Co-ownership of Real Property Tenancy by the Entirety Joint Tenancy Tenancy in Common

Tenancy by the Entirety Held only by a husband and wife. Husband and wife are regarded as one. Surviving spouse owns the entire estate. Does not require probate. Divorce: tenancy by the entirety no longer exists.

Joint Tenancy 2 or more persons own real property Single estate with multiple ownership. Each tenant owns the entire estate. All joint tenants’ interests in the property are equal. Upon death, ownership does not pass to the heirs or devisees of deceased tenant. Does not require probate.

Tenancy in Common 2 or more persons own real property Each person owns an undivided share. Upon cotenant’s death, share passes to the heirs of the cotenant. No right of survivorship. Probate required.

Insurance Policies Named beneficiaries: primary and contingent Upon death, beneficiary receives the benefit without a need for probate. Insurance company will require: 1) death certificate 1) death certificate 2) completed claim form 2) completed claim form 3) insurance policy 3) insurance policy If beneficiary(ies) is/are dead, policy must go through the estate.

Gifts May avoid probate: Gifts in Causa Mortis ( Gift in Contemplation of Death) May avoid NJ Transfer Inheritance Taxes May avoid Federal Estate Taxes

Trust May be created by an agreement or a Will. Subject matter is given to a third person (trustee) for the benefit of the beneficiary. Beneficiary is not the sole and absolute owner. The ownership is divided into 2 parts: 1) trustee is the legal owner 1) trustee is the legal owner 2) beneficiary is the beneficial owner 2) beneficiary is the beneficial owner

Reasons to Establish a Trust 1) mental/physical incapacitation 2) beneficiary is a minor 3) subject matter 4) save estate and/or income taxes Creator of the trust determines how the trust will be managed. (income & principal) Probate may not be necessary.

Intestate Succession Statutes provide for the distribution of property. Separately owned property: 1) surviving spouse and children (of that union) and their descendants 1) surviving spouse and children (of that union) and their descendants 2) surviving spouse and children (not all of the union) and their descendants 2) surviving spouse and children (not all of the union) and their descendants 3) surviving spouse and no other descendents 3) surviving spouse and no other descendents 4) surviving spouse and mother and father 4) surviving spouse and mother and father 5) no surviving spouse, but lineal descendents 5) no surviving spouse, but lineal descendents

NJ Inheritance Taxes Gifts greater than $500. Subtracted from the gift before it is received. State Tax that ranges from 11-16%

Classes of Beneficiaries Class A: totally exempt from tax father, mother, grandparents, spouse, child or children of the decedent, adopted child or children of the decedent, issue of any child or legally adopted child of the decedent and step-child of the decedent father, mother, grandparents, spouse, child or children of the decedent, adopted child or children of the decedent, issue of any child or legally adopted child of the decedent and step-child of the decedent Class B was eliminated 07/1/63

Class C Beneficiaries Brother or sister of decedent, including half brother and half sister, wife or widow of a son of the decedent, or husband or widower of a daughter of the decedent Brother or sister of decedent, including half brother and half sister, wife or widow of a son of the decedent, or husband or widower of a daughter of the decedent

Class D Beneficiaries All others who are not included in A,C, or E All others who are not included in A,C, or E Stepbrother, or stepsister of the decedent, wife or widow of a stepchild of the decedent, husband or widower of a step-child of the decedent, wife or widow of a mutually acknowledged child of the decedent, and husband or widower of a mutually acknowledged child of the decedent Stepbrother, or stepsister of the decedent, wife or widow of a stepchild of the decedent, husband or widower of a step-child of the decedent, wife or widow of a mutually acknowledged child of the decedent, and husband or widower of a mutually acknowledged child of the decedent

Class E Beneficiaries The State of New Jersey or any political subdivision thereof, any educational institution, church, hospital, orphan asylum, public library etc…..basically “nonprofit” institutions The State of New Jersey or any political subdivision thereof, any educational institution, church, hospital, orphan asylum, public library etc…..basically “nonprofit” institutions

Estate (Transfer ) Tax June 7, 2001, President Bush signed the repeal of the federal estate tax a phased-in repeal of the estate tax

Personal Representatives Executor/ix or Administrator/ix Commissions paid from the corpus of the estate If 2 reps. 2% can be added to corpus commissions. Personal representative must send beneficiaries a copy of the will within 60 days from the date of probate. Claims must be made within 6 months.

Duties of the Personal Representatives Safeguard assets. Inventory assets. Payment of taxes, claims and debts.

Reasonable Funeral Expenses Cost of funeral in relation to the value of the total estate. Allowable items: Disallowed items:

Liability for Payment of Funeral Expenses In common law, an estate is primarily liable for funeral expenses. In common law a husband/father is responsible to provide necessities for a spouse and children. Anyone can volunteer to pay the funeral expenses. Prepaid arrangements are not impacted. Divorce decrees:

Safety Deposit Boxes Automatically sealed upon a person’s death. PR may obtain will, life insurance policies etc. in presence of bank officer. Contents may only be released after they are inventoried in the presence of the PR, bank officer and rep. from NJIT Bureau.

Probate “the process where the estate of a decedent is administered” Not always necessary. It is a crime to conceal a valid Will. Adopted children have equal rights to biological children. Step-children must be written into the Will. Illegitimate children will inherit from their mother.