Detailed answer — overview

When an estate has money to distribute but beneficiaries or claimants disagree about how to split the funds, the personal representative (executor or administrator) cannot safely distribute assets without court approval or a written agreement from all interested parties. New Jersey law gives the personal representative options to resolve disputes and protect against personal liability: petition the Probate Part of the Superior Court for instructions or an order of distribution, deposit the disputed funds with the court (interpleader or registry deposit), seek a court-approved settlement or mediation, or obtain a release from each claimant.

Key steps to get court approval or otherwise release funds

1. Identify interested parties and claims. Make a list of heirs, beneficiaries named in the will, creditors, and anyone asserting a claim against the estate. Provide accurate contact information and the nature of each claim.
2. Attempt an agreement or partial distribution. If all beneficiaries agree in writing to a proposed split, the personal representative can often make the distribution after documenting the agreement and filing any required notices or accountings with the court.
3. File a petition for instructions or an accounting. If beneficiaries disagree, the executor can file a petition in the Probate Part asking the court to (a) approve a proposed distribution, (b) resolve competing claims, or (c) approve a partial (interim) distribution. The court can issue an order that protects the personal representative from liability if the order directs how funds should be distributed.
4. Use the court registry or interpleader procedure. If multiple parties claim the same money and you can’t safely decide who is right, you can deposit the disputed funds with the court registry or initiate an interpleader action asking the court to determine ownership. Once funds are deposited with the court or the court issues a distribution order, the personal representative is typically relieved of further liability for those specific funds.
5. Request a hearing and provide documentation. Bring the decedent’s will (if any), letters testamentary or letters of administration, inventories, accountings, correspondence with claimants, and any settlement proposals. The court will review the facts and may schedule a hearing.
6. Consider mediation or settlement before a contested hearing. New Jersey courts encourage settlement. Mediation can resolve the dispute faster and at lower cost than litigation. If a mediated settlement is reached, present it to the court for approval to ensure the personal representative’s protection.

How the Probate Court typically decides

The Probate Part evaluates who has a lawful claim under the will or under New Jersey intestacy rules, whether creditors have priority, whether the personal representative followed required notice and accounting procedures, and whether distributing now would prejudice any party. The court can:

• approve a proposed distribution;
• order funds held in the court registry until final resolution;
• require a formal accounting or surcharge hearing if the personal representative’s conduct is questioned; or
• direct repayment to creditors or priority claimants before distribution to heirs.

Filing a petition provides judicial direction and reduces the risk the personal representative faces for making an improper distribution.

Common petitions and motions used in New Jersey estate disputes

• Petition for instructions or directions — asks the court to tell the personal representative how to act when confronted with conflicting claims.
• Petition for preliminary or interim distribution — requests partial release of funds when it is appropriate to make limited distributions (e.g., to pay lump-sum bequests, funeral expenses, or family allowances).
• Petition to deposit funds in the court registry (interpleader) — asks the court to accept disputed funds and determine rightful recipients.
• Petition for settlement of account — seeks court approval of the executor’s accounting and final distribution.

Which petition is appropriate depends on the facts: the size of the estate, the nature of the dispute, whether creditors exist, and whether the personal representative has already paid estate debts.

Practical examples (hypotheticals)

Example 1 — Two beneficiaries claim a bequest: The executor receives two competing letters and each beneficiary insists on the same asset sale proceeds. If they cannot agree, the executor may deposit the disputed proceeds with the court registry or file a petition for instructions. The court will hold a hearing or direct an interpleader to resolve ownership.

Example 2 — Creditor claim vs heir claim: A creditor submits a valid claim for a debt that the heir says should be paid from the funds in dispute. The executor should evaluate and, if appropriate, pay valid creditor claims before distribution. If the creditor’s validity is contested, seek court instructions or deposit funds with the court until the claim is resolved.

Relevant New Jersey authorities and resources

Statutes and court information that commonly govern these procedures are found in the New Jersey statutes and the New Jersey Courts resources for probate. See:

• New Jersey Legislature website (search Title 3B — Estates and Probate): https://www.njleg.state.nj.us/. Title 3B contains laws governing administration of estates (N.J.S.A. Title 3B).
• New Jersey Courts — Probate and estate administration resources and local Probate Part information: https://www.njcourts.gov/. Use the site’s probate/estate pages for local forms and procedural rules.

Because statutes and local practice rules control procedure and vary by county, consult the Probate Part clerk in the county where the estate is being administered or an attorney for the exact filings and forms required.

Helpful hints

• Document everything in writing. Keep copies of notices, claim forms, correspondence, and receipts.
• Give proper notice. New Jersey law requires notice to creditors and certain interested persons; failing to provide notice can create later disputes.
• Get releases when possible. A signed, court-approved release from beneficiaries protects the personal representative from later claims.
• Consider depositing contested funds with the court registry if multiple parties claim the same money.
• Mediation can save time and money. Ask the court about required or available mediation for probate disputes.
• Don’t make distributions you cannot justify. If in doubt, petition the court for instructions to avoid personal liability.
• Keep accounting accurate. The court will review accountings; detailed records speed resolution.
• Talk to a probate attorney early if dispute seems likely or creditors assert significant claims.