New Jersey Inheritance Laws

The New Jersey Courts' Judiciary Annual Report for 2021 to 2022 provided information on the increasing frequency of probate-related matters in the state. The Chancery Division saw a 5% rise in probate complaints, from 6,214 to 6,531, and these primarily involved trust actions and contested estates. Notably, resolutions for these complaints increased by 13% during the same period.

This trend, which can be attributed to various factors, highlights the complexities of probate. One possible contributor is the state's relatively low poverty rate (seventh lowest in the U.S. according to 2021 USDA data). That said, navigating probate can be tricky regardless of financial standing; the process mainly depends on the deceased's estate value and asset composition.

With that in mind, this article delves into New Jersey inheritance laws to empower individuals and families. It explores the contrasting scenarios of having and not having a will, providing clarity on how estates are distributed. Moreover, it addresses critical topics like inheritance and estate taxes, potential will challenges, and family member rights in intestate situations.

What Happens if Someone Dies With a Will in New Jersey?

When someone in New Jersey passes away, their belongings and assets, collectively known as their estate, are ultimately inherited by their legal heirs. Still, how their possessions are allocated depends on the deceased's wishes, primarily expressed through a legal document called a will. 

Creating a Valid Will

New Jersey laws allow individuals aged 18 or older deemed to be of sound mind to create a will. These individuals may also designate a testamentary guardian for their own minor children. The person making the will is known as the testator. To ensure its validity, a will in New Jersey must adhere to these key requirements:

• Written: The will must be a physical document, not a verbal agreement.

• Signed: The testator, or someone acting on their behalf with their explicit consent while they are alert and aware, must sign the will.

• Witnessed: At least two individuals must witness the testator signing the will and then sign it themselves.

These essential elements ensure clarity, authenticity, and adherence to legal protocols, safeguarding the will's validity.

Appointing an Executor or Administrator 

The smooth and efficient distribution of a deceased individual's assets hinges upon the appointment of a capable executor or administrator within their will. In New Jersey, while the law does not dictate specific qualifications for an executor, the testator's choice should be made with utmost care.

An executor will become the legal representative of the estate and will be tasked with the following:

• Gathering and inventorying assets: From bank accounts and real estate to personal belongings, the executor meticulously identifies and catalogs all assets belonging to the estate.

• Paying debts and taxes: The executor is responsible for ensuring that all outstanding financial obligations, including taxes, mortgages, and creditor claims, are settled.

• Distributing assets to beneficiaries: Following the will's instructions, the executor distributes the remaining assets to the designated beneficiaries promptly and accurately.

• Managing legal matters: The executor is responsible for navigating probate court proceedings, resolving disputes that may arise, and handling legal paperwork.

If the will lacks an appointed executor, the probate court designates an administrator. This individual assumes a similar role, overseeing the estate's administration and fulfilling the same core duties as an executor. However, the administrator's authority may be subject to additional court oversight and approval, particularly in asset sales or major financial decisions.

Probate Process

One of the key concerns families face when navigating inheritance is understanding how a loved one's wishes expressed in a will are carried out. This process, known as probate, involves legal procedures for settling the deceased's estate and distributing their assets according to their will or state laws.

In New Jersey, probate matters are handled by either the Surrogate's Court or the Chancery Division of the Superior Court. Uncontested probate cases, where everyone agrees on the will's validity and distribution, typically go through the Surrogate's Court. Conversely, contested cases involving disputes about the will or beneficiary designations are handled by the Superior Court.

While the probate process can begin as early as 10 days after the decedent's death, there is no strict deadline for filing the necessary documents, including the probate petition, death certificate, and the will itself. These documents are submitted to the Surrogate's Court in the county where the decedent resided.

Once initiated, the court will assess the will's validity. If deemed legal, the appointed executor is authorized to administer the estate.

Probate vs. Non-probate Assets

Understanding how assets are distributed after death can be a complex yet crucial aspect of estate planning. Two key concepts to grasp are probate and non-probate assets, as they dictate the path an asset takes when the owner passes away.

Probate Assets

Properties subject to the legal process overseen by a probate court for official validation and distribution include: 

• Bank accounts solely owned by the deceased.

• Real estate, also solely owned by the deceased.

