lawyers who would be so useless, or just mine.

I feel lucky that my mother actually had no debts, that I know about, at least. I'd like to keep it that way, though.

 

[bicker]

I'm going to start off by saying although I am an estate administration paralegal in PA, I have no idea of the estate laws and statutes in NJ. That said, perhaps I can offer some direction for you that no-one else was able (or willing) to do.

Thank you.

In PA, the law states that an administrator/executor must advertise the decedent's death in the county newspaper (and in some counties, also in a legal journal) of the decedent's last residence.

The funeral home charged us $200 to put an obituary in the local newspaper. Is that sufficient, generally?

It is the executor's job, to pay all debts known to them, if there are sufficient assets. The key word is "known" to them. If you acknowledge a claim, it's legitimate.

And that's one reason why I didn't send that letter I had prepared to all the creditors... I'm thinking that by doing so I could be opening a door for them.

Again, although I realize I am quoting PA estate statute, it may help you to at least know the direction to go in your search for answers. I would urge you to see if NJ has the same advertising statutes.

The lawyer claimed that the surrogate was supposed to do something. I'm calling the surrogate again today (she hasn't been in all week, so far) to see if she knows what the lawyer is talking about. I'm pretty sure the answer is 'no'.

Other than that, I would encourage you to fire your current estate attorney and find another who is willing to answer your questions. After all, he works for you. Good luck.

What does it mean to "fire" someone who already has a retainer? I cannot get the money back, can I, without hiring a lawyer to do that!

 

[Darcy03231]

Most states have a time frame, usually 6 months to a year after the date of the appointment of an Executor for creditors to file claims. If they don't file within the time allowed by state law then they can't collect on their claim. If you call the probate court where the estate has been probated they should be able to tell you the amount of time a creditor has to file a claim.

 

[Darcy03231]

I forgot to mention that some courts have a small pamphlet that will describe procedure to you. Some are free and some charge a small fee. You might want to check to see if your court publishes one.

 

[luvmarypoppins]

Both dh and my parents died in NJ and we live in NY. I think our lawyer said you have to publish some kind of ad stating something. He wanted to put it in a law journal.

I know once the estate is settled you get something like a form called K1.

I know the surrogate issues you the forms that you need to take to banks, liquidate stocks etc.

I am sure you have a seperate estate checking account to pay all outstanding bills etc.

Best of luck. It does get frustrating and overwhelming at times. Sorry about your loss too.

 

[bicker]

I have the booklet (7 pages!) from the probate court... it doesn't discuss the issue.

 

[DancingBear]

Not my area of expertise, but I think you've got a lousy lawyer.

 

[Darcy03231]

I have the booklet (7 pages!) from the probate court... it doesn't discuss the issue.

I'd just call the probate court and ask then. Its a procedural question so they should be able to answer it.

 

[Oreo Cookie]

I believe you need to run a death notice in the public notice section of the newspaper. This shows a good faith effort to contact all who may have a claim against your DM's estate that you were not able to notify. The notice will have a date they need to contact you by in order to file a debt claim against the estate.

 

[tinkntraining]

1. No, an obituary is just that, a notice of death. An estate notice states that an estate has been opened, names the decedent, the executor, and gives notice to creditors. It includes mailing addresses for both the executor and the attorney (if applicable).

2. You are probably right that sending letters to creditors is "opening the door". However, just receiving a bill showing a balance due is already considered sufficient notice. My first job in an estate is to send a letter to all known creditors, asking for balances due at the date of death. Chances are, if there is a current balance due, the decedent will receive a monthly invoice as always (the creditors don't know the person is deceased). However, I have had estates where say, an ambulance company failed to send out a monthly bill, yet a balance was owed. And, I've had cases where a decedent owed a debt (proven by written agreements) to a private person, but never received a monthly bill. Both of those are still the financial liabilities of the estate, if notice is received (either by receiving a bill, or by the creditor actually filing a claim against the estate in the appropriate court of law).

3. I'm not familiar with the term "surrogate" as it applies to estates. Is that another person, perhaps employed by the state, to help you with questions? If there are no advertising statutes in NJ, I'm not sure how creditors are notified, or how the clock starts ticking.....

4. We don't require retainers in our office. We work on a percentage basis, and don't usually bill the estate until it is completed. However, I would think that if your attorney is not assisting you, then you'd have a case for malpractice, or at least a case to refer to the state's disciplinary board. Perhaps, if you talk with your attorney, and explain why he has been no help to you, and mention that you'd just like your retainer back (or at least your retainer fee minus applicable hours he's worked on the case), perhaps he would comply. I would encourage you to review your Fee Letter, which you signed upon retaining him, that hopefully will clearly spell out what happens if either party is unhappy with the respresentation. You may lose some money, but if the estate is not administered correctly, the executor(you), not your attorney, is the one who will be held financially and sometimes, criminally, responsible. And by all means, ask for a copy of the estate file.

