Kenneth Vercammen is a Middlesex County Trial Attorney who has published 130 articles in national and New Jersey publications on Criminal Law, Probate, Estate and litigation topics.

He was awarded the NJ State State Bar Municipal Court Practitioner of the Year.

He lectures and handles criminal cases, Municipal Court, DWI, traffic and other litigation matters.

To schedule a confidential consultation, call us or New clients email us evenings and weekends via contact box www.njlaws.com.

Kenneth Vercammen & Associates, P.C,

2053 Woodbridge Avenue,

Edison, NJ 08817,

(732) 572-0500

Tuesday, July 11, 2017

New NJ Estate Tax Law, Wills, & Estate Seminar

 Edison Library 
New NJ Estate Tax Law, Wills, & Estate Seminar 
October 3 at 7pm Free community program
Edison Library Main Branch 340 Plainfield Ave. 
Edison, NJ 08817

WILLS & ESTATE ADMINISTRATION- PROTECT YOUR FAMILY
AND MAKE PLANNING EASY
SPEAKER: Kenneth Vercammen, Esq. Edison, NJ
                    Author- Wills & Estate Administration ABA
        The January 1, 2017 New Estate Tax law made a number of substantial changes in the administration of estates and trusts in New Jersey,
Main Topics:
  1. 2017 changes to NJ Estate Tax & changes to taxes on pensions
  2. 2017 changes in Federal Estate and Gift Tax
  3. The New Probate Law and preparation of Wills 
  4. Power of Attorney 
  5. Living Will
  6. Administering the Estate/ Probate/ Surrogate 
               You do not need to be an Edison resident to attend.
                COMPLIMENTARY MATERIAL: Brochures on Wills, Probate and Administration of an Estate Sales for Seniors, and Trusts.

For info call 732-287-2298 x 228
To register go to http://www.edisonpubliclibrary.net/index-ek.shtmlFacebook



NJ recognizes writings intended as Wills

3B:3-2c permits the use of extrinsic evidence to establish that a document constitutes the testator’s will, including writings intended as wills and portions of the document that are not in the testator’s handwriting.

Based on § 2-503 of the Uniform Probate Code, N.J.S.A. § 3B:3-3 recognizes writings intended as wills:
Although a document or writing added upon a document was not executed in compliance with N.J.S.A. 3B:3-2, the document or writing is treated as if it had been executed in compliance with N.J.S.A. 3B:3-2 if the proponent of the document or writing establishes by clear and convincing evidence that the decedent intended the document or writing to constitute: (1) the decedent’s will; (2) a partial or complete revocation of the will; (3) an addition to or an alteration of the will; or (4) a partial or complete revival of his formerly revoked will or formerly revoked portion of the will. Source: http://www.americanbar.org/content/dam/aba/publishing/rpte_ereport/2013/2_april/te_alert.authcheckdam.pdf

