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Friday, February 29, 2008

Everything You Ever Wanted to Know About Ancillary Probate in NJ

If you have a loved one who dies owning real property in New Jersey, what do you do? The answer is - an ancillary probate. Generally, this means you will conduct a second probate action in New Jersey after you have done one in the state where the Decedent was domiciled. (If there is no reason to conduct a probate proceeding in the state where the Decedent was domiciled, you can contact the Surrogate on ways to skip steps 1 and 2.)

For most, the process is as follows:

1) If the Decedent had a Will, the named Personal Representative probates the Will in the jurisdiction where the Decedent was domiciled (if there was no Will, someone will likely have to file a complaint to declare an intestacy and request to become Administrator for the estate).

2) The Personal Representative obtains an "Exemplified Copy" of the Will and Letters Testamentary (or Letters of Administration for an intestacy action). Letters Testamentary and Letters of Administration are the documents that the Surrogate gives you to show that you have legal authority to act on behalf of the Estate.

3) You take these documents to the Surrogate of each county where the Decedent owned property and tell them that you want to conduct an ancillary probate. (The fee is nominal, currently only about $5 per page plus $5 for the backing page.)

4) The local NJ Surrogate then gives you Letters Testamentary for NJ, and you can transfer this property legally to the new owner according to the county.

5) BUT WAIT, don't transfer the property yet! You have to know who the property is going to. If all or a part the property (or money from the sale of the property) goes to someone other than a spouse, lineal descendant or lineal ascendant, it is subject to a NJ Inheritance tax! That's right, there is a 11-16% tax on this property which must be paid within 8 months from the date of the Decedent's passing. Failure to do so will result in very large interest and penalty charges which you, as the Personal Representative, may be responsible for. At least there is no NJ Estate tax on the estate of a non-resident.

6) Once the Personal Representative has determined what is owed to the State of New Jersey, he or she should pay the tax, if any, and obtain an inheritance tax waiver from the Estate and Inheritance Bureau. Forms can be found here: http://www.state.nj.us/treasury/taxation/index.html?estatetax.htm~mainFrame

7) Now can the Personal Representative can transfer the property? Probably. Again, if the property was devised to a specific party, it should either be transferred to such party or sold with the explicit consent of that party. If the property was part of the residuary of the estate, then the Personal Representative generally will have the power to transfer the property unless it is denied by the language in the Will - so make sure you check this. Few Wills that I have run into ever limit this, but frequently you do see a right of first refusal which must be honored.

Obviously a knowledgeable probate attorney can help you through these steps.


Anonymous said...

Kevin, my mother passed away in May 2010. She lived with my brother in PA and was a legal resident of the State of PA. She owned a 4 family dwelling in NJ and the will named my brother and two sisters as the beneficiaries. None of us want the home and told him we'd like it sold. Despite being the executor, he's done nothing and stopped speaking to all of us. I'm confused as that what court I need to go to to force the sale of the home being that mom lived in PA but the home is in NJ. Help!

Kevin A. Pollock, J.D., LL.M. said...

I'm sorry to hear about your loss. Unfortunately, I've seen situations like this all too often. When communication fails, you will need to find a good attorney to represent you. I'm not sure if there is enough there to have your brother removed, but you should keep an eye on the house to see what is going on until the matter is resolved. Please call our office if you wish for us to be of assistance - Forums like this really aren't the place.

val said...

hi kevin, i have a situation where my uncle lived in new york and was a general partner in 2 shopping mall properties. one in NJ and the other in PA. do NJ & PA require ancillary probate or can this just be done form NY? thanks so much.

Anonymous said...

If a vacation home in ancillary probate in NJ is trasferred to the deceased's son, how long does he have to hold it before he can sell it and not have to pay the 11-16% estate tax on the sale of the house?

Kevin A. Pollock, J.D., LL.M. said...

Dear Anonymous of 6/18/13,

First, if a person dies as a resident of New Jersey, their assets are subject to a New Jersey estate tax. There is no holding period involved.

Second, the 11-16% tax I think you are talking about is the NJ inheritance tax. That does not apply to lineal descendants.

You probably do not have to worry about any NJ estate or inheritance taxes if the decedent was not a NJ domiciliary, but you will need to file a bunch of paperwork to get a tax clearance. Feel free to call me if you would like to confirm.

Unknown said...

Florida attorney here. Getting some conflicting information from NJ. If I do a summary administration for a domicillary estate here in FL, where no PR will be appointed, can a NJ attorney do an ancillary administration for shore property appointing a PR in the NJ probate? Thank you for the information in your blog. It was quite helpful.

Kevin A. Pollock, J.D., LL.M. said...

Dear Pam,

The NJ surrogate will most likely request a complete copy of the Florida proceedings. From there, they can appoint a PR here in New Jersey.

Anonymous said...

my mother lived in Israel for the last 13 years of her life and passed away here. myself and my sister both live in Israel as well and we are the only children. we have obtained an inheritance order from the Israeli court. Most financial institutions in the U.S. accepted these documents except one for a larger account in N.Y. . They want us to obtain Letters of Testamentary or letters of Administration from NYS surrogate court. Is there any way to get our israeli documents acknowledged by the embassy in order to give us a letter of administration or is there any other way to make this process smooth, quick and easy?

Kevin A. Pollock, J.D., LL.M. said...

Dear Anonymous of 4/6,

I presume that when you say your mom passed away "here" you mean in Israel. You should contact the surrogate's court in the County where the bank account is to find out precisely what they need to do an ancillary probate. Most likely they will need a certified copy of all documents filed in the Israeli probate. However, I'll be honest, I have not had to deal with filing an ancillary probate in NY from a foreign country. New Jersey is much easier.

Anonymous said...

I have seen in several places, including in this blog, that the probate process in Florida is complicated and a nightmare. Can you explain what makes it a nightmare? How long does it usually take to get letters of testamentary there, and what does it cost?

Kevin A. Pollock, J.D., LL.M. said...

Dear Anonymous of 9/21,

Part of the issue is that except for very small estates, you almost always have to hire an attorney to get through process. Most attorneys will charge a flat 3% fee, potentially making it fairly expensive for some. Unless the executor is an immediate family member or lives in Florida, many people won't qualify as executor.

Unknown said...

My father passed in Florida (primary residence) and owned a condo in NJ. He left a will naming myself, sister, 2 1/2 brothers (all bloodline) and 2 stepchildren. does the nJ tax have to be paid?

Kevin A. Pollock, J.D., LL.M. said...

Dear Gypsy,

If everything is going to children or step-children, there should not be a New Jersey inheritance tax. However, tax clearance waivers will still be required.