By Fredrick P. Niemann, Esq. of Hanlon Niemann, a Freehold New Jersey Estate Administration Attorney
I just read a new case and wanted to share it with you. The issue involved executors commission and whether the commission under NJ law is calculated as a percentage of the gross fair market value , or the net value, after subtracting the outstanding mortgages payable at the time the administrator sold the real estate.
In this case, a bank became the Administrator of the estate and sold the property for $172,500. After paying off the principal mortgage and interest of $132,017.94, the net value of the property was $40,482.06.
The bank filed the Estate’s transfer inheritance tax return, which included an administration expense deduction of $8,625. The bank calculated the deduction by taking 5% of the Estate’s gross value, of $172,500. After examining the return, the Director issued a Notice of Assessment on August 17, 2002, denying the full value of the Estate’s administration expense deduction. The director allowed an administration expense deduction of only $2,004, which was calculated by taking 5% of the net value of the property (i.e., $40,482.06)
The Estate filed a protest with the Transfer Inheritance Tax Branch challenging the Director’s Notice of Assessment. In my next post, I will give you the decision.
Contact me personally today to discuss your New Jersey administration and probate matter. I am easy to talk to, very approachable and can offer you practical, legal ways to handle your concerns. You can reach me toll free at (855) 376-5291 or e-mail me at email@example.com.