Questions the Executor should ask the Estate’s Accountant

The house is sold, the estate’s debts and bills have all been paid, the accounting has been presented to the beneficiaries, they have signed off on the Release & Refunding Bonds, and now it’s time for the estate’s Executor or Administrator to distribute the estate to the beneficiaries according to the Will or according to the requirements of the law. The estate may have acquired dividends or interest or rents on which income tax must be paid. An income tax return has to be filed for the Estate if more than $600 in gross income was received, and in fulfilling his/her fiduciary duty, the Executor/ Administrator wants to be sure to investigate all available income-tax saving opportunities.

Here are a few of the questions to ask when you call the estate’s accountant: :

  1. What is the estate’s expected marginal tax bracket?
  2. Is it beneficial to pass the estate’s income and losses (if there is a loss on sale of assets such as stock or real property) through to the beneficiaries?
  3. Can income or loss be passed through in a year that the property isn’t actually distributed?
  4. If assets have to be distributed out in order to pass thru the tax liability, which plan saves the most taxes — distributing or holding?
  5. Is there any limit on the amount of losses that can be passed through to the beneficiaries?

Serving as Executor or Administrator is a job with many responsibilities. It’s vital that the fiduciary get advice on all of the steps required so that the interests of the beneficiaries are protected, and so that the fiduciary can be protected as well.

Call us for complete advice “A to Z” about the estate administration for decedents’ estates … 732-382-6070

A handwritten Will may work …….. depending

A handwritten Will is called a “holographic Will.” In New Jersey, it is referred to as a writing intended as a Will. The baseline statute for what is a “Will” requires that for something to “be a Will” it must be (1) in writing; (2) signed by the testator or by someone else at the testator’s direction while the testator is consciously present, and (3) signed by at least 2 witnesses who each witnessed the signing of the Will and who each affixed their signatures within a reasonable time of so witnessing. A document that doesn’t meet those exacting standards is a “writing intended as a Will.”

To be accepted, such a writing does not have to be witnessed, but the signature and material portions of the document must be in the testator’s own handwriting. There also must be proof that the writing was specifically intended by the testator to be the final expression of his or her wishes.

A major hazard with self-prepared writings intended as Wills is that a court proceeding is required in order to obtain the necessary court order that authenticates the document. Very often, such documents create arrangements which are unclear or incomplete, and some of the heirs-at-law may oppose it. Notice has to be given to all such people, and if they file opposition, this could turn into a very expensive and time consuming contest.

A recent case in Alaska dealt with the question of whether the placement of the signature up at the beginning of the handwritten document rather than in its customary place at the end could still qualify it as the “signature” that’s required. Estate of Baker, 2016 WL 7488253 (Alaska Dec. 30, 2016). This was a hotly contested case, but eventually the Court decided that the document met all of the statutory criteria and upheld the validity of the document.

The probate process for a properly drawn Will is very easy in New Jersey. However, when it comes to home-made legal documents, not only is a complex  and time-consuming court process required, there are often additional problems, because the writer may not understand the meaning of the language that they use in their writing. Not only are there cases in which the document isn’t signed, there are cases where the document doesn’t  completely dispose of the estate, or doesn’t deal with a contingency (such as a deceased beneficiary or the refusal of a named trustee to serve). Sometimes the document creates ambiguities so that the Executor can’t figure out what is required.

Would you do your own plumbing or electrical wiring? If not, you may not want to prepare your own legal documents either.

Call us for estate planning assistance that reflects your final wishes …