Executor Duties and Responsibilities

In New Jersey, a personal representative is a person who is appointed by the Surrogate’s Court to administer the estate of a decedent. A personal representative is a fiduciary and as such is required to perform their duties with the utmost honesty and care. In performing their estate administration duties, they must always keep the best interests of the estate in mind and not their personal interests. N.J. Rev. Stat. § 3B:22-4. If the decedent left a will naming an executor, the personal representative is sometimes referred to as the executor and, upon appointment, receives “letters testamentary” authorizing them to act on behalf of the estate. If the decedent did not leave a will, the personal representative is often referred to as the administrator and, upon appointment, receives “letters of administration.”

Duties and Responsibilities of a New Jersey Personal Representative

Upon receiving “letters” the personal representative must move forward expeditiously to perform the many activities required to settle the estate. They have a duty to act in the best interests of the estate and to settle the decedent’s affairs according to the terms of the will, if any, and New Jersey law. N.J. Rev. Stat. § 3B:10-23. To do so, the personal representative must perform the following activities:

Inventorying the estate. The personal representative has the right to take possession of estate assets and to secure and manage them. The personal representative may make an inventory of estate assets or the court may require it. The court may not require an inventory to be filed until 3 months after the appointment of the personal representative. The information that is required to be included in the inventory includes not only the list of the decedent’s property—real and personal, but also the value of the property. The value must be determined by two impartial people. N.J. Rev. Stat. § 3B:22-4

Notifying creditors and paying debt. The personal representative must notify creditors of their appointment. This is the first step in the debt payment process. In New Jersey the claims period is 9 months from the date of the decedent’s death. It’s critical that creditors understand this rule. While a claim filed late may not be barred, there may not be money left in the estate due to asset distribution or satisfaction of other lawful claims. N.J. Rev. Stat. § 3B:16-2

If the estate does not have enough assets to pay all claims in full, the personal representative must pay debts and expenses based on the following order of priority:

Reasonable funeral expenses
Expenses of administration
Debts owed to the Office of the Public Guardian for Elderly Adults
Debts and taxes with preference under federal or New Jersey law
Reasonable medical and hospital expenses of the last illness of the decedent
Judgments entered against the decedent
All other claims

Note that if the estate’s assets exceed the amount needed to pay claims and the personal representative has yet to distribute all estate assets, New Jersey law allows creditors to file claims even if the claims period has ended. N.J. Rev. Stat. § 3B:22-10

Distributing assets. Before distributing assets, the personal representative is required to petition the court for permission to do so. Upon approval, the personal representative must distribute assets according to the terms of the will. If there is no will, assets must be distributed according to New Jersey’s rules of intestate succession. Upon transferring each asset, the personal representative is required to take a Refunding Bond and Release from the beneficiary or heir and to file the bond with the Surrogate’s Court. N.J. Rev. Stat. § 3B:23-24. By signing the Refunding Bond the beneficiary or heir agrees to refund to the executor the beneficiary’s proportionate share of any debt that may arise in the future if there are no estate assets to pay the debt. In addition, the Refunding Bond releases the personal representative from any liability with regard to the distribution to the beneficiary or heir.

Compensation of a New Jersey Personal Representative

For their services, personal representatives are entitled to two types of compensation: a corpus commission and an income commission.

According to N.J. § 3B:18-14, the corpus compensation is based on all corpus received by the personal representative as follows:

5% of the first $200,000
3.5% of the next $800,000
2% of everything above $1,000,000

As for income commissions, the personal representative receives commissions in the amount of 6% on all income received by the fiduciary. N.J. Rev. Stat. § 3B:18-13