Indeed, this statute has created a wide opening beyond holographic wills. For example, under this statute, a will prepared by the testator himself on his computer and signed by him would be valid. This document would not be a holographic will because the material provisions are not in his handwriting.
The Appellate Division in New Jersey in 2012 continued the interesting evolution of the concept of writings intended as wills in New Jersey. Modeled after UPC 2-503 (“Harmless Error”), N.J.SA. §3B:3-2c permits the use of extrinsic evidence to establish that a document that does not comply with testamentary formalities can still constitute a valid will, including writings intended as wills and portions of the document that are not in the testator’s handwriting.
In the case of Estate of Richard D. Ehrlich, 427 N.J. Super. 64, 47 A.3d 12 (App. Div. 2012), the Appellate Division upheld the probate of a copy of an unsigned document as a valid writing intended as a will. The appeal to the  NJ Supreme was Dismissed by stipulation of the parties on 4/26/13.
Facts
Decedent Richard Ehrlich was a trust and estate attorney for over 50 years. He died on September 21, 2009. His only next of kin (his heirs) were his deceased brother’s three children -- Todd and Jonathan Ehrlich, and Pamela Venuto.
The material facts were undisputed. The decedent had not seen or had any contact with Todd or Pamela in over 20 years, but he did maintain a relationship with Jonathan. In fact, the decedent told his closest friends that Jonathan was the person to contact if he became ill or died, and that Jonathan was the person to whom the decedent would leave his estate.
Jonathan learned of his uncle's death nearly two months after the passing. Jonathan then located a copy of a purported will in a drawer near the rear entrance of the decedent's home.
Jonathan filed a verified complaint seeking to have the document admitted to probate. His siblings, Todd and Pamela, objected.
The document proffered by Jonathan was described by the Appellate Division as follows:
[It] is a copy of a detailed fourteen-page document entitled “Last Will and Testament.” It was typed on traditional legal paper with Richard Ehrlich’s name and law office address printed in the margin of each page. The document does not contain the signature of decedent or any witnesses. It does, however, include, in decedent's own handwriting, a notation at the right-hand corner of the cover page: “Original mailed to H. W. Van Sciver, 5/20/2000[.]” The document names Harry W. Van Sciver as Executor of the purported Will and Jonathan as contingent Executor. Van Sciver was also named Trustee, along with Jonathan and Michelle Tarter as contingent Trustees. Van Sciver predeceased the decedent and the original of the document was never returned.
1
Id. at 68.
The purported will provided: $50,000 to Pamela; $75,000 to Todd; 25% of the residue to a trust for the benefit of a friend, Kathryn Harris; and 75% of the residue to Jonathan.
It was “undisputed that the document was prepared by the decedent and just before he was to undergo life-threatening surgery.” Id. at 68. On the same date as the proffered will -- May 20, 2000 – the decedent also executed a Power of Attorney and living will, “both witnessed by the same individual, who was the Burlington County Surrogate. As with the purported Will, these other documents were typed on traditional legal paper with Richard Ehrlich's name and law office address printed in the margin of each page.” Id. at 69.
The evidence established that, years after drafting these documents, the decedent acknowledged to others that he had a will and wished to delete the bequest to his former friend, Kathryn Harris. Nevertheless, no later will was ever found.
Analysis
After discovery, the parties cross-moved for summary judgment. The trial court granted Jonathan's motion and admitted the document to probate. The court reasoned:
First, since Mr. [Richard] Ehrlich prepared the document, there can be no doubt that he viewed it. Secondly, while he did not formally execute the copy, his hand written notations at the top of the first page, effectively demonstrating that the original was mailed to his executor on the same day that he executed his power of attorney and his health directive is clear and convincing evidence of his "final assent" that he intended the original document to constitute his last will and testament as required both by N.J.S.A. 3B:3-3 and [In re Probate of Will and Codicil of Macool, 416 N.J. Super. 298, 310 (App. Div. 2010)].
Id. at 69.
The Appellate Division articulated the issue as “whether the unexecuted copy of a purportedly executed original document sufficiently represents decedent's final testamentary intent to be admitted into probate under” N.J.S.A. § 3B:3-3. Id. at 69-70.
Citing to the legislative history of that statute, and In re Probate of Will and Codicil of Macool, 416 N.J. Super. 298, 311 (App. Div. 2010), the Appellate Division continued:
Thus, N.J.S.A. 3B:3-3, in addressing a form of testamentary document not executed in compliance with N.J.S.A. 3B:3-2, represents a relaxation of the rules regarding formal execution of Wills so as to effectuate the intent of the testator. This legislative
leeway happens to be consonant with “a court's duty in probate matters . . . ‘to ascertain and give effect to the probable intention of the testator.’” Macool, supra, 416 N.J. Super. at 307 (quoting Fidelity Union Trust v. Robert, 36 N.J. 561, 564 (1962)) (internal citations and quotation marks omitted in original). As such, Section 3 dispenses with the requirement that the proposed document be executed or otherwise signed in some fashion by the testator. Macool, supra, 416 N.J. Super. at 311.
The court explained N.J.S.A. § 3B:3-3 “places on the proponent of the defective instrument the burden of proving by clear and convincing evidence that the document was in fact reviewed by the testator, expresses his or her testamentary intent, and was thereafter assented to by the testator.” Id. at 74.
The Appellate Division then noted that the decedent undeniably prepared and reviewed the challenged document. In disposing of his entire estate and making specific bequests, the purported will both contains a level of formality and expresses
sufficient testamentary intent. As the motion judge noted, in its form, the document "is clearly a professionally prepared will and complete in every respect except for a date and its execution.” Moreover, as the only living relative with whom decedent had any meaningful relationship, Jonathan, who was to receive the bulk of his uncle's estate under the purported will, was the natural object of decedent's bounty.
Id. at 74.
The court then turned to whether the decedent “gave his final assent” to the
document:
Clearly, decedent's handwritten notation on its cover page evidencing that the original was sent to the executor and trustee named in that very document demonstrates an intent that the document serve as its title indicates -- the "Last Will and Testament" of Richard Ehrlich. In fact, the very same day he sent the original of his Will to his executor, decedent executed a power of attorney and health care directive, both witnessed by the same individual. As the General Equity judge noted, "[e]ven if the original for some reason was not signed by him, through some oversight or negligence his dated notation that he mailed the original to his executor is clearly his written assent of his intention that the document was his Last Will and Testament."
Id. at 74.
The appellate court also noted that, as late as 2008, the decedent “repeatedly orally acknowledged and confirmed the dispositionary contents therein to those closest to him in life.” Id. at 74-75.
The court further concluded that the fact that the document was only a copy of the original sent to the decedent's executor was not dispositive, since N.J.S.A. § 3B:3-3 does not require that the document be an original. The court determined that the evidence was compelling as to the testamentary sufficiency of the document, so as to rebut any presumption of revocation or destruction due to the absence of the original. Id. at 76.
One of the most intriguing aspects of the Ehrlich decision is the dissent by the Honorable Stephen Skillman, J.A.D. (retired and temporarily assigned on recall). He concluded, “I do not believe that N.J.S.A. § 3B:3-3 can be reasonably construed to authorize the admission to probate of an unexecuted will.” Id. at 78. In other words, Judge Skillman found that the statute authorized the admission to probate of a defectively executed will, and not an unexecuted will. However, Judge Skillman was also on the three-judge panel that decided the appeal in Macool – and reached a different conclusion in dicta.
In Ehrlich, Judge Skillman relied on the legislative history of N.J.S.A. § 3B:3-3 and national standards under the Uniform Probate Code. He explained, “Although I was on the panel that decided Macool, upon further reflection I have concluded that that opinion gives too expansive an interpretation to N.J.S.A. § 3B:3-3; specifically, I disagree with the dictum that seems to indicate a draft will that has not been either signed by the decedent or attested to by any witnesses can be admitted to probate, provided the putative testator gave his or her ‘final assent’ to the proposed will.”
Judge Skillman stated that the proper standards for the case at bar were those dealing with lost wills. He would have remanded the matter for proceedings under those standards. Id. at 83-84.
Meanwhile, the majority opinion addressed Judge Skillman’s dissent as follows:
Our dissenting colleague, who participated in Macool, retreats from its holding and now discerns a specific requirement in Section 3 that the document be signed and acknowledged before a court may even move to the next step and decide whether there is clear and convincing evidence that the decedent intended the document to be his Will, and therefore excuse any deficiencies therein. We find no basis for such a constrictive construction in the plain language of the provision, which in clear contrast to Section 2, expressly contemplates an unexecuted Will within its scope. Otherwise what is the point of the exception?
Id. at 72.
The holding in Ehrlich demonstrates that the erosion of the requirements of testamentary formalities continues, and even unsigned wills may be probated. The concept of writings intended as wills can be expected to continue to evolve – and provide fertile ground for estate litigation – in those cases involving non-traditional testamentary “documents.”

