Ownership and Title Issues Affecting a Decedents’ Estate: A Primer for Executors and Administrators of an Estate Subject to Probate in New Jersey

By Fredrick P. Niemann, Esq., a New Jersey Estate Administration Attorney

Often, an executor or administrator questions how he or she should transfer real estate to beneficiaries. Does each executor have legal title to the property as a fiduciary pending its transfer to beneficiaries or does ownership automatically pass to the named beneficiaries upon the death of the owner? These are really good questions.

New Jersey laws provide that “Upon the death of a decedent, his or her real and personal property devolves (“devolves” means “passes to” as in legal ownership) to the persons named by his/her will …or in the absence of testamentary disposition (“testamentary disposition” means dying without a will or trust), to his or her heirs…” Please note that I hate big legal words so I’ve given you the plain language translation of the law(s).

So what this means to you as executor or administrator “In the absence of contrary language in the Last Will or Trust… every fiduciary (if you’re an executor or administrator, you’re a fiduciary) shall, in the exercise of good faith and reasonable discretion, have the power… (1) to acquire or dispose of an asset, including real or personal property… at public or private sale…”

What this means to you is that until you complete the estate or you are terminated for some reason as a personal representative, you have the same power over the title to property in the estate that the named heirs at law have subject to the claims of estate creditors and others interested in the estate. You can exercise your power without prior notice, hearing, or order of a court; or the directives of the beneficiary.

So, who must execute the deed in order to legally transfer ownership to beneficiaries?

Is it the executor or administrator or the beneficiaries or heirs? The answer is the administrator, executor or trustee.

But Be Cautious Of Death Taxes & Other Liens

Be sure to pay the New Jersey Transfer Inheritance Tax. The tax is a lien good for 15 years from the date of the death of the decedent. The lien attaches to all taxable transfers. In order to transfer title, you need a tax waiver. This waiver, when received is recorded in the county land records (ie., County clerk’s office).

Then there is the New Jersey Estate Tax — N.J.S.A. 54:38-1 et seq. This tax differs conceptually from the inheritance tax. It is a lien with respect to estates of decedents dying after Dec. 31, 2001 and has a duration of 20 years. This tax applies to estates valued in excess of $675,000 or more. There are only two exemptions from the payment of this tax — non-resident decedents and surviving spouses.

Again, to give title to the heir you need proof of payment and recording the waiver with the County Clerk.

To discuss your NJ 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.