How late can the probate of a Will be challenged?

“In delay there lies no plenty.”

In estate litigation, there’s rarely reason to delay, and often every reason to act quickly. Once probate has been granted, assets can be liquidated, property transferred, and all manner of action can be taken that can’t easily be undone.

It’s one thing to say that it’s generally prudent to act quickly to challenge the probate of a Will. In New Jersey, it’s not merely prudent, it’s required. The statute of limitations for the challenge of probate is one of the shortest in New Jersey law: the action must be commenced within four months after the Will is admitted to probate (or 6 months if the person bringing the action lives out-of-state).

This is an extraordinarily short limitation; typically, the statute of limitations for an action is no shorter than two years. And casual research will not reveal the 4-month limitation; there is no “statute of limitations” for these actions described in the New Jersey statutes.

The limitation is in the R. 4:85-1 of the Rules of Court. It’s well-settled that the four-month limitation described in the Rule operates as a statute of limitations; see, e.g., Marte v. Oliveras, 378 N.J. Super. 261 (App. Div. 2005). The limitation is relaxed to allow an additional 30 days on a showing of good cause under R. 4:85-2, and in certain circumstances can be relaxed further by the court, but if you want to challenge probate as of right, you have four months only to do so.

One of the reasons this rule comes to mind is that I was speaking with fellow estate lawyer last week and she said that, in her experience, many families aren’t ready to move from the emotional loss of a loved one to the business of handling an estate for 7 months. I’m not sure I’ve given enough thought to the question to say, but it’s certainly true that some families take longer than others to think about the business of handling estate matters. Four months is not long, but that’s all the rules afford.

Probate Litigator

New Jersey Ancillary Administration: Part 2 – Ancillary Probate

In the majority of cases that come into my office in NJ, actual ancillary probate is not necessary.  If the decedent died with a Will in an another state owning property in New Jersey, most of the time it’s real property – that is, real estate – and as I discussed earlier there’s no need to go through ancillary probate in such cases.

To my knowledge, there are no reported cases directly concerning ancillary probate;  I assume that this reflects both how relatively uncommon it is and also how relatively straight-forward.   The procedure is of course available and might be desirable in some instances even when only real property is in New Jersey.  (If, for instance, the decedent owned real property in several counties in New Jersey, recording the Will in each county may be more trouble than simply probating the Will in one.)  The governing rule is N.J.S.A. 3B:3-26, which says simply:

When the will of any individual not resident in this State at his death shall have been admitted to probate in any state of the United States or other jurisdiction or country, the surrogate’s court of any county may admit it to probate for any purpose and issue letters thereon, provided the will is valid under the laws of this State.

The application, then, is made to Surrogate;  narrowly speaking, the Superior Court has jurisdiction as well and the application could begin there, but unless the Estate is contested in the jurisdiction of domicile there is no reason I can think of to begin in the Superior Court.  In practice, the personal representative produces an exemplified copy of the Will and proof of the out-of-state probate.  The exemplified copy of the Will must be produced for obvious reasons, and the record of the out-of-state probate must be produced because you can’t have ancillary probate in New Jersey if you don’t have original probate somewhere else.   In most other respects, the procedure essentially follows ordinary probate in New Jersey.

I feel obliged to give my tax warning whenever I’m talking about an out-of-state Estate.  New Jersey’s inheritance tax, if due, must be paid within 8 months of the decedent’s death.  In addition, the personal representative should be aware that New Jersey’s Estimated Gross Income Tax requirements can be onerous.

Probate Litigator

Probating an unsigned Will?

The notion that a signature should always be required for certain important documents and instruments continues to fade in New Jersey law, and it appears that the door may be open to probating a Will never signed by the testator.

There’s no reported case I’m aware of allowing the probate of an unsigned Will, though it’s rumored to have occurred.  The Will would come in under N.J.S.A. 3B:3-3, which is something like a saving provision allowing a Will to be admitted even if it does not meet the requirements for a formal Will (N.J.S.A. 3B:3-1) or a holographic Will (N.J.S.A. 3B:3-2).  This statute allows for the probate of a document not otherwise qualifying as Will if the proponent can show by clear and convincing evidence that the decedent intended the document to be a Will.

This rule has been fairly liberally applied, in the interest of equity, and particularly in uncontested matters it can help avoid manifest waste or the thwarting of the decedent’s wishes.   It remains to be seen whether the rule is so broad that it will allow the probate of a document, prepared by someone other than the decedent, that the decedent never signed.

