If you have the responsibility to settle a small NJ estate of a deceased relative or close relationship, the odds are that you haven’t performed this task before. The process can be baffling. While leaning on the professional help from an experienced CPA is an ideal solution, not everyone can afford the cost of this help. In this case, it might be necessary to do it yourself.
This article is intended to list the basic steps for administering a simple estate in New Jersey assuming that there is no real estate involved and no complications with heirs of creditors.
Follow these steps in order:
1) Get death certificates. You may need a few.
2) Get appointed as executor (or executrix, the female form of the word). NJ uses a self-executing forms and a waiver form, if necessary, from the Division of Taxation.
3) Get an Employer Identification Number from the Internal Revenue Service for the estate or a tax waver if you just making a direct transfer to heirs.
4) Open an estate bank account if necessary.
5) Transfer assets from the deceased accounts to the estate account.
6) File to receive the death benefit from Social Security
7) Keep good bookkeeping of estate transactions.
8) Deal with claims of creditors and the concerns of heirs.
9) File an income tax return as ‘usual’ in the year of death.
10) File estate tax returns, if required, after the year of death.
11) Pay yourself for services as executor as allowed.
12) Distribute the remaining assets.
13) Get a closing order to protect yourself, proving that you fulfilled your legal obligations as executor.
Start with this brochure from the NJ “Guide to Being an Executor” from the Division of Taxation: https://www.state.nj.us/treasury/taxation/documents/pdf/guides/General-%20Guide-to-Being-an-Executor.pdf
If real estate or foreign accounts are involved, or any court filings are necessary, then additional steps are required to settle the estate.
The process may vary in other states. We generally focus on providing estate settlement accounting services in Delaware, Pennsylvania and New Jersey.
Additional personal support is available through either the free or paid services here. See https://southjersey.cpa/pricing for more information.