As the Administrator Can I Share The Estate With Non-Beneficiaries

[HapHope]

Jurisdiction

New Jersey

My first post, here we go, my several months ago, my wife passed away. She did not leave a will for the distribution of her properties/assets etc. I registered with the Mercer County Surrogates Office. After filing all papers and paying fees I was sent the forms that authorized me to be the Administrator of the Estate. The beneficiaries are myself, her two sons from a previous marriage, and her sister's daughter who she raised from youth. The problem is that I have no documentation to establish if her sister's daughter was legally adopted or raised under the conditions of a "guardian" relationship. It's my understanding that legal guardianship expires at the age of eight-teen (18) in New Jersey. If she is legally adopted, as the administrator of the estate I have no legal documents to support that position. I advised her that I could not consider her a legal beneficiary of the estate. I requested that she provide me with the correct documents that I may put them into the estate records.
I was told that I can not give shares of the estate to anyone who is not a beneficiary of the estate. Today I received an email from the person in question with emphasis on the following statement:
"Equitable Adoption (Constructive Adoption); GN 00306.225
"Equitable adoption is established when it is shown that the decedent agreed to adopt the
child, the natural parent acted in reliance, and the child was treated as a child of the decedent,
but there was no legal adoption."
How do I know if this would apply to this situation. This still does not give me any documentation to base my actions on. I have no problem with her being a beneficiary, I just need to cover my back, for later down the road, if one of the other parties complain.
I am open to all suggestions and thank you for allowing me to take up your time and wisdom. - God bless

 

[adjusterjack]

Condolences.

Your wife died intestate (without a will). Assets you own jointly (with right of survivorship - like a house or bank accounts) go to you. Assets owned by her separately get distributed under NJ's law of intestate succession.

Read the statutes Section 3B:5-1 through 3B:5-16.

2019 New Jersey Revised Statutes :: Title 3B - Administration of Estates--Decedents and Others

Sorry to have to say this but, if you don't understand those laws, you'll have to get an attorney to make sure you get it right.

 

[HapHope]

Thank you for your help, I will read the provided material and do what is necessary to find what is applicable to my situation

 

[Tax Counsel]

Today I received an email from the person in question with emphasis on the following statement:
"Equitable Adoption (Constructive Adoption); GN 00306.225

Here's the problem with that. GN 00306.225 is a citation to a portion of the Social Security Program Operations Manual Systems that discusses equitable adoption for purposes of applying Social Security programs. It has nothing to do with distribution of decedent estates. Since your wife did not have a will, the distribution of her estate is by intestate succession. Under the rules for intestate succession in NJ her estate would be split between you and her children, assuming all her children are still living. Her niece would not be included in the distribution of the estate since your wife had a surviving spouse and children unless your wife had adopted the niece. It does not sound like your wife made an official adoption of her niece.

Equitable adoption is recognized in NJ. However, simply the fact that your wife raised her niece is not enough to support a claim of equitable adoption. Rather, her niece would generally need to show that there was an agreement between your wife and her niece's mother that your wife would actually adopt — not just raise — her niece. And if the agreement is oral, that will be difficult to prove as the proof of the oral agreement needs to be very clear, or "exacting" as the NJ courts put it. Specifically, the Appellate Division of the NJ Superior Court stated:

To find an equitable adoption has occurred, courts generally require proof of an agreement to adopt. For example, in Burdick, in which a stepson sought enforcement of an alleged oral adoption agreement to allow him to inherit from his stepfather's estate, the court explained the necessity for exacting proof to enforce an alleged oral agreement to adopt a child. Supra, 113 N.J. Eq. 591.

While a court of equity—when to do otherwise would result in palpable injustice—should unhesitatingly decree an adoption and its incidental and resultant rights of inheritance, where there has been no formal statutory adoption effected, it should, however, always require that the adoption agreement be first established by proof of the type and character required in such cases, with respect to the production and sufficiency of which it should be rigid and exacting.