A recent appellate division decision, IMO Louis Macool, Deceased (416 N.J. Super. 298, App.Div. 2010), seems to suggest that an unsigned Will could in fact be admitted to probate.  The facts in Macool aren’t uncommon by any means, except for the moment of the decedent’s death.  Ms. Macool met with her lawyer to change her Will, and the attorney thereafter prepared a “rough” draft of the Will, following Ms. Macool’s central instructions and modifying a few small items.   Before the draft could be reviewed, Ms. Macool died.

The draft Will in Macool was not admitted to probate.  What’s particularly interesting to me are the reasons the draft was rejected.  First, the decedent had never seen the Will.  In addition, the Will contained some terms that she had never discussed with her attorney, and modified some of the terms she directed. The holding makes no mention of a signature requirement:

“We hold that for a writing to be admitted into probate as a will under N.J.S.A. 3B:3-3, the proponent of the writing intended to constitute such a will must prove, by clear and convincing evidence, that: (1) the decedent actually reviewed the document in question; and (2) thereafter gave his or her final assent to it.”

This has pretty significant implications for the practitioner, I think.  While it’s not our practice to have final estate planning documents reviewed before signing, there are times when circumstances almost require it.  If complex documents need to be reviewed in the evening when witnesses are unavailable, for instance, we may go over the documents, obtain “final assent,” and schedule a short follow-up for the actual signing of the instruments.  I suspect that many lawyers send draft copies of Wills to clients for review before meeting.  If the client sends back a message saying that the Will is just right, it seem likely that it would be accepted for probate.

Probate Litigator

What is the standard for temporary restraints in estate litigation?

At the beginning of estate litigation, it’s not unusual for a party to apply for temporary restraints, usually in the first filing with the court. Temporary restraints are akin to what are more commonly called injunctions, and as the name suggests the relief is temporary pending further review by the court.

The typical case calling for temporary restraints is where a plaintiff is filing an action but wants to keep the other party from causing further harm during the time between the filing of the action and first court date. Without temporary restraints, the opposing party has (at least) the time between the filing of the complaint and court date and may continue whatever conduct it is that caused the suit. Temporary restraints sought in estate litigation generally seek to preserve the status quo, essentially to put everything in amber. These temporary restraints are often continued after the initial court date until the case can be fully heard.

It’s my experience that courts of equity are generally sympathetic to preserving the status quo, which makes good sense to me. While a chancery court is empowered to do equity and is given broad discretion to do so, the actual articulated standard actually sets the bar quite high. If a party, for whatever reason, opposes a request for an order preserving the status quo, the standard can be difficult to meet.

The rule governing temporary restraints in New Jersey – R. 4:52-1 – allows for an application for temporary restraints without notice to the other parties, or with notice. The rule seems to suggest that the standard shifts depending on whether or not the application is without notice to the adverse party: a party is not entitled to “any temporary restraints [ . . . ] unless the defendant has either been given notice of the application or consents thereto or it appears [. . . ] that immediate and irreparable damage will probably result to the plaintiff before notice can be served.” While the standard of irreparable damages is applied by rule only to ex parte proceedings, the case law carries this standard through all applications for temporary restraints.

The leading case articulating the standard relative to temporary restraints is a 1982 New Jersey Supreme Court case called Crowe v. De Gioia. The test actually set forth in Crowe is 3-pronged: a litigant must show that there is a risk of irreparable harm, that the law underlying the complaint is well-settled, and that the litigant is likely to succeed on the merits.  Subsequent cases have read the Crowe test to also require a balancing of the relative weight of the harm posed if the relief is denied against the burden on the adverse party if the relief is granted, and additionally that the relief requested is not adverse to public policy.

Notwithstanding customary practice, applications seeking to preserve the status quo – as opposed to ones seeking more extraordinary relief – are not given a lot of special deference under the Crowe standard. (The only prong of the test where the preservation of the status quo is specifically addressed in Crowe is the likelihood of ultimate success on the merits.)

The greatest difficulty is typically meeting the test for irreparable harm. Any injury that can be addressed by monetary damages is not considered irreparable. In estate litigation, we are often seeking to stop a party from raiding the decedent’s assets. Worse, we often know that a judgment for monetary damages will be an empty victory, where the damages will be difficult or impossible to collect.  Preparing to articulate irreparable damages is a significant part of preparing any application for temporary restraints, and even where the plaintiff seeks “only” to preserve the status quo, counsel should be prepared to answer each prong of the Crowe standard, including irreparable damages.

