By Justin Liva, Mojo House BuyersIf you've been named executor, or you're the family member who ended up handling things, the house is the piece of the estate that keeps costing money while the paperwork moves. I've helped many people sell inherited properties they didn't want, and the money let them start fresh. This guide covers the part of New Jersey probate that touches the sale.
None of it replaces an estate attorney. Probate has enough exceptions that you want one on your side before you sign anything.
In New Jersey, probate runs through the county Surrogate
Each county has a Surrogate's Court. The Essex County Surrogate describes its work as validating wills and appointing administrators for people who die without one. That gives you the two paths.
When there's a will. The executor brings the original will and a certified copy of the death certificate to the Surrogate, along with the names and addresses of the closest next of kin, as the Union County Surrogate lists them. The Bergen County Surrogate notes that a will can't be admitted to probate until at least 10 days have passed since the death. Once it is, the Surrogate issues Letters Testamentary, the document that confirms the executor's authority to act.
When there's no will. The Surrogate appoints an administrator instead. Bergen's intestacy page lists the order of priority, starting with a surviving spouse or civil union partner, then adult children, parents and siblings. Bergen's checklist has the applicant get renunciations from relatives with an equal or greater right to serve, and Bergen says administrators are required by law to get a surety bond to protect the estate. Union County's administration page says the Surrogate may enter the judgment appointing an administrator once the papers are in order and 120 hours have passed since the death. The administrator then receives Letters of Administration.
Who can sign the deed
Nobody can sign for the estate until the Surrogate has appointed them. After that, New Jersey law gives a fiduciary broad authority. The statute on fiduciary powers, N.J.S. 3B:14-23, as amended in P.L.1997, c.250, lets an executor or administrator sell property at a public or private sale on terms they believe are most advantageous to those interested, unless the will, the appointment or a later court order limits that power.
In plain English, the power to sell comes with the appointment itself unless something limits it. The details depend on the will and the letters, which is one more reason to have the estate's lawyer read them before you list or sign a contract.
Having the power to sell doesn't mean the family will agree on the price. Before an estate house closes, it's wise to make sure everyone inheriting it knows what's happening. If heirs disagree, my guide on selling with multiple owners may help.
Plan for the inheritance tax waiver before closing
New Jersey's inheritance tax is separate from probate. The Division of Taxation's instructions say real property in New Jersey belonging to a resident or nonresident decedent is subject to its waiver requirements. The Division also treats the tax as a lien on the decedent's property, so getting the waiver is part of handing a buyer clean title.
How you get the waiver depends on who inherits:
- Class A heirs (a spouse, children, grandchildren, parents and a few others) of a New Jersey resident may be able to use Form L-9, a request for a real property tax waiver that the Division says may eliminate the need for a formal return. It's filed with the Division, which issues the waiver if the form is in order.
- Anyone else, such as siblings, nieces or nephews, can't use the L-9, and the Division's instructions say a return must be filed whenever any tax is due or a waiver is needed.
The Division's filing rules set eight months from the date of death as the deadline for any return and payment that's due. There's one more form at closing. The Division's guide to buying or selling a home says every seller furnishes a GIT/REP form to record the deed, and an estate completes one form that can carry signatures from more than one executor.
Ask the estate's accountant which forms your situation needs. I'm a buyer, not a tax advisor.
A realistic order of events
Every estate moves at its own pace, but here's the general sequence:
- The death certificate arrives and the family finds the will, or confirms there isn't one.
- The executor or administrator goes to the Surrogate and receives letters.
- The estate's attorney or accountant starts the inheritance tax paperwork.
- The executor decides how to sell and gets the house appraised or priced.
- A contract is signed, the waiver comes in, and the sale closes.
You don't have to wait until step five to learn what the house is worth. Getting an opinion early helps you plan the rest.
What executors should weigh
The statute speaks of terms most advantageous to those interested in the estate, so it's smart to look at more than one option. If the house is in good shape and the estate can wait a few months, listing it with an agent will usually bring the most money. I'll tell you that plainly even though I buy houses.
If the house needs work, is full of decades of belongings, or the executor lives hours away, selling as-is can spare the estate months of carrying costs and a lot of trips. I buy houses in any condition, fire-damaged and unlivable ones among them.
When I make an offer on an estate property, I look at many factors, from the condition and nearby sales to the repair bill and what it costs to hold and resell. I want the deal to work for the beneficiaries and for me. There's no commission. The family can leave behind whatever it doesn't want, since I handle the cleanout after the sale, and if a tenant lives there, I buy with the tenant still in place. Because I close on the seller's timeline, the date can wait until the letters and the waiver are in hand. Who pays closing costs depends on the deal. My guide to seller closing costs shows the usual items, and my page on how I buy houses explains the steps.
If you inherited the house and haven't decided anything yet, start with my guide to an inherited house you don't want.