Back in 2004 In Will of Ferree 369 N.J. Super. 1 (2004) the novel question presented by the appeal is whether the filling in the blanks on a pre-printed will form, signed but not witnessed as required by statute, satisfies the requirements for recognition as a holographic will. The Chancery Division judge held that it does not. He dismissed the complaint seeking admission of the purported will to probate and declared the decedent to have died intestate.
The NJ Appellate Division agree and affirm substantially for the reasons expressed by Judge Clarkson S. Fisher, Jr., in his comprehensive reported  opinion in 2003 (Ch. Div. 2003). The Appellate Division did not write a full opinion.
         The NJ Legislature effectively reversed the decision in Will of Ferree to permit certain writings and pre-printed forms when the New Probate Law was adopted.
         As set forth in the NJ SENATE JUDICIARY COMMITTEE STATEMENT TO
SENATE, No. 708:
        “…The bill also clarifies situations where writings that are intended as wills would be allowed, but requires that the burden of proof on the proponent would be by clear and convincing evidence.”

   N.J.S.3B:3-3 was amended to read as follows:
    3B:3-3. [Holographic will] Writings intended as wills.
    [A will which does not comply with N.J.S.3B:3-2 is valid as a holographic will, whether or not witnessed, if the signature and material provisions are in the handwriting of the testator- old statute]
    Although a document or writing added upon a document was not executed in compliance with N.J.S.3B:3-2, the document or writing is treated as if it had been executed in compliance with N.J.S.3B:3-2 if the proponent of the document or writing establishes by clear and convincing evidence that the decedent intended the document or writing to constitute: (1) the decedent's will; (2) a partial or complete revocation of the will; (3) an addition to or an alteration of the will; or (4) a partial or complete revival of his formerly revoked will or formerly revoked portion of the will.   New statute

         The intent of the Legislature was to overrule the decision in Will of Ferree.

Chapter 132 of 2004 was Senate Bill number S708 of the 211th Legislature previously Bill A2905 of the previous Legislature.  In the Statement to Bill number S708 of the 26th January 2004 the Senate Judiciary Committee reported favorably on the Bill and states that:

‘This Bill is modeled on the 1990 version of the Uniform Probate Code’.

Section 2-503 of the Uniform Probate Code is exactly the same as article 3B: 3-3 of Chapter 132 of 2004 – the new New Jersey Probate Law.  Section 2-502 (c) of the Uniform Probate Code is exactly the same as article 3B: 3-2 (c) of Chapter 132 of 2004.  Therefore, it is admissible that the case law and interpretations given to those sections of the Uniform Probate Code in other US jurisdictions where it was adopted can be referred to it by the New Jersey Court.

‘The official comment of Section 2-503 of the [Uniform Probate] Code provides that the basic purpose of the rule is to place the burden on the proponent of a document to prove by clear and convincing evidence that the decedent intended the document to be his will.’¹



¹ Sean P. Milligan, ‘The Effect of a Harmless Error in Executing a Will: Why Texas should adopt section 2-503 of the Uniform Probate Code’ – Saint Mary’s Law Journal 2005; Vol 36; Number 3; pp 801

‘Code Policy and Devices

         The [Uniform Probate] Code’s will provisions have three primary objectives: (1) to make uniform among the jurisdictions the execution requirements for wills; (2) to reduce execution requirements to their indispensable minimum; and (3) to validate as often as possible instruments purporting to be wills.’2

         ‘Section 2-503 of the Uniform Probate Code provides a remedy in those cases where a rejection of the will causes significant intent denying results to occur notwithstanding the available proof of that intent. Its purpose is to convert ineffective attempts at finalized intent into effective, finalized plans if the standard of evidence can be satisfied.

