If you are confronted with the need to administer the estate of a loved one who has died, you may find it helpful to familiarize yourself with the definitions of some terms you’ll be hearing.
The word “estate” in this context means, generally, the deceased person’s assets and liabilities.
“Estate administration” and “probate of the estate” are terms referring to the process of settling claims, paying debts and taxes, and distributing assets. An estate is administered, or probated, through the Surrogate Judge of the county where the decedent lived. The Surrogate also handles important non-financial issues involving the estate, such as the appointment of guardians for minor children.
An estate’s personal representative is called an executor if named in the will; if there is no will then the estate’s personal representative is called an administrator. (The feminine forms are “executrix” and “administratrix”.) An estate’s personal representative must qualify and be appointed by the County Surrogate, who issues formal letters as evidence of the appointment. Those letters give the personal representative the legal authority to act on behalf of the estate.
“Probate assets” are those which may be distributed in accord with instructions contained in the will, or if there is no will, those distributed to next-of-kin as defined by New Jersey law. By contrast, the ownership of “non-probate assets” will change hands automatically, by operation of law, upon the death of the owner. An asset such as a retirement account may or may not be subject to the probate process, depending on whether an individual beneficiary is named, or whether the estate itself is the named beneficiary.
A Refunding Bond and Release is a document used to finalize the estate administration process. Each heir signs such a document to confirm that: (a) he received his inheritance; (b) he is bound to refund any portion of the inheritance necessary if an estate debt, such as an unpaid tax, is discovered later; and (c) he is forever releasing the estate’s personal representative from any potential liability, because the probate process was completed properly.