By Fredrick P. Niemann, Esq. of Hanlon Niemann, a Freehold, NJ Probate Estate Administration Attorney and Law Firm
In our last post about finalizing an estate, I discussed several key obligations that New Jersey estate and probate laws placed upon an executor or administrator. In this post, I’m going to provide some additional points I did not fully address in my earlier editions on final accountings.
Once a Court gives approval of the final accounting, the surety bond can be discharged. This is done in one of two ways. First, the beneficiaries will be presented with a Refunding Bond and Release. If they fail to sign off Refunding Bonds and Releases, an application can be made to the court by the Executor to have the beneficiary’s share paid into the court or if forward thinking insert an Order discharging the bond in the application to approve the final accounting.
What about a beneficiary’s right to demand a final accounting? A beneficiary of an estate can compel an Executor or Administrator to account to him or her after one full year has gone by after the appointment of the Executor or Administrator unless special cause exists to compel an earlier accounting.
What Details Must the Final Accounting Contain?
A formal accounting generally includes information in the following areas: (1) a general statement made as to corpus, income, and available funds; (2) receipts of principal or corpus by the beneficiary; (3) gains and losses on sales or other dispositions of capital assets; (4) disbursements of principal or corpus; (5) distributions of principal or corpus to estate beneficiaries; (6) principal balance on hand; (7) receipts of income; (8) disbursements of income; (9) distribution of income to estate beneficiaries; and (10) reserves held and proposed schedule of distribution going forward.
When an account is filed in court, a representative from the Surrogate’s Office will review the account in detail. Their review is fairly rigorous depending on the county of venue. The Surrogate’s Office charges a fee for their audit of the estate. After the audit is completed, a report is written to the probate judge and the attorney who prepared the accounting addressing any questions or concerns the Surrogate has regarding the account itself. Once approved, notice must be given to all interested parties regarding a hearing date when the Court will decide to approve or not approve the accounting. The Order to Show Cause will contain language which sets forth the date by which exceptions to the account and answers to the Complaint must be filed by any protesting party (“exceptions” means disagreements with the accounting).
To discuss your NJ probate or estate administration matter, please contact Fredrick P. Niemann, Esq. toll-free at (855) 376-5291 or email him at fniemann@hnlawfirm.com/. Please ask us about our video conferencing consultations if you are unable to come to our office.