The New Jersey Statute on estate administration is Title 3B, “Administration of Estates,” which covers areas such as jurisdiction of courts, wills, trusts, guardianship, conservators (someone that the court appoints to manage the estate of another), fiduciaries (generally, the person managing or administering the trust or estate, implying authority and accountability), and other issues of finance and accounting. An estate is the property of someone who dies or otherwise is rendered incapacitated. The purpose of administration is to collect and protect assets and pay the debts, funeral expenses, and all obligations of the estate, and then distribute what is left to those entitled to it under the will or by law. A fiduciary has great latitude to manage, invest, collect rents from, pay taxes on, sell, lease, or mortgage properties, but the fiduciary must always act in the best interest of the beneficiaries.
When someone dies, his or her real and personal property is distributed according to his or her will or, in the absence of a will or trust or similar device, to heirs and those with rights as creditors or those administering the estate. In New Jersey, the Superior Court has authority to hear controversies on wills, trusts, and estates, and authority over accounts of fiduciaries.
Both an executor and a trustee can feature prominently in administration of an estate. Case law explains that the duties of an executor are considered temporary and involve winding up an estate after the person’s death, generally involving liquidation and termination. In contrast, the duties of a trustee involve management, including investment and dealing impartially with creditors and family members. An executor is held to a standard of acting with the care and skill of a person with ordinary prudence in the same situation at the same time. He is expected to act more cautiously than he would be required to act in the management of his own property. Corporate fiduciaries are expected to exercise advanced skill and facilities and are held to a greater standard than ordinary prudence. A fiduciary must adhere to the directions of the instrument under which he or she was appointed. Although not held responsible for regular depreciation of assets, a trustee may be held liable for loss if he or she does not sell stock or other securities within a reasonable time or if she breaches the trust or her fiduciary duties related thereto. A trustee is not trying to increase an estate, but rather to preserve the principal and provide for regular income. Case law finds that prudence implies a duty to diversify investments. A trustee should exercise due diligence in deciding whether to retain its own stock as a trust investment.
Superior Court hears cases of disputed wills concerning matters such as the competence of the person when making a will or alleged undue influence on the person before he or she died in making the will, considering whether the will benefits one who stood in confidence to the one who died and other “suspicious circumstances.” Duties of responsibility, liability, and other legal standards can all be complicated areas requiring legal expertise to navigate. When issues of estate administration and probate arise, contact the experienced attorneys at McLaughlin & Nardi, LLC, for help, e-mail or call us at (973)890-0004.