When the owner of real property dies, title to that property must pass to another owner. In the state of New Jersey, the way title is transferred at death depends entirely on how the deed is titled. This should be determined by reviewing a copy of the deed, available at the county recorder’s office.
New Jersey Transfer on Death Laws
Most states now recognize "transfer on death (TOD)" designations, also called "payable-on-death (POD)" designations. These are documents that a property owner can complete during their lifetime that transfers certain assets automatically on their death to the named beneficiary. This is a favorite estate planning tool for avoiding probate, as the property is transferred outside of a probate proceeding.
New Jersey recognizes payable-on-death designations for assets such as bank accounts, certificates of deposit and investment accounts. Many states permit these types of transfers for real estate as well, but New Jersey does not. That means that most real property must pass through probate unless the title has been transferred to a living trust or is held jointly with right of survivorship.
Living Trusts in New Jersey
A living trust is sometimes called an inter vivos trust. Under the New Jersey Uniform Trust Code, this trust is created during the lifetime of the person making it. The basic idea of a living trust is to avoid probate by causing the assets in the trust to pass outside of a court proceeding to named beneficiaries upon the maker's death.
While this is essentially a similar procedure as a will, property left under a will becomes part of the deceased's probate estate. On the other hand, living trust assets pass to loved ones without going through probate.
Revocable and Irrevocable Trusts
A New Jersey living trust can be revocable or irrevocable. Someone creating a revocable trust (the trustor) can name themselves the trustee and retain control of the trust and its assets as long as they are alive. A successor trustee is also named in the trust; they step in when the maker dies and distribute the property to beneficiaries.
If real estate is part of the trust property, title passes to the successor trustee when the maker dies, and they pass title to the beneficiaries named in the trust. This type of living trust can be altered or revoked at any time while the maker is alive. An irrevocable living trust cannot be revoked or modified after it is signed.
Jointly Held Real Estate
Generally, real estate held by a deceased person will pass to beneficiaries named in a valid will, if one exists. If no will exists, the property passes to intestate heirs under the New Jersey intestacy statute. In both cases, the property must pass through probate.
However, certain assets transfer outside of probate, regardless of whether the decedent left a valid will. This includes property held by two or more people in a deed with a survivorship interest. No new deed is required, although surviving owners may still want one.
In New Jersey, spouses can hold title to real property as tenants by the entirety which includes the right of survivorship. When the first spouse dies, title passes automatically to the surviving spouse by process of law without going through probate. The same is true in a joint tenancy with right of survivorship in New Jersey. When one owner of the property dies, their title passes automatically to the remaining joint tenants.
Real Estate Transfer Under a Will
New Jersey laws provide that when a decedent dies leaving real and personal property, it passes to the beneficiaries named in the will or, in the absence of a valid will, to close family members under New Jersey intestate laws.
To make a will in New Jersey, a person must be at least 18 years old and of sound mind. The will must be signed by two witnesses "within a reasonable time" after the person making the will signs it.
New Jersey permits interested witnesses, that is, witnesses who stand to inherit under the will, though it is usually a better idea to use disinterested witnesses. New Jersey also allows a holographic will without witness signatures, but it must be entirely written by hand by the maker.
New Jersey Probate Process
Generally the will names an executor who will pilot the estate through the probate process. The executor will prepare new deeds to transfer any real property from the estate to the appropriate beneficiaries according to the terms of the will as long as there are sufficient assets to pay any creditors.
If there are insufficient assets to pay the debts of the estate, the real property may sometimes need to be sold to pay income and estate taxes and debts. Note that a will may also leave a property to a trust, in which case a deed would be prepared by the estate executor to the trustee of the trust.
Real Estate Transfer When No Last Will and Testament
If the decedent does not leave a valid will, their estate is termed intestate. That means that the New Jersey intestacy statutes determine the family members who will inherit the ownership of the property. Generally the surviving spouse and children are first in line to inherit, followed by the decedent's parents and siblings. But the exact disposition depends on what relatives and next of kin survived the decedent.
If children survive but there is no surviving spouse, the children inherit the property in equal shares. A grandchild only inherits if that grandchild's parent (the child of the decedent) is not alive to receive their share. If there is a surviving spouse, but no surviving children or parents, the spouse takes the entire estate, including the real property.
If the deceased leaves a surviving spouse and children from that union, the spouse inherits everything. If the deceased leaves children from another union, the surviving spouse takes the first 25 percent of the estate (as long as it is between $50,000 and $200,000) and half of the remaining balance, while the children split the other half of the balance. The law specifies who gets what in many other scenarios as well.
Naming an Administrator if No Will
How is title transferred? Again, the probate court appoints someone to shepherd the estate through probate. When there is no will, the person is termed an “administrator,” and they are given the same responsibilities as an executor in a probate proceeding.
Under New Jersey law, the surviving spouse or domestic partner is first in line for the job of administrator. The administrator is responsible for determining intestate heirs and distributing the property, including transferring title to the real estate.
- Consult with a legal professional.
Teo Spengler earned a JD from U.C. Berkeley Law School. As an Assistant Attorney General in Juneau, she practiced before the Alaska Supreme Court and the U.S. Supreme Court before opening a plaintiff's personal injury practice in San Francisco. She holds both an MA and an MFA in English/writing and enjoys writing legal blogs and articles. Her work has appeared in numerous online publications including USA Today, Legal Zoom, eHow Business, Livestrong, SF Gate, Go Banking Rates, Arizona Central, Houston Chronicle, Navy Federal Credit Union, Pearson, Quicken.com, TurboTax.com, and numerous attorney websites. Spengler splits her time between the French Basque Country and Northern California.