If you are the executor or administrator of a family member or friend’s estate, you assume a legal responsibility to protect the value of their inheritance and pay any remaining debts to creditors.
Opening an estate account is a crucial part of protecting the decedent’s estate, as our knowledgeable legal team could explain. An estate account is an arrangement that safeguards the decedent’s assets while you handle estate taxes and other probate requirements. A dedicated probate attorney could help with understanding these arrangements and opening an estate account for probate in New Jersey.
What Is an Estate Account?
An executor creates an estate account to hold the decedent’s assets, which are used to pay final expenses, estate taxes, court fees for probate matters, and any outstanding credit card bills, car loans, or mortgages. Executors can also use the estate account to pay any final income taxes the decedent owes or convert assets to cash and safeguard those funds while probate proceeds.
Simpler estates may only require an estate checking account, but more complex estates may need several different arrangements, including an estate investment account to manage stocks, bonds, IRAs, and other investments. An experienced New Jersey lawyer could help with determining the best type of accounts to create for an estate during the probate process.
Estate Accounts are Records of the Executor’s Financial Transactions
Another important aspect of estate accounts is that they serve as financial records of all transactions the executor initiates during probate. These accounts are especially helpful if beneficiaries fight about the assets they deserve or accuse the executor of managing the estate inadequately. Our attorneys could further explain the value of an estate account as a record of financial transaction.
Steps to Take Before Opening an Estate Account
Before opening an estate account during probate, an executor needs to accomplish a few things. To begin, they must:
- Get copies of the death certificate
- File for probate
- Apply for a Taxpayer Identification number
- Open the estate account at a bank or credit union
After opening the account, the executor maintains the estate until probate is completed, and the remaining assets can be distributed according to the will. A proactive attorney in New Jersey could help an executor collect the necessary documents and complete the early stages of opening an estate account.
Acquiring a Death Certificate
Most creditors will require a copy of the decedent’s death certificate to confirm this individual has passed away. Additionally, the bank that the executor chooses to host the estate account will need a copy of this certificate.
Filing for Probate
Before opening an estate account, an executor or administrator must file for probate. An executor appointed in the decedent’s will can file a petition at the relevant court to be formally recognized as the legal representative handling probate.
Getting an Employer Identification Number to File Estate Taxes
Much like a corporation, an estate is a taxable entity. Therefore, during probate, an executor needs to acquire a unique employer identification number (EIN) to file taxes. The executor files an IRS Form SS-4 on the IRS website to obtain an EIN.
After completing the steps above, an executor can proceed to open the estate account at most financial institutions. An experienced lawyer could assist with any stage of this crucial process.
Call Our Team About Opening an Estate Account for Probate in New Jersey
If you are named the executor in a decedent’s will or a judge appoints you as an administrator when someone dies intestate, your responsibilities can seem overwhelming. You must meet filing deadlines, deal with beneficiaries who may scrutinize what you do, pay bills and taxes, and distribute assets.
Thankfully, our legal team is here to help. Our tenacious attorneys handle all aspects of probate. Let us walk you through each step, from getting the documentation you need, opening an estate account for probate in New Jersey, maintaining the estate, disbursing assets, and, finally, fulfilling your duties and concluding probate. Reach out today to get started.