• Personal possessions like vehicles, jewelry, clothing, or furniture, as long as they are not specifically designated to avoid probate through other legal means like trusts or joint ownership.

Non-probate Assets

Certain assets bypass the probate process due to ownership designations or beneficiary arrangements, simplifying the transfer process. These include:

• Assets held in a living trust, where ownership has already been transferred according to the trust's terms.

• Retirement accounts like 401(k)s and IRAs with designated beneficiaries who directly inherit the funds.

• Life insurance policies with designated beneficiaries who receive the payout upon the policyholder's death.

• Payable-on-death accounts, where the named beneficiary automatically inherits the account upon the owner's passing.

Understanding the distinction between probate and non-probate assets allows for more informed estate planning decisions. By strategically designating beneficiaries or utilizing legal tools like living trusts, individuals can streamline the inheritance process for their loved ones. 

Contesting a Will

In certain situations, individuals may raise objections to the validity of a document known as a will. This act of questioning is referred to as a will contest. Contesting a will is a complex undertaking, and it is advisable to understand the process.

Who Can Contest a Will?

Before embarking on a will contest, it is crucial to establish legal standing. This typically falls to beneficiaries, who possess the legal right to challenge the will's validity. These include individuals named within the document itself, as well as those whose inheritance would be impacted by a successful contest.

For instance, a family member who was included in a previous version of the will but was excluded in the final version would retain the right to contest. Their prior inclusion, even if temporary, grants them legal standing to challenge the will's validity.

Grounds for Contesting a Will

While the presumption of a will's validity exists, questioning its authenticity can be difficult. Common grounds for such a challenge include:

• Undue influence: If evidence suggests the testator was pressured by another, such as a close relative, to alter the document's content before completion, it may be considered grounds for contestation.

• Fraud: This encompasses scenarios where the will itself was fraudulently drafted, either by deceiving the testator during the writing process or by forging their signature entirely.

• Formal irregularities: If evidence indicates that legal formalities were not followed during the will's creation, it could be contested. This could involve proving the absence of two witnesses at the signing, the testator's unsound mind at the time, or their being underage (typically below 18) when writing the document. 

How to Contest a Will

In New Jersey, contesting a will requires careful preparation. The first step is to file a caveat with the Surrogate's Court where the will will be probated. This document expresses disagreement with the probate and effectively freezes the estate until the court rules on the matter.

If the probate process has already begun, a different approach is necessary. An Order to Show Cause must be filed with the Chancery Division of the Superior Court, seeking to set the probate aside. A court hearing will follow, where the contestant presents their position and the court decides whether the probate should continue.

Consulting a lawyer is highly recommended, as they can guide the individual through the specific complexities of their situation and determine the best course of action. Remember, the statute of limitations for contesting a will in New Jersey is four months for residents and six months for non-residents.

What Happens if Someone Dies Without a Will in New Jersey?

In New Jersey, when someone dies without a will, a legal framework called intestate succession dictates how their assets will be distributed. Under this system, the decedent's property automatically passes to their surviving heirs, including spouses or partners, children, parents, and other designated relatives. The specific amount each heir inherits is determined by established inheritance laws within the state.

Spousal Rights

In New Jersey, when someone dies without a will (intestate), the inheritance rights of the surviving spouse or domestic/civil union partner are determined by state law. New Jersey uses equitable distribution instead of community property principles. This means only assets acquired during the marriage are divided when one spouse dies.

The specific share the surviving partner inherits depends on the decedent's family circumstances, as outlined in the table below.

Moreover, spouses have the right to claim an elective share of ⅓ of the augmented estate.

Children’s Rights

The intestacy rules in the state also include a section on how much the decedent's children will inherit. As seen in the table above, their share depends on whether the decedent or their spouse had children with another person. 

Furthermore, state rules specify how the decedent's other children will inherit:

• Adopted children inherit intestate and real property rights just like biological children born in wedlock. However, they cannot inherit property through the right of representation from the adoptive parents' collateral relatives.

• Children adopted by another family are not eligible to inherit.

• Stepchildren can inherit through representation if the decedent has no other surviving family.

• Children born out of wedlock can inherit if their paternity is established by the deceased through voluntary acknowledgment or legal processes.

• Children conceived before the decedent's death but born afterward can inherit if they survive at least 120 hours after birth.