         The provision is unspecific as to which formalities may be dispensed.  With the exception that there must be a document or a writing added upon a document, all other formalities are subject to the dispensing remedy.  Considering the uniqueness of wills validity situations, the dispensing power will be exercised on a case-by-case basis’.3

         McGovern and Kurtz in ‘Wills, Trusts and Estates including Taxation and Future Interests’ (2004) page 3 state that, ‘The Uniform Probate Code allows wills which fail to meet the formal requirements if there is clear and convincing evidence that the decedent intended the document to be a will’.

         Montana has had a section 2-503 dispensing power since 1993.  In Re: Estate of Kuralt , 15 P. 3d, 931, 932-33 (Mont. 2000) the facts are quite similar to the present complaint.

         ‘The decedent in Kuralt had been involved in a long-term extramarital relationship.  Having previously deeded a cabin and twenty acres to this intimate friend for no consideration, Kuralt wrote a letter to her from his hospital bed stating: ‘I’ll have the lawyer visit the hospital to be sure you inherit the rest of the place in MT. if it comes to that’.  (The opinion notes that the testator was reluctant to contact a lawyer because he wished to keep the relationship secret).  Kuralt wrote the letter while extremely ill, dying a mere two weeks later.  Kuralt died testate, having executed a valid will several years earlier.  The beneficiaries of Kuralt’s will were his wife and children, with no mention of his mistress.  Nonetheless, Kuralt’s companion sought to probate Kuralt’s letter as a valid codicil to his original will.

         The court focused on the decedent’s last months in order to find that the letter provided sufficient evidence of the decedent’s testamentary intent.  The court emphasized that Kuralt drafted the letter ‘in extremis”, as he was in the hospital and died only two weeks after having sent the letter.


2 Uniform Probate Code in a Nutshell, Lawrence H. Averill (2000) p. 146

3 Uniform Probate Code in a Nutshell, Lawrence H. Averill (2000) p. 151-152
The court also placed considerable weight on Kuralt’s conveyance of the twenty acres and cabin for no real consideration and on the extrinsic evidence that he intended to convey the remainder of his Montana property to the mistress in much the same way.  Additionally, Kuralt underlined the word ‘inherit’ in his letter, further suggesting his intent to make a posthumous disposition of his property.  All of this evidence provided factual support sufficient for a determination that Kuralt intended that his mistress have the remainder of the Montana property upon his death, despite Kuralt’s failure to execute a formal codicil.  The court thus saw fit to uphold Kuralt’s testamentary wishes, granting the property to his mistress as Kuralt himself intended.4

         Therefore, the Montana court, basing itself on a provision in its Statute equivalent to section 2-503 of the Uniform Probate Code, probated a letter written two weeks before death as a valid codicil.  The similarity with the facts of the present complaint is striking.

         In 1991, the New Jersey Supreme Court was ready to apply the Substantial Compliance doctrine as well as dispensing power to avert the injustices that would have resulted in adhering to strict compliance.  ‘In re Will of Ranney, the court renounced the doctrine of strict compliance in favor of the application of an equitable remedy exhibiting characteristics of both the substantial compliance doctrine and the U.P.C. section 2-503 dispensing power.  The court in Ranney was faced with an alleged will, a document that included the signature of two witnesses on an attached self-proving affidavit but not on the actual will.  The appellate division, stretching the bounds of the statute, presumably to reach the more desirable outcome for Mr. Ranney’s intended beneficiaries, concluded that the self-proving affidavit constituted a part of the will and, moreover, that the witnesses’ signatures on the affidavit provided valid attestation of the actual will.  Thus, the appellate division held that the will literally complied with the statutory formalities.

         The Supreme Court disagreed that the witnesses’ signatures on the affidavit constituted literal compliance with the statute.  However, the court decided that the signatures of the affidavit in Ranney did substantially comply with the statutory formalities.

         In reaching this conclusion, the court in Ranney inquired into the legislative history of this statute, discovering that the wills statute was in fact adopted to liberate the requirements for will execution from the exacting standards imposed by wills acts prior to the adoption of the U.P.C. and to prevent minor defects from automatically invalidating otherwise validly executed wills.  The court asserted its belief that ‘the Legislature did not intend that a will should be denied probate because the witnesses signed in the wrong place’.

         This opinion would not be nearly as interesting if the court had simply stopped here, having chosen to apply the substantial compliance doctrine and sending the beneficiaries home  with their shares of the  estate as Mr. Ranney desired.  Instead,  the court slipped in ….

