Asset Distribution After Death in New Jersey

When a person dies while owning assets in New Jersey, those assets must go through the legal process of distribution and transfer to the decedent’s heirs or beneficiaries. The precise asset distribution depends on whether the decedent had a last will in place.

Here, we explore “Asset Distribution After Death in New Jersey.”

Asset Distribution With a Valid Will

If the decedent left a properly executed will, the will acts as the instruction manual for distributing assets after death. The executor in the will is responsible for initiating probate, positioning the assets, paying debts and taxes, and then distributing all remaining assets according to the will’s directions.

The assets will be distributed to the devisees named in the will, which may include:

• Spouse
• Children
• Other family members
• Friends
• Charities or organizations

The will specifies each beneficiary’s share of the estate. It can distribute specific assets to named individuals (e.g., a house to a child) or make percentages or fractional bequests of the residual estate.

Asset Distribution with No Valid Will (Intestate)

In cases where the decedent didn’t leave a valid will, known as intestate, New Jersey’s intestacy laws determine how assets are distributed. The assets pass to the closest surviving heirs based on their legal relationship to the decedent.

In New Jersey, intestate distribution is governed by N.J.S.A. 3B:5-3 through N.J.S.A. 3B:5-14. Generally, the order of inheritance is:

1. Surviving spouse
2. Descendants (children, grandchildren)
3. Parents
4. Siblings
5. Nieces/nephews and their descendants
6. Grandparents and their descendants
7. Step-children
8. Other next of kin

If married with children, the surviving spouse receives 1/3 of the augmented estate, and the children split the remaining 2/3. If there are no descendants, the spouse inherits the entire augmented estate.

For unmarried individuals with descendants, the descendants receive the entire estate. With no spouse or descendants, parents are first in line. Without a spouse, descendants or parents, siblings equally split the estate.

Only blood or legally adopted relatives are entitled to an intestate share of assets. In-laws, step-relatives and unmarried partners are not considered legal heirs unless specified in a will.

Non-Probate Assets

Some assets are considered “non-probate” because they pass directly to named beneficiaries without going through probate. These include:

• Assets held in a revocable living trust
• Life insurance death benefits
• Retirement accounts like 401(k)s and I.R.A.s
• Assets titled as joint tenants with rights of survivorship
• Bank accounts with payable on death (P.O.D.) designations
• Investment accounts with transfer on death (T.O.D.) registrations

These beneficiary designations take priority over instructions in a will or intestate laws. The assets are transferred from the asset holder (e.g., insurance company) to the named beneficiaries.

Role of Executor/Administrator

Whether there is a will or not, the court legally appoints an executor (with a will) or administrator (without a will) to manage the decedent’s final affairs.

Key duties include:

• Identifying and collecting the decedent’s assets
• Obtaining appraisals and valuations
• Paying valid creditors, taxes and administration expenses
• Maintaining detailed accountings
• Making required legal notifications and publications
• Resolving disputes and liabilities
• Liquidating assets if needed
• Preparing final income and estate tax returns
• Distributing remaining assets to heirs/beneficiaries

Executors and administrators have a fiduciary duty to act in the best interests of the estate and beneficiaries. According to law, all assets and their distributions must be adequately accounted for.

Asset Transfers

After paying the estate’s debts, taxes, and expenses, the remaining assets are transferred and retitled in the names of the beneficiaries or heirs. For real estate, this requires preparing and recording new deeds.

With financial accounts and investments, account ownership is changed to the beneficiary’s name after required documentation, such as letters of testamentary or administration, is supplied.

All transfers should be documented appropriately with receipt and release forms signed by the recipients. Maintaining thorough records is critical.

While the emotional loss can be overwhelming, properly attending to the legal and financial transfer of assets is imperative after someone’s passing; whether following the instructions in a valid will or the state’s intestate succession laws, an executor or administrator plays a vital role in legally distributing the decedent’s assets to the rightful inheritors.

Experienced Probate Guidance in New Jersey

Serving as an executor or estate administrator in New Jersey involves significant legal responsibilities.

Even if you are confident in your abilities, the probate process can be daunting and unforgiving of missteps. Working with an experienced New Jersey probate attorney can ensure you fulfill all duties correctly while avoiding personal liability.

At NJ Executor, our professional probate attorneys provide the comprehensive guidance executors need from start to finish. We can advise you on all facets of administering an estate, allowing you to focus on honoring your loved one’s wishes during this difficult time.

Contact us today to learn more about “Asset Distribution After Death in New Jersey” and to discuss your situation. Learn how we can make this complicated process manageable. With decades of experience assisting executors throughout New Jersey, we’re here to skillfully facilitate the administration and distribution of the estate’s assets. Reach out for a consultation.