• Grandchildren can inherit their parents' share if their parents die before them.

Rights of Other Surviving Relatives

In the absence of a surviving spouse or children, the distribution of the deceased's estate follows a specific order of inheritance:

1. Parents: If both parents are alive at the time of the decedent's death, they inherit the estate equally.

2. Siblings: If both parents are deceased, the estate passes to the decedent's siblings. Half-siblings inherit alongside full siblings, receiving equal shares.

3. Grandparents: If no parents or siblings survive, the estate is divided equally between the maternal and paternal grandparents or their surviving descendants.

4. Other relatives: If there are no surviving parents, siblings, or grandparents, the remaining relatives inherit the estate. These include aunts, uncles, cousins, nephews, and nieces, with the order of inheritance determined by New Jersey's intestate succession laws.

Estates With No Heirs

Without living relatives, the deceased's estate may revert to the state. This legal process ensures the orderly distribution of assets when no clear beneficiary exists. 

Upon establishing the absence of eligible heirs, the state assumes responsibility for managing the estate, potentially utilizing the resources for public benefit or directing them to specific programs designated by law. 

While this may seem impersonal, it prevents legal complications and ensures the deceased's assets are not left in limbo.

Unique Situations in New Jersey Inheritance Law

In New Jersey, inheritance laws dictate who can inherit when someone dies without a will. To be eligible, an heir must outlive the deceased by at least five days (120 hours). Note that foreign relatives are not excluded from inheriting their rightful share.

However, justice prevails in cases of intentional harm. If a beneficiary deliberately causes the decedent's death, they lose all inheritance rights from the estate. It is as if they chose to forfeit their share. This ensures fairness and protects the deceased's legacy.

On a separate note, gifts made by the deceased during their lifetime are treated differently. Only documented gifts, such as those written down and acknowledged, are deducted from the recipient's inheritance share when no will exists.

Does New Jersey Impose Estate and Inheritance Taxes?

Estate and inheritance taxes may come into play upon the death of an individual. Whether or not the assigned executor needs to pay these taxes hinges on the estate's total value and the number of inheritors.

The estate tax, a property tax transferred to inheritors, is no longer imposed by New Jersey for those who pass away after January 1, 2018. Non-resident individuals who died before that date are also exempt. However, federal estate tax still applies to residents whose estates exceed $5.49 million.

Inheritance tax, on the other hand, is based on the beneficiaries and the assets they inherit, not just the estate's value. Unlike the estate tax, it applies to both resident and non-resident estates. The amount is influenced by several factors, such as:

• The type of assets owned by the deceased.

• The relationship and identity of the beneficiaries.

• The value of the deceased's assets at the time of death, including debts.

• The deceased's state of residency.

Legal Resources Related to Inheritance Law in New Jersey

Overall, the intricacies of inheritance law in New Jersey can be overwhelming, especially for those unfamiliar with legal procedures and tax implications. As such, working with a probate attorney is crucial to maximizing benefits and minimizing potential liabilities. The resources below may offer a valuable starting point.

New Jersey Courts

The New Jersey Courts website offers a comprehensive suite of self-help materials for individuals navigating the court system without legal representation. This online platform provides access to essential forms, court office directories, detailed information regarding court rules and procedures, and potential avenues for fee waiver eligibility. Furthermore, the website publishes case reports from state, county, and municipal courts, helping individuals understand past judicial decisions.

New Jersey Department of the Treasury - Division of Taxation

The New Jersey Division of Taxation is the state's central hub for managing its tax system, focusing on estate and inheritance taxes. From processing returns and checks to assisting taxpayers and conducting administrative reviews, its responsibilities encompass a comprehensive range of duties. 

Furthermore, the Division provides relevant documentation on its website, including forms for estate tax returns, inheritance tax resident returns, and affidavits for non-resident estate investments. 

LSNJLAW

The Legal Services of New Jersey’s LSNJLAW is a vital resource for citizens of the Garden State. It covers a range of legal topics, from drafting wills and trusts to navigating long-term care, paternity disputes, and securing government assistance. 

For those navigating the legal system alone, LSNJLAW offers a lifeline of self-help materials, including downloadable forms, community resource directories, and benefit calculators. The website has an application process to connect with the organization's services if direct legal assistance is needed.