decedent died intestate in nj april 2000-help!

[jh-3]

i am the surviving son, with one sister. i am also executor of his small ($26,000) estate. decedent has surviving spouse, a second wife who filed for divorce in state of ri in july 1998. the pending divorce was to be finalized 5 days after my father's death. she renounced administration of the estate, as my father left $80,000 in medical debts, and she could not afford to cover these debts. decedent also has life insurance of $60,000, and a federal surviving spouse annuity of 567/month, payable only to a surviving spouse.he designated no beneficiary. i am negotiating for the estate to settle his outstanding debts, which i believe i can achieve but will drain the estate of all its value. the almost ex-spouse at first agreed to spilt the insurance proceeds with myself and my sister, but now is refusing to do so. she has not yet made application for the benefits. my sister and i do not believe it is fair that decedents second wife recieve all of proceeds of the insurance, esp. in light of the following:
-she moved from the marital home over a year before filing for divorce, and filed the same month that my father fell ill and needed assisted living.
-she contributed nothing to his care during this time and up until his death
-the action for divorce was not contested yet it took abnormally long for the courts to rule -dilatory?
-she is unwilling to assume responsibility for her husband's debts
we have an attorney who has advised to seek a nunc pro tune to have the divorce decreed and benefits spilt between my sister and i. is this probable, and is there any other steps advisable in conjunction or in lieu of?

 

[ALawyer]

You have an attorney and as it sounds as if the attorney is giving you good advice, I have nothing to add. As the process is so localized in NJ, only another NJ lawyer can give you a second opinion on the possibility of the divorce being granted to predate the death. That could solve the problem, but it may also depend on their separation agreement or decree.

 

[advisor10]

MAY 23, 2001

DEAR JH3:

(1) WHO WAS NAMED AS BENEFICIARY OF THE $60K LIFE INSURANCE POLICY?

Were you aware that this money will go directly to the beneficiary (or made payable to the estate if there was no beneficiary listed)? In any state, this money would be considered a "non-probate asset" that DOES NOT EVEN NEED TO BE REPORTED TO THE PROBATE COURT. The beneficiary can spend this money any way he/she chooses (but may want to check and see if there will be any state or federal income tax consequences).


This aspect changes the situation considerably, doesn't it?


(2) WILL THIS SECOND WIFE BE RECEIVING ANY TYPE OF ALIMONY OR OTHER FINANCIAL SETTLEMENT FROM THE DIVORCE DECREE?

I agree with you that she shouldn't get the entire proceeds from the life insurance money. This surviving spouse, however, deserves some consideration because she is also a grieving widow and at least the relationship was good and caring in the first period of the marriage (neither party could have anticipated that a divorce would eventually occur). She is lucky to be getting the $567 per month (if she eventually decides to file for it), but it would be merciful for the family or the estate to give her an additional amount of a few thousand dollars for her future support/living expenses.

Additionally, SHE DID YOU A HUGE FAVOR by declining the administration of the estate and letting you substitute in her place (because it could have been her who was deciding how the entire estate should be divided).

(Technically, you cannot refer to yourself as an "executor" when an intestate proceeding applies--the correct term is "personal representative" or "personal administrator", since the term "executor" can only be used when a will is being probated, but it means the same thing.)


(3) CONSULT WITH A PROBATE ATTORNEY ABOUT INTESTATE DIVISION OF THE ESTATE.

If you have not already done so, you really need to talk to an attorney about how this estate will be divided according to intestate law.

While consulting a reference book, I found the following notation:

(NEW JERSEY) SPOUSE'S RIGHT TO PROPERTY, REGARDLESS OF WHETHER OR NOT THERE WAS A WILL: The surviving spouse is entitled to 1/3 of the "augmented estate" of the deceased spouse. In general, the augmented estate includes both the property that passes under the will and any other property that passes by non-will transfers, such as under the terms of a living trust or a joint tenancy. (SECTION 3B:8-1)

LAWS OF INTESTATE SUCCESSION (DISTRIBUTION IF NO WILL):
SPOUSE AND CHILDREN OF SPOUSE SURVIVING: $50,000 and 1/2 of balance to spouse and 1/2 of balance to children.
CHILDREN, BUT NO SPOUSE SURVIVING: All goes to the children.
(SECTIONS 3B:5-3 & 5-4)

An important factor here may be whether or not the second wife would technically be considered a spouse at the time of the decedent's death (which is something you have already taken into consideration, since you mentioned the "nonc pro tune" motion.).

It's great that you are negotiating for the estate to settle his outstanding debts, because any amount of debts that remain unpaid will probably be written off as uncollectible after about a year. If you can't afford to pay off the entire $80,000, then try to pay as much of it as you can (half or more).

I somehow get the feeling that this second wife has been advised by an attorney and may possibly know how much of the $26,000 estate she may be entitled to.

As administrator/personal representative, you will be entitled to a fee of 5%, which is $1,300.00.

You may want to find out in advance from an attorney whether or not the judge will be reviewing the manner in which you will be distributing this estate (before it is closed), so that you can know ahead of time what the intestate probate law guidelines are so you can be reasonably sure that you have distributed the funds correctly and legally.

SINCERELY,

[email protected]

 

[jh-3]

knort: thanks for you input.

interestingly, no beneficiary was designated, but the insurance co. is taking the position that the surviving spouse becomes the beneficiary in this case, not the estate. we have disputed this, but have not heard back.

we offered in good faith to the almost ex spouse a spilt of the insurance proceeds, one-third each, and for her to recieve the pension,which if she lives to her median life expectancy, will total over $170,000. she agreed verbally to this arrangement for over 9 months. last month, when i presented her with a contract covering this deal, she ceased returning phone calls. it was then we decided to proceed with our leal action. we agree she is entitled to something--just not eveything! it appears she has become greedy as come close to wrapping the situation up.

the majority of the estate will go to settle his litigation,legal fees, and funeral expense reimbursement.(i paid for everything, and am entitled to be paid back.)
she understands this so i doubt she is much interested in getting money from the estate, although we are amenable to a three way spilt of whatever is left after settling his affairs.

if the nunc pro tune is unsuccessful, what other avenues do i have to compel a fair and reasonable spilt?