Step 1 - The executor should get an employee identification number (EIN) for the Estate as soon as possible. This is done by submitting Form SS-4 to the Internal Revenue Service. We will be happy to help you apply electronically for this critical information.

The deceased’s accounts will normally be frozen shortly after death if it is not a joint or POD account and no funds can be released without the EIN.

  • Step 2 – Contact the Social Security Administration and any other financial institution where the deceased was receiving pension, retirement or IRA distributions and inform them of the deceased’s death and ask them to stop distributions immediately. Any distribution made after death will need to be refunded.

  • Step 3 – Open an estate checking account which will require an EIN, death certificate, letters testamentary and Will.

  • Step 4 – Contact all financial institutions where the deceased had accounts and ask them what information they require to release or transfer the funds to the estate (each institution is different). Ask if they want originals or if copies will do. They will normally want a copy of the death certificate, letters testamentary and possibly the Will. They will also require a completed Form L-8, Affidavit and Self-Executing Waiver (copy attached), which we will be happy to complete for you. We recommend you go in person to local institutions and by mail for National institutions that don’t have a local office.

After supplying the above information, the financial institution will either release all or half of the funds to the Estate depending on whether it is a taxable estate or not.

  • Step 5 – Deposit the funds in the Estate account and use it for estate expenses and ultimately to distribute to the beneficiaries.

  • Step 6 – Notify all beneficiaries who will receive an inheritance under the Will and provide a copy of Will if they request it. Also, explain the process, timing and approximately what they will be receiving and keep them informed.

  • Step 7 – After all expenses have been paid and all tax returns filed and waivers received, distribute the remaining assets to close out the Estate.

Probating a Will

  • The Executor needs to take the original Will and a certified death certificate to the Surrogates office in the County in which the deceased resided.

  • A list of the full names and addresses of the closest surviving next of kin should be available.

  • Some counties (Morris) require the completion of a Probate Form which includes the name and address of the decedent, the executors name and address, the names and addresses of the witnesses to the Will and the name and addresses of the heirs at law and next of kin. This form can be submitted electronically or via email.

  • In some counties you simply appear at the Surrogates Office during business hours (Union, Essex) and some counties (Morris) require an appointment. Morris calls to set up an appointment after you submit the Probate form.

  • Visit the website of the County Surrogate’s Office where you will be probating the Will for location, business hours, appointments and what to bring.

  • Make sure you have cash or a check for probate fees which averages $100 - $200. The check does not have to be an estate check but can also be a personal check.

  • At the conclusion of your visit Short Form Letters Testamentary will be provided to you authorizing you as Executor to act on behalf of the Estate.

  • You will be asked how many Letters Testamentary you will need. We recommend one for each financial account of the deceased plus 1 or 2 extras.

Preparing the Estate Return (Form 706)

  • After the Will has been probated and the Estate account has been established and the financial institutions have been notified of the deceased’s death, it is time to begin gathering the information for the preparation of the Estate tax return.

  • If the deceased is a New Jersey resident, a New Jersey Estate tax return will be required if the deceased had more than $675,000 of net assets.

  • A Federal Estate tax return may be required even if the net assets of the Estate are less than $5,450,000 if there is a surviving spouse and portability of the deceased spouse’s estate tax exemption is desired.

  • The Estate tax return is a snapshot of the deceased’s assets and liabilities as of date of death (DOD). As such, the fair market value of all assets must be determined as of DOD.

  • Request brokerage firms and banks to provide you with the fair market value of all accounts as of DOD.

  • You will need to get a simple appraisal for all residential real estate owned by the deceased.

  • A more significant appraisal of all closely held businesses and rental real estate will be required.

  • All liabilities of the deceased will need to be determined. These will not only include mortgages and loans but all outstanding credit card bills, phone bills, utility bills etc. owed by the deceased as of DOD.

  • Also expenses incurred after DOD but resulting from the death will need to be captured. These include funeral and burial expenses, repast expense, fees for letters testamentary, and other estate administrative expenses. Also, attorney and accountant fees related to the administration of the estate will be needed.

  • Once this information has been gathered, the Executor should meet with the return preparer to answer any questions they may have and to determine what is missing.

  • The return preparer will also need a copy of the Will, death certificate, letters testamentary, prior gift tax returns and the previous income tax return.

Preparing the Income Tax Return of the Estate (Form 1041)

  • Besides the Estate tax return, an income tax return may be required for the Estate.

  • This return captures the income and expenses of the Estate after death up until all assets have been distributed and the Estate is closed.

  • The information required will be 1099’s for interest, dividends, capital gains, rental income, expenses, if any, IRA distributions and all other income from the Estate assets.

  • All expenses related to the administration of the Estate and the maintenance of the assets of the Estate must also be provided.

If you have any questions, please contact: Kenneth G. Hydock, Esq., CPA, PFS, AEP


Member in Charge – Trust & Estate Practice Group