4 Leigh A. Shipp’s ‘Equitable Remedies for Non conforming Wills: New Choices for Probate Courts in the United States’ – Tulane Law Review 2005; vol 79; Number 3; pp. 737-738


… four words that do not usually accompany a substantial compliance analysis; the court stated, ‘[w]hen formal defects occur, proponents should prove by clear and convincing evidence that the will substantially complies with statutory requirements’.  The language ‘clear and convincing evidence’ in the wills context, as we have seen, signals the dispensing  power  of  U.P.C.  section  2-503,  not  the doctrine of substantial compliance. 
The court nevertheless cited U.P.C. section 2-503 and the Restatement (Second) of Property: Donative Transfers, as if the language were found therein… …

         The Ranney holding certainly provides a new approach to the available remedies for nonconforming wills.  In no other case has the evidentiary standard of the U.P.C. dispensing power been intermingled with the substantial compliance analysis.  The Ranney decision suggests that, in New Jersey, clear and convincing evidence that the testator intended the document to constitute his will likely will convince the court to overlook minor defects, such as the misplacement of the witnesses’ signatures.’5

         It is important to stress that the decision in Ranney was handed in 1991, fourteen years before the New Jersey Legislature decided to place section 2-503 of the Uniform Probate Code in its Statute Book.  The New Jersey Supreme Court was ready to apply substantial compliance and dispensing power even though there was as yet no legislation in place.

         When discussing the dispensing power provision Sean P. Milligan6 states that: ‘Litigation levels and respect for formalities will not be affected to a large extent by the [dispensing power provision].  Given that fact, it is important to make sure we ask the right question.  The question should not be whether the testator complied with formalities; rather the question should be whether the testator intended to create a will.  The question gets to the point more effectively than asking whether the testator complied with will formalities because it allows the court to look directly at intent.  The proponents must prove the testator’s intent with clear and convincing evidence7.  Therefore, the [dispensing power provision] imposes a heavy burden on the proponent of the will to demonstrate to the court that the error should be ignored highlighting the importance of procedural safeguards for the testator8.  [This provision] would also provide consistency in probate law by applying a standard of clear and convincing evidence of the testator’s intent in all cases.’ 

         At pp. 812 then Milligan observes that: ‘When the testator misunderstands attestation requirements, it seems only reasonable that the law should not allow such a blunder to invalidate completely an otherwise valid will, if the proponents present clear and convincing evidence of testamentary intent’.

         In conclusion, it has been stated that: “The law on wills should be about results; and the end result should be to probate wills when there is clear and convincing evidence that the testator intended to create a will.  The clear and convincing evidence standard serves essentially the same function as statutory execution requirements.  By requiring the proponent of a will to provide clear and convincing evidence of testamentary intent, the testator is protected against unwanted imposition and fraud from interested third parties.”9

Kenneth  Vercammen, Esq. – Probate, Estate Planning & Elder Law bio 

Kenneth A. Vercammen is a trial attorney in Edison, NJ. He is co-chair of the ABA Probate & Estate Planning Law Committee of the American Bar Association Solo Small Firm Division.  The is the author of the ABA book “Wills and Estate Administration, available at http://shop.americanbar.org/.”
He is a speaker for the NJ State Bar Association at the annual Nuts & Bolts of Elder Law & Estate Administration program. 
He was Editor of the ABA Estate Planning Probate Committee Newsletter. Mr. Vercammen has published over 150 legal articles in national and New Jersey publications on Wills, litigation, estates, probate law and trial topics. He is a highly regarded lecturer on litigation and probate law for the American Bar Association, NJ ICLE, New Jersey State Bar Association and Middlesex County Bar Association. His articles have been published in noted publications included New Jersey Law Journal, ABA Law Practice Management Magazine, and New Jersey Lawyer. He established the NJlaws website www.njlaws.com which includes many articles on Estate Planning, Probate and Wills.
KENNETH  VERCAMMEN & ASSOCIATES, PC
ATTORNEY AT LAW
2053 Woodbridge Ave.
Edison, NJ 08817
(Phone) 732-572-0500
 (Fax)    732-572-0030
www.njlaws.com
http://www.njwillsprobatelaw.com



5 Shipp op-cit p. 741

6 Milligan op. cit pp. 810-811

7 John H. Langbein, Curing Execution Errors and Mistaken Terms in Wills the Restatement of Wills Delivers New Tools (and New Duties) to Probate Lawyers, 18 PROB & PROP. 28, 29-31 (2004) pp. 34-36 (stating that a clear and convincing evidence standard of intent, as opposed to a reasonable doubt standard would be an adequate standard because the clear and convincing evidence standard is prominent in other areas of gratuitous transfers, such as deeds, trusts and insurance contracts).

8 Emily Sherwin, Clear and Convincing Evidence of Testamentary Intent: The Search for a Compromise between Formality and Adjudicative Justice, 34 CONN. L. Rev 453, 460 (2002) p. 453, 460 (arguing that ‘[b]y placing the burden of proof upon the proponent of a defective instrument, and by requiring the proponent to [show] clear and convincing evidence … [of the testator’s intent, the {dispensing power provision}] imposes procedural standards appropriate to the seriousness of the issue.