Sight, however, must not be lost of the fact that parol agreements of that character are not looked upon with favor by the courts. Such is but the natural result of the fact that they are easily fabricated and most difficult to disprove, since they most usually are not brought into controversy until after the grim reaper has intervened and forever hushed the voice of the alleged promisor .... It is because of these facts that the courts have come to regard this class of oral agreements with grave suspicion, have subjected them to close scrutiny and have allowed them to stand only when established by evidence that is clear, cogent and convincing, leaving no doubt with respect to their actual making and existence. [Id. at 597–98 (citations omitted).]

Because the stepson in Burdick did not present "direct cogent evidence" that the decedent specifically agreed to adopt him, the court found the evidence to be "manifestly deficient" and falling far short from establishing the stepfather had made a specific agreement to adopt the stepson. Id. at 599, 602. Accordingly, the court ruled an equitable adoption did not exist.​

Matter of Estate of Acerra, No. A-1955-15T1, 2017 WL 6048117, at *8–9 (N.J. Super. Ct. App. Div. Dec. 7, 2017)

So has the niece provided any evidence that her mother and your wife entered into an agreement in which your wife would adopt your niece? If so, what was that evidence?

As the administrator of the estate you have a fiduciary duty to properly distribute the assets of the estate to the beneficiaries after payment of valid estate debts. Before you pay out anything to the niece I would strongly advise you to consult a probate attorney for advice on whether the niece has a strong enough claim to equitable adoption.

 

[HapHope]

Thank you so much for your reply. I will use it to help explain to my niece, the challenge we have ahead of us. She is threatening to have me removed as the administrator, based on me not recognizing her as a beneficiary at this time, and that's the least of my concerns. This is still a difficult time for us and I understand how she feels. Thank you again.

 

[zddoodah]

The beneficiaries are myself, her two sons from a previous marriage, and her sister's daughter who she raised from youth.

Her niece is not an heir to her estate (unless, as you noted, your wife adopted her niece). Under NJ law, when a person dies without a will and is survived by a spouse and children who are not also children of the surviving spouse, the surviving spouse gets 25% of the net value of the estate (but not less than $50k nor more than $200k), plus have of the balance, and the children split everything else. Any surviving parents, siblings and issue of siblings do not inherit.

How do I know if this would apply to this situation.

You retain legal counsel to advise you about it and, if counsel so advises, you file a motion to let the court decide the issue.

I have no problem with her being a beneficiary

It doesn't affect you. It does, however, affect your wife's children. If the niece was adopted, then the children would split the balance three ways. If the niece wasn't adopted, then the children would split the balance two ways. It's obviously impossible to know how significant that is without knowing the value of the estate, but you obviously should tell the children what's going on and take their temperature on the issue.

She is threatening to have me removed as the administrator, based on me not recognizing her as a beneficiary at this time

Is she represented by counsel? If not, she likely doesn't have any better grasp on the relevant law and procedural rules than you do, but it would be very foolish for you not to retain legal counsel in light of this threat.

 

[HapHope]

As the administrator, if I need to hire legal counsel, is the cost charged to me personally or is it a expense of the estate? All of the children know everything. I hide nothing from them and they have mixed feelings. Once again Thank you one and all, so very much during this period of my life.

 

[Zigner]

As the administrator, if I need to hire legal counsel, is the cost charged to me personally or is it a expense of the estate? All of the children know everything. I hide nothing from them and they have mixed feelings. Once again Thank you one and all, so very much during this period of my life.

The estate would be hiring the attorney. Of course, if you are successful, then 33% of that comes out of your proceeds anyway...

 

[Tax Counsel]

As the administrator, if I need to hire legal counsel, is the cost charged to me personally or is it a expense of the estate?

It is an expense of the estate. But as Zigner notes, the more expenses the estate has the less there is in the pot to distribute to beneficiaries, including yourself, at the end. That said, the court would likely simply dismiss her complaint or rule against her in summary judgment unless she has something to show to claim that there had been an actual agreement to adopt rather than just an agreement that your wife would raise her. Without some evidence of such an agreement, she appears to have nothing to stand on here.

 

[zddoodah]

As the administrator, if I need to hire legal counsel, is the cost charged to me personally or is it a expense of the estate?

