When Do You Receive Your Inheritance – The Administration of An Estate

There is no doubt that the loss of a loved one is an emotional time in a person’s life, and there will certainly be a period of grieving after the passing of this individual. At some point, however, the estate of the decedent will have to be administered and distributed pursuant to the decedent’s Will if one exists. For the purposes of this blog, we will assume that the decedent died with a Will. The question that many people have is how long will this process take.

In general, the New Jersey statutes provide some guidance as to when an heir might reasonably expect for an estate to be concluded. N.J.S.A. 3B:17-2 provides that a personal representative shall not be required to account until after the expiration of one year after his appointment unless there is good cause shown to justify an earlier date. The starting point for this period of time is the date when an individual is appointed as executor of the estate.

Once appointed, the executor has many tasks to undertake in administering a decedent’s estate. This blog shall give an abbreviated version of those events, as each step could merit a lengthy discussion. First, the executor must identify and marshal the assets of the decedent. This will determine what assets comprise the decedent’s probate estate and is often referred to as an inventory. Next, the executor needs to determine what liabilities might exist concerning the decedent. Such liabilities may involve unpaid bills to creditors, outstanding tax payments or liabilities, or payments concerning any other accounts to which the decedent might owe money. Once these liabilities are determined, the executor must make arrangements to bring the decedent’s accounts as current as possible.

After the executor has resolved all outstanding liabilities of the decedent, the next item would be the completion of any federal or state taxes returns to determine what, if any taxes, must be paid on behalf of the decedent’s estate. Once this process has been essentially finalized, then the executor would be in a position to prepare an accounting which summarizes all assets and expenses of the estate, and further, the executor would prepare a proposed distribution schedule to the beneficiaries of the estate after all expenses of the estate have been paid. As stated above, this process generally takes around one year for completion, however, it can take longer or shorter depending upon the complexity of the estate.

Once the executor is in a position to make distributions from an estate, the executor will prepare refunding bonds and releases to be signed by any beneficiary of the estate who is to receive money and/or property from the estate. This form is required by law, and simply states that the recipient of the distribution waives all current or future claims against the estate concerning the distribution itself, and moreover, releases the estate from any claims related to the accounting prepared by the executor and presented to the beneficiary prior to the distributions being made. Once signed and presented to the executor, the distribution of the money or property will be made to the beneficiary. It must be noted, however, that should the estate have any shortfall with regard to other expenses, that the refunding bond and release provides that the beneficiary could have to refund all or a portion of the money or property that they received from the estate to address such expenses. This would be a highly unusual circumstance, however, as the executors are careful to make sure that all expenses are paid prior to distributions.

If you are the beneficiary of an estate, it is suggested that you consult with counsel who might assist you with this process. I have seen situations where distributions are made quickly and easily from an estate, but I have also seen estates which are complex and a client benefits greatly by an attorney assisting them through the process. Finally, it is suggested that you consult with an accountant as to any potential tax consequences that you might incur when receiving a distribution from an estate.