Probate Litigator

Dying without a Will: the most surprising intestacy law in Pennsylvania and New Jersey

My office is nearly on the border between Pennsylvania and New Jersey, and I recently posted about what I consider the most significant difference between the intestacy rules in the two states. The intestacy law most likely to surprise a client is another matter.

What happens if I die without a Will? When I’m asked that question, there’s one group of people who will almost always call for appointment the following day. Married couples, or domestic partners in New Jersey, with no children and living parents, are very often shocked to discover that the parents will inherit if one of them dies without a Will.

Pennsylvania nearly divides the Estate equally between the surviving spouse and the parent or parents of the decedent. The spouse receives the first $30,000.00 plus one-half of the balance of the Estate, and the rest passes to the parents. If most of the couple’s worth ends up in the Estate of the deceased spouse, the survivor may be left with a considerable financial hardship.

New Jersey is more measured but does not exclude the parents entirely. The surviving spouse or domestic partner receives the first 25% (subject to certain minimum and maximum amounts) and then 75% of the balance of the Estate. So, for instance, if the total Estate assets are $250,000.00, the surviving spouse or domestic partner receives $62,500 as the first 25%, and then $140,625.00 as 75% of the balance. The parents of the decedent receive the remaining $46,875.00

Measured just by the reaction of my clients, neither scheme is what most couples intend. And when the newly motivated couple does come in to have a Will prepared, it’s quite uncommon for them to leave any part of their Estate to their parents.

Probate Litigator

Dying without a Will: the most significant difference between Pennsylvania and New Jersey

In mind of the fact that estate planning is a significant part of my firm’s practice, it’s surprising how often I’m asked: what happens if I die without a Will?

We are a few miles from the Delaware river separating New Jersey and Pennsylvania, and of course the answer to the question depends on which side of the river you happen to live on. I think it’s fair to say that the rules of intestate succession represent each State’s best guess as to what most people would want if they had left a Will. Pennsylvania and New Jersey guess differently, and one area seems especially critical in my practice.

While there really is no “typical” family as far as I can tell, I am thinking about the married couple who have children together and no children by anyone except their spouse. If one spouse dies, and leaves no Will, what happens?

In New Jersey, the surviving spouse (or domestic partner) inherits 100% of the Estate. The children receive nothing. In Pennsylvania, the surviving spouse receives the first $30,000.00 and 50% of the balance of the Estate, and the remainder goes to the children.

In mind of the fact that younger couples are even less likely than older ones to make a Will, this distinction can have a dramatic impact on the lives of the survivors.

Probate Litigator

New Jersey Ancillary Administration: Part 1 – Avoid Ancillary Administration by Recording the Will

When handling a decedent’s Estate, one common and sometimes thorny problem is property owned by decedent in another state. Often, the only option is to conduct what is called ancillary administration in the second state, which generally is the equivalent of a second complete administration in that state.

In New Jersey, ancillary administration can often be avoided through the simpler process of recording the decedent’s Will. An executor or administrator of an out-of-state decedent’s Estate can avoid ancillary probate by recording the Will when:

  • The only property in New Jersey that’s affected is real estate.
  • The decedent left a Will, and the Will has been admitted to probate in another state.
  • The Will probated out-of-state meets the requirements for a valid Will in New Jersey.

Figuring out the best approach in any particular Estate is pretty fact-sensitive; the legislative scheme is a garden of forking paths and there are alternative approaches if any of the items I’ve listed here aren’t satisfied. In broad stroke, though, these are the requirements, and they’re often easily met. Once a Will has been properly filed, the New Jersey real estate can be transferred or sold as easily as if a full administration had been undertaken.

It’s worth noting that, when I’m contacted about handling ancillary administration in New Jersey, more often than not the only Estate property in New Jersey is real estate. (Sidenote: the whole question of ancillary administration for the handling of real property can be avoided in life through estate planning, and it may be advisable to do address the problem presented out-of-state property in the estate planning process.)

The two conditions that must be met — that there’s an out-of-state probate and that the Will would be valid in New Jersey — are rarely a stumbling block. I don’t think I’ve ever encountered an Estate where the decedent managed to completely avoid probate in their home state but left Estate property in New Jersey. The question of what constitutes a valid Will in New Jersey is something I’ll be writing about soon, there’s been some interesting cases recently, but the short answer is that, if a Will is valid anywhere, it’s likely valid in New Jersey.

The mechanics of recording a Will are considerably simpler than a full ancillary administration, and can be handled entirely in the Surrogate’s office without application to the court in most instances.