It is payable from estate assets (or you can pay it yourself and then reimburse yourself).

All of the children know everything. I hide nothing from them and they have mixed feelings.

If the actual children were 100% on board with sharing, then this could probably be done by written agreement, but without that, you would be a fool not to require a court ruling before including the niece/allegedly-adopted child.

 

[HapHope]

I wanted to come up for air, and once again tell everyone, THANK YOU so much for your time and wisdom. This is still keeping me busy but everyone here truly deserves a big THANK YOU. Don't want to make a mistake with the "Like/Unlike" button, I just stay hands off for now. God Bless

 

[HapHope]

In a meeting on 02/25/21, she stated that there was no adoption, because of the visitation restrictions would be imposed on her birth mother. So there was some agreement to allow her aunt to raise her giving her mother visitation rights. She was explaining it to another member at the meeting and I heard it. Then we offer to share a portion with her, but she would have sign off on any claims to the estate (if she had any) but she refused. We concluded that the burden of proof is on her and it must be settled in court if she wants to pursue it.

 

[Disabled Vet]

In a meeting on 02/25/21, she stated that there was no adoption, because of the visitation restrictions would be imposed on her birth mother. So there was some agreement to allow her aunt to raise her giving her mother visitation rights. She was explaining it to another member at the meeting and I heard it. Then we offer to share a portion with her, but she would have sign off on any claims to the estate (if she had any) but she refused. We concluded that the burden of proof is on her and it must be settled in court if she wants to pursue it.

Sounds like it is time to hire a lawyer.... Have the lawyer send her a letter stating that she doesn't have a leg to stand on. Yet, you guys are willing to give her X amount providing she signs off on the rest of the estate.

 

[HapHope]

Thanks once again, we feel we are close to being able to close the estate and move on since she rejected the offer. Can I settle the estate affairs and close it out or is there a given time window I must wait for her to decide what she wants to do, something like a statute of limitations before I can officially divide the shares and move on.

 

[army judge]

Thanks once again, we feel we are close to being able to close the estate and move on since she rejected the offer. Can I settle the estate affairs and close it out or is there a given time window I must wait for her to decide what she wants to do, something like a statute of limitations before I can officially divide the shares and move on.

You can do almost anything you decide to do, even IGNORE the admonitions/suggestions to HIRE a lawyer to advise you.

 

[HapHope]

Well it's not that I want to ignore the suggestion of hiring a lawyer, I had been paying for L..Sheild, until I just found out there is a limit of use and I have maxing out. Before I spend any more money I"m trying to find out as much as possible.

 

[adjusterjack]

Equitable adoption is recognized in NJ. However, simply the fact that your wife raised her niece is not enough to support a claim of equitable adoption. Rather, her niece would generally need to show that there was an agreement between your wife and her niece's mother that your wife would actually adopt — not just raise — her niece.

That is certainly the conclusion in Acerra. However in the Matter of Estate of Castellano, 196 A. 3d 101 - NJ: Appellate Div. 2018 the court noted:

And, in Ashman v. Madigan, 40 N.J. Super. 147, 149-50, 122 A.2d 382 (Ch. Div. 1956), a chancery judge applied these same principles in finding the existence of an agreement to adopt, even in the absence of "direct evidence of such an agreement," because of the "clear and satisfactory proof" of a fifty-year parent-child relationship as well as other circumstances that permitted an "inference" of "an agreement by the decedent to adopt the plaintiff."

Matter of Estate of Castellano, 196 A. 3d 101 - NJ: Appellate Div. 2018 - Google Scholar

The ongoing parent-child relationship of the deceased and her niece might "infer" an equitable adoption even in the absence of any "direct evidence of such an agreement."

HapHope would be wise to examine the parent/child relationship more closely rather than dismiss it, especially since litigation on the issue could be protracted and expensive.

 

[Tax Counsel]

That is certainly the conclusion in Acerra. However in the Matter of Estate of Castellano, 196 A. 3d 101 - NJ: Appellate Div. 2018 the court noted