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Detailed Answer
When someone dies in New Jersey, the estate must pay debts and fees before distributing inheritances. The personal representative follows N.J.S.A. 3B:22-1 et seq. to inventory, value, and clear claims. Here are key steps:
- Inventory and Valuation
Under N.J.S.A. 3B:22-1 the representative lists all assets. This includes real estate, bank accounts, retirement plans, investments, vehicles, and personal property. Use professional appraisals for real estate and valuables. - Notify Creditors
Publish notice in a local newspaper to alert creditors, as required by N.J.S.A. 3B:22-17. Creditors then file claims within the statute of limitations. - Validate and Pay Debts
Review claims for validity. Pay funeral costs, medical bills, taxes, and outstanding debts in priority order under N.J.S.A. 3B:22-17 and N.J.S.A. 3B:25-1. Disallowed or late claims can be rejected. - Pay Administrative Expenses
The estate pays court costs, attorney fees, appraisal fees, and fiduciary commissions. Commissions follow N.J.S.A. 3B:21-13. Attorney fees require court approval per N.J.S.A. 3B:22-13. - Calculate Net Estate
Subtract the total of debts and fees from the gross value of assets. For example, if gross assets equal $500,000, outstanding debts total $50,000, and fees are $15,000, the net estate is $435,000. - Distribute the Residue
After clearing all obligations, distribute the remaining assets to beneficiaries under the will or New Jersey intestacy rules in N.J.S.A. 3B:5-1 et seq.
For full statute text, see N.J.S.A. 3B:22-1 et seq. at https://www.njleg.state.nj.us/statutes/title_3B/chap22.html
Helpful Hints
- Keep detailed records of every transaction and communication.
- Obtain professional appraisals for high-value assets.
- File creditor notices promptly to limit unknown claims.
- Set aside funds for potential tax liabilities before distribution.
- Consult a probate attorney to avoid procedural errors and delays.