I'm sorry you've gotten a "dud" for an attorney. I assure you, most estate attorneys are well-versed in the law, know the statutes in and out, and will help you navigate these uncharted waters. There are so many deadlines, notification requirements and legal procedures that have to be followed, unless you've had legal training, it's a quite difficult undertaking.

Don't want to add to your worries, but does NJ have an inheritance tax law? If so, then an Inheritance Tax return would need to be filed within a certain time frame, listing all assets and debts, and taxes paid (if applicable).

Feel free to PM me if I can help further.

 

[bicker]

However, just receiving a bill showing a balance due is already considered sufficient notice.

To be clear, I have received a total of one outstanding bill, and that one had credits pending, and subsequently I received a refund check from that "creditor".

My first job in an estate is to send a letter to all known creditors, asking for balances due at the date of death.

But what constitutes a creditor? And how does this jive with your agreement earlier that sending the letters I mentioned would have opened doors that are better left shut.

Chances are, if there is a current balance due, the decedent will receive a monthly invoice as always

To be clear, it has now been four months since the mail forwarding was set up.

3. I'm not familiar with the term "surrogate" as it applies to estates. Is that another person, perhaps employed by the state, to help you with questions?

Some states call this person the probate clerk or probate administrator. She's the person who actually signed and sealed my appointment as executor.

Don't want to add to your worries, but does NJ have an inheritance tax law? If so, then an Inheritance Tax return would need to be filed within a certain time frame, listing all assets and debts, and taxes paid (if applicable).

Eight months. I downloaded the form today. We're way under the limit so there won't be any tax, but I do have to file the form by April.

Feel free to PM me if I can help further.

Thanks!

 

[tinkntraining]

But what constitutes a creditor? And how does this jive with your agreement earlier that sending the letters I mentioned would have opened doors that are better left shut.


Some states call this person the probate clerk or probate administrator. She's the person who actually signed and sealed my appointment as executor.


Thanks!

A creditor is simply, anyone the decedent owed money to. If it's been four months, I'd say there's a good chance you already have a pretty clear picture of the decedent's debts. But, that's not to say there some slacker out there, that doesn't bill on a regular basis. Did the decedent have a financial POA during his/her lifetime? Although I agree with you that it would "open the door", by law, you are required to do so as an executor. As a paralegal, I'm required to follow the law, and keep the executor out of trouble. I wouldn't want to give you any advice that would be either illegal or unethical. So, while I feel your pain, notification is a necessary evil.

Thanks for the explanation of the surrogate. Here, they're called Register of Wills. And that individual is your best bet for answers! He/she knows the probate law and will be your best source of information and direction. Keep calling. Better yet, if you're able, go to talk with the surrogate face-to-face.

Glad to help!

 

[DancingBear]

deleted

 

[legalsea]

Let us see if I can shed some small light on this question, in general terms.

As ‘estate’ does not remain open forever and ever. At some point the judge will declare the estate ‘closed’. “Closed” means just that: all known debts and legacies have been paid.

The reason that a ‘notice’ is published is to give ‘notice’ that Chancey the Clown, or whoever, is dead, and that said clown’s estate is in the process of being settled, and that any and all people believing that they have a claim against the clown’s estate must submit their claims forthwith. There are time frames. I do not know what New Jersey’s time frame is. However, it must be before the judge closes the estate.

Once an estate is ‘closed’ then any subsequent creditors are ‘out of luck’. They do not get paid.

Now, there are circumstances in which a creditor may come in after the estate is closed and make a case that he or she was improperly excluded: usually because the notice was not published or was improperly published, or they believe that some type of fraud was committed.

Now, the above is VERY general.

Here in Texas you have several types of probate procedures, depending on the size of the estate, etc. For instance, my brother-in-law died last November. My sister was named executor of the estate in his will. My sister knows that her husband had few outstanding debts (car, mortgage, couple of credit cards; all community debts hence my sister will continue payments). As such, we are filing a simple probate procedure that will allow the estate to be closed quickly (probably within a month of filing the Will). No notice is required or will be made. It does run a slight risk, of course, because if there was some unknown creditor out there who has a valid claim, said creditor will be able to come along after the estate is closed and demand payment (but not forever; the statute of limitations for collecting on a debt still applies).

New Jersey? I have no idea. I suspect that New Jersey also has several different types of probate procedures, just like Texas and most other states.

I will say this: if my sister, who assured me that her husband had no unknown debts and so we could use the ‘quick and easy (and inexpensive)’ probate procedure, suddenly began asking me questions like “How can I make sure that the estate is not liable for any debts should a creditor pop up in the next couple years”, I would not know how to answer. I would say “Do you suspect that there is some creditor out there? If so, then we should take another route and do the publication of notices, etc”.

If my sister replied: “I am sure there are no other creditors. However, how can we make sure to guard the estate against any creditors that may appear in two or three years?” I would then throw up my hands and say “OK, we must go the more expensive probate route and publish notices, etc”.

No doubt my sister would then get mad at me.

Hope this helps some.