9  Bruce H. Mann, “Formalities and Formalism in the Uniform Probate Code, 142 U. PA. L. Rev. 1033, 1040 (1994)        
   p.820




Friday, July 7, 2017

Protection of persons assisting with fiduciary


3B:14-37 Protection of persons assisting with fiduciary


3B:14-37 Protection of persons assisting or dealing with fiduciary.


a. A person other than a beneficiary who in good faith either assists a fiduciary or deals with him for value is protected as if the fiduciary properly exercised his power.

b. The fact that a person knowingly deals with a fiduciary does not alone require the person to inquire into the existence of a power or the propriety of its exercise.

c. Except as to real property specifically devised by will, no provision in any will, trust or order of court purporting to limit the power of a fiduciary is effective except as to persons with actual knowledge thereof.

d. A person who in good faith pays, transfers or delivers to a fiduciary money or other property is not responsible for the proper application thereof by the fiduciary; and any right or title acquired from the fiduciary in consideration of the payment, transfer or delivery is not invalid in consequence of a misapplication by the fiduciary.

e. A person other than a beneficiary who in good faith assists a former trustee, or who in good faith and for value deals with a former trustee, without knowledge that the trusteeship has terminated is protected from liability as if the former trustee were still a trustee.

f. The protection here expressed extends to instances in which some procedural irregularity or jurisdictional defect occurred in proceedings leading to the issuance of letters, including a case in which the alleged decedent is found to be alive.

g. The protection here expressed is in addition to that provided by comparable provisions of the laws relating to commercial transactions and laws simplifying transfers of securities by fiduciaries. 

Voidable sales, encumbrances or transactions; ex

Liability of fiduciary for improper exercise

Liability of fiduciary for improper exercise


3B:14-35 Liability of fiduciary for improper exercise


3B:14-35 Liability of fiduciary for improper exercise of power concerning estate

If the exercise of power concerning the estate is improper, the fiduciary is liable to interested persons for damage or loss resulting from breach of his fiduciary duty to the same extent as a trustee of an express trust. The rights of purchasers and others dealing with a fiduciary shall be determined as provided in N.J.S. 3B:14-28 and N.J.S. 3B:14-29.

Asserting claims against estate

Personal liability for obligations arising

Personal liability of fiduciary on contracts

Powers and duties of substituted fiduciary

When payment or delivery may not be made


3B:14-27. When payment or delivery may not be made


3B:14-27. When payment or delivery may not be made
Payment or delivery under N.J.S. 3B:14-25 may not be made if a resident creditor of the estate has notified the debtor or the person having possession of the personal property that the debt should not be paid nor the property delivered to the domiciliary foreign fiduciary.

L.1981, c. 405, s. 3B:14-27, eff. May 1, 1982.
3B:14-28. Filing proof of domiciliary foreign fiduciarys authorityIf letters have not issued in this State or an action therefor is not pending in this State, a domiciliary foreign fiduciary or any other person may file in the office of the Clerk of the Superior Court, or if the decedent, ward, or trust has an interest in real estate in any county of this State, then either in that office or in the office of the surrogate of that county, authenticated copies of the letters of appointment of the fiduciary and of any official bond he has given.

L.1981, c. 405, s. 3B:14-28, eff. May 1, 1982.
3B:14-29. Exercise of powers by domiciliary foreign fiduciary; security for costsUpon compliance with N.J.S. 3B:14-28, a domiciliary foreign fiduciary may exercise as to assets in this State all powers he would have had if he had received letters or been appointed in this State, including the power to release and discharge real or personal estate from a mortgage, judgment or other lien or encumbrance held by his decedent, ward or trust. Whether N.J.S. 3B:14-28 is complied with prior to, pending, or subsequent to the action, a domiciliary foreign fiduciary may maintain, or be made a party defendant or otherwise, to any action in any court of this State as if letters had been granted to him in this State, subject to any conditions generally imposed upon nonresident parties. Security for costs may be required of him.

L.1981, c. 405, s. 3B:14-29, eff. May 1, 1982.
3B:14-30. Termination of domiciliary foreign fiduciarys powers; protection of third persons; exercise of powers binding on local fiduciary
The power of a domiciliary foreign fiduciary under N.J.S. 3B:14-28 or N.J.S. 3B:14-29 shall be exercised only if letters have not been issued or an action therefor is not pending in this State. The issuance of local letters or an action therefor terminates the power of the domiciliary foreign fiduciary to act under N.J.S. 3B:14-29, but a court in this State may allow the domiciliary foreign fiduciary to exercise limited powers to preserve the estate. No person who, before receiving actual notice of local letters or an action therefor, has changed his position in reliance upon the powers of the domiciliary foreign fiduciary, shall be prejudiced by reason of the action for, or issuance of, local letters. The local fiduciary is subject to all duties and obligations which have accrued by virtue of the exercise of the powers by the domiciliary foreign fiduciary and may be substituted for him in any action in this State.

http://www.njlaws.com/3B-14-27.html?id=6396&a=

Release upon payment or delivery in good faith

Payment of debt or delivery of certain personal property


3B:14-25. Payment of debt or delivery of certain personal property


3B:14-25. Payment of debt or delivery of certain personal property; requirements After the expiration of 60 days from the appointment of a domiciliary foreign fiduciary, any person indebted to the estate or having possession or control of personal property, or of an instrument evidencing a debt, obligation, stock or chose in action belonging to the estate may pay the debt, deliver the personal property, or the instrument evidencing the debt, obligation, stock or chose in action, to the domiciliary foreign fiduciary upon being presented with a certificate of his letters or other proof of his authority and an affidavit made by or on his behalf stating:

a. The date of the letters of the domiciliary foreign fiduciary, or the date when he first received authority to act;

b. That no letters have issued in this State and no action therefor is pending in this State; and

c. That the domiciliary foreign fiduciary is entitled to payment or delivery.