Last word is a couple of a tax warnings. First, New Jersey will impose an inheritance tax of up to nearly 16% on the value of the property if the proceeds pass to (almost) anyone other than a spouse, parent, or child of the decedent, and that tax must be paid within 8 months of the decedent’s death. In addition, on the sale of the real estate, New Jersey will require the payment of an Estimated Gross Income Tax at closing; the amount is calculated by formula but in any event is no less than 2% of the gross sale price. This probably merits its own discussion another day.

Probate Litigator

Avoiding Administration of Small Estates

Except where a married couple has had careful estate planning, more often than not the death of the first spouse creates an unexpected estate administration problem. It’s very common for nearly all of the couple’s assets to be held jointly and transfer to the surviving spouse, but there is almost always one or two assets that are in the name of the decedent alone. The most common problem asset I encounter is the decedent’s automobile; most people title their vehicles in one name alone, and the surviving spouse may think that he or she must go through a full estate administration to obtain clear title to the decedent’s vehicle, even if no other Estate assets exist.

Prudently, New Jersey has made special provision for small intestate Estates, in N.J.S.A. 3B:10-3 and -4. Under these statutes, when the total value of an intestate Estate will not exceed $20,000.00, the surviving spouse may sign an affidavit and obtain all of the powers of a personal representative. The affidavit, which will be prepared by the Surrogate’s office, simply states the residence of the decedent and the natural of the decedent’s assets.

If there is no surviving spouse, surviving heirs may proceed similarly by affidavit, except that the estate cannot exceed $5,000.00.

Clearly, these rules are inapplicable to higher asset decedents and to couples who have done careful estate planning. But for a surviving spouse left with only a used car in the decedent’s name alone, the rules thoughtfully allow the cost of full Estate administration to be avoided.

Probate Litigator

Undue Influence and Joint Bank Accounts

In my practice, it’s common for me to learn that a decedent held a joint bank account with an adult child or other trusted person in the belief that a joint account would be a convenient way for the fellow account holder to assist in paying bills, depositing checks, and the like. Typically, in an amicable administration, it’s understood that these are “convenience” accounts, and the joint account holder waives off any claim to the account.

It’s not uncommon to find that a decedent divided his or her money into several accounts and made each account joint with a different person. In an amicable administration, this arrangement is viewed as a sort of homespun estate plan, and there is no challenge to the right of each of the surviving account holders to their respective accounts.

Using a joint bank account as a convenience account is unnecessary and inadvisable, and using a joint bank as an on-the-side estate planning tool is a bad idea all the way around, for the reasons described here and otherwise.

The third scenario I encounter involving joint bank accounts is one in which impropriety, typically in the form of undue influence, is suspected. When we discover that, in the months prior to her death, a decedent was brought to her banks by a trusted nephew or a new paramour and that she converted all of her accounts into joint accounts with that person, the inference of impropriety is unavoidable.

It surprises many of my clients to learn that, by statute in New Jersey, money left in a joint bank account “belong[s] to the surviving party or parties as against the estate of the decedent unless there is clear and convincing evidence of a different intention at the time the account is created.” Clear and convincing evidence is a difficult burden to meet if ownership of the account is to be litigated; at this level of analysis, the right of the surviving account holder to the asset seems nearly unassailable.

Under suspect circumstances, however, the right of joint account holder is quite vulnerable if challenged. The first point to recognize is that, in circumstances that give rise to estate litigation on this point, the addition of surviving account holder to the account is almost always a de facto gift. These are not accounts where both owners paid in and both owners used the account to conduct their affairs; these are typically accounts established and funded by the decedent, with the surviving owner later named. The courts are quick to view such transactions for what they are: inter vivos gifts from the decedent to surviving owner.

In the leading New Jersey undue influence case, now more than half a century old, the Supreme Court distinguished between the standard for determining undue influence in the making of a Will as compared to inter vivos gifting. The Court found that “where one is giving away what one can still enjoy, the presumption of undue influence is raised more easily than in cases involving wills.” Subsequent cases have expanded this point, and it is now well-settled how little is required to raise a presumption of undue influence as to inter vivos gifts.

Uniquely, the burden of proof shifts against the surviving account holder if a confidential relationship between the parties can be shown. That is all that is required; if a confidential relationship existed, the surviving account holder must affirmatively that the gift – the making of the joint account – was not the product of deception or undue influence.

What constitutes a “confidential relationship” will require a series all its own, but in short something akin to trust in handling financial or legal affairs will suffice. There is often, in my practice, a power of attorney by the decedent to the surviving holder, and that fact alone establishes a confidential relationship sufficient to transfer the burden of proof.

Probate Litigator

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