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Authorization to exercise other powers.

Powers


3B:14-23 Powers.


3B:14-23 Powers.
3B:14-23. Powers. In the absence of contrary or limiting provisions in the judgment or order appointing a fiduciary, in the will, deed, or other instrument or in a subsequent court judgment or order, every fiduciary shall, in the exercise of good faith and reasonable discretion, have the power:

a. To accept additions to any estate or trust from sources other than the estate of the decedent, the minor, the person who is incapacitated, or the settlor of a trust;

b. To acquire the remaining undivided interest in an estate or trust asset in which the fiduciary, in a fiduciary capacity, holds an undivided interest;

c. To invest and reinvest assets of the estate or trust under the provisions of the will, deed, or other instrument or as otherwise provided by law and to exchange assets for investments and other property upon terms as may seem advisable to the fiduciary;

d. To effect and keep in force fire, rent, title, liability, casualty, or other insurance to protect the property of the estate or trust and to protect the fiduciary;

e. With respect to any property or any interest therein owned by an estate or trust, including any real property belonging to the fiduciarys decedent at death, except where the property or any interest therein is specifically disposed of:

(1) To take possession of and manage the property and to collect the rents therefrom, and pay taxes, mortgage interest, and other charges against the property;

(2) To sell the property at public or private sale, and on terms as in the opinion of the fiduciary shall be most advantageous to those interested therein;

(3) With respect to fiduciaries other than a trustee, to lease the property for a term not exceeding three years, and in the case of a trustee to lease the property for a term not exceeding 10 years, even though the term extends beyond the duration of the trust, and in either case including the right to explore for and remove mineral or other natural resources, and in connection with mineral leases to enter into pooling and unitization agreements;

(4) To mortgage the property;

(5) To grant easements to adjoining owners and utilities;

(6) A fiduciary acting under a will may exercise any of the powers granted by this subsection e. notwithstanding the effects upon the will of the birth of a child after its execution;

f. To make repairs to the property of the estate or trust for the purpose of preserving the property or rendering it rentable or saleable;

g. To grant options for the sale of any property of the estate or trust for a period not exceeding six months;

h. With respect to any mortgage held by the estate or trust to continue it upon and after maturity, with or without renewal or extension, upon terms as may seem advisable to the fiduciary and to foreclose, as an incident to collection of any bond or note, any mortgage and purchase the mortgaged property or acquire the property by deed from the mortgagor in lieu of foreclosure;

i. In the case of the survivor or survivors of two or more fiduciaries to administer the estate or trust without the appointment of a successor to the fiduciary or fiduciaries who have ceased to act and to exercise or perform all of the powers given unless contrary to the express provision of the will, deed, or other instrument;

j. As a new, alternate, successor, substitute, or additional fiduciary or fiduciaries, to have or succeed to all of the powers, duties, and discretion of the original fiduciary or fiduciaries, with respect to the estate or trust, as were given to the original fiduciary or fiduciaries named in or appointed by a will, deed, or other instrument, unless the exercise of the powers, duties, or discretion of the original fiduciary or fiduciaries is expressly prohibited by the will, deed, or other instrument to any successor or substitute fiduciary or fiduciaries;

k. Where there are three or more fiduciaries qualified to act, to take any action with respect to the estate or trust which a majority of the fiduciaries shall determine; a fiduciary who fails to act through absence or disability, or a dissenting fiduciary who joins in carrying out the decision of a majority of the fiduciaries if the dissent is expressed promptly in writing to the cofiduciaries, shall not be liable for the consequences of any majority decision, provided that liability for failure to join in administering the trust or to prevent a breach of trust may not thus be avoided;

l. To employ and compensate attorneys for services rendered to the estate or trust or to a fiduciary in the performance of the fiduciarys duties;

m. To compromise, contest, or otherwise settle any claim in favor of the estate, trust, or fiduciary or in favor of third persons and against the estate, trust, or fiduciary, including transfer inheritance, estate, income, and other taxes;

n. To vote in person or by proxy, discretionary or otherwise, shares of stock or other securities held by the estate or trust;

o. To pay calls, assessments, and any other sums chargeable or accruing against or on account of shares of stock, bonds, debentures, or other corporate securities in the control of a fiduciary, whenever the payments may be legally enforceable against the fiduciary or any property of the estate or trust or the fiduciary deems payment expedient and for the best interests of the estate or trust;

p. To sell or exercise stock subscription or conversion rights, participate in foreclosures, reorganizations, consolidations, mergers, or liquidations, and to consent to corporate sales or leases and encumbrances, and, in the exercise of those powers, the fiduciary is authorized to deposit stocks, bonds, or other securities with any custodian, agent, protective or other similar committee, or trustee under a voting trust agreement, under terms and conditions respecting the deposit thereof as the fiduciary may approve;

q. To execute and deliver agreements, assignments, bills of sale, contracts, deeds, notes, receipts, and any other instrument necessary or appropriate for the administration of the estate or trust;

r. In the case of a trustee:

(1) To hold two or more trusts or parts of trusts created by the same instrument, as an undivided whole, without separation as between the trusts or parts of the trusts, provided that separate trusts or parts of trusts shall have undivided interests and provided further that no holding shall defer the vesting of any estate in possession or otherwise;

(2) To divide a trust, before or after its initial funding, into two or more separate trusts, provided that such division will not materially impair the accomplishment of the trust purposes or the interests of any beneficiary. Distributions provided for by the governing instrument may be made from one or more of the separate trusts;

s. To distribute in kind any property of the estate or trust as provided in article 1 of chapter 23 of this Title;

t. To join with the surviving spouse, partner in a civil union, or domestic partner, the executor of the decedents will, or the administrator of the decedents estate in the execution and filing of a joint income tax return for any period prior to the death of a decedent for which no return or gift tax return on gifts made by the decedents surviving spouse, partner in a civil union, or domestic partner was filed, and to consent to treat the gifts as being made one-half by the decedent, for any period prior to a decedents death, and to pay taxes thereon as are chargeable to the decedent;

u. To acquire or dispose of an asset, including real or personal property in this State or another state, for cash or on credit, at public or private sale, and to manage, develop, improve, exchange, partition, change the character of, or abandon an estate asset;

v. To continue any business constituting the whole or any part of the estate for so long a period of time as the fiduciary may deem advisable and advantageous for the estate and persons interested therein;

w. In the case of a qualified bank as defined in section 1 of P.L.1948, c.67 (C.17:9A-1), and an out-of-State bank as defined in section 1 of P.L.1948, c.67 (C.17:9A-1), which has established a trust office in this State to purchase, sell, and maintain for any fiduciary account, securities issued by an investment company which is operated and maintained in accordance with the Investment Company Act of 1940, 15 U.S.C.s.80a-1 et seq., and for which the qualified bank or out-of-State bank is providing services as an investment advisor, investment manager, custodian, or otherwise, including those for which it receives compensation, if:

(1) The investment is otherwise in accordance with applicable fiduciary standards; and

(2) The investment is authorized by the agreement or instrument creating the fiduciary account that gives the qualified bank or out-of-State bank investment authority, or by court order; or

(3) The qualified bank or out-of-State bank provides written notice not less than annually by prospectus, account statement, or otherwise, disclosing to any current income beneficiaries of the trust the services provided by the qualified bank or its affiliate or out-of-State bank to the investment company, and the rate, formula, or other method by which compensation paid to the qualified bank or its affiliate or out-of-State bank is determined and the qualified bank or out-of-State bank does not receive a written objection from any current income beneficiary within 30 days after receipt of this notice. If a written objection is received from any current income beneficiary pursuant to this paragraph (3), no such investment of the trust assets of that fiduciary account shall be made or maintained.

Such investment shall not be deemed self-dealing or a fiduciary conflict; nor shall the fact that other beneficiaries of fiduciary accounts of the qualified bank or out-of-State bank have similar investments be deemed to be an improper commingling of assets by the qualified bank or out-of-State bank.

For purposes of this subsection, fiduciary account shall include a trust, estate, agency, or other account in which funds, property, or both, are held by a qualified bank pursuant to section 28 of P.L.1948, c.67 (C.17:9A-28), or an account for which a qualified bank or out-of-State bank acts as investment advisor or manager or an account held by an out-of-State bank as defined in section 1 of P.L.1948, c. 67 (C.17:9A-1);

x. To employ and compensate accountants from the fiduciary fund for services rendered to the estate or trust or to a fiduciary in the performance of the fiduciarys duties, including the duty of a corporate or other fiduciary with respect to the preparation of accountings, without reduction in commissions due to the fiduciary, so long as such accountings are not the usual, customary, or routine services provided by the fiduciary in light of the nature and skill of the fiduciary. In evaluating the actions of the fiduciary under this subsection, the court shall consider the size and complexity of the fiduciary fund, the length of time for which the accounting is rendered, and the increased risk and responsibilities imposed on fiduciaries as a result of revisions to laws affecting fiduciaries including, but not limited to, the Uniform Principal and Income Act of 2001, P.L.2001, c.212 (C.3B:19B-1 et seq.) and the Prudent Investor Act, P.L.1997, c.26 (C.3B:20-11.1 et seq.) provided that such revisions of the laws affecting fiduciaries were enacted after the fiduciary responsibilities under the corresponding will, deed, or other instrument, or court judgment or order, were imposed on, and assumed by, the fiduciary. For purposes of this subsection, Accountant means a person who is registered as a certified public accountant pursuant to the provisions of the Accountancy Act of 1997, P.L.1997, c.259 (C.45:2B-42 et seq.), or an accounting firm which is organized for the practice of public accounting pursuant to the provisions of the Accountancy Act of 1997, P.L.1997, c.259 (C.45:2B-42 et seq.) and The Professional Service Corporation Act, P.L.1969, c.232 (C.14A:17-1 et seq.); and

y. The powers set forth in this section are in addition to any other powers granted by law, and by a will, deed, or other instrument.

amended 1991, c.503, s.2; 1993, c.360; 1997, c.250; 2003, c.33; 2013, c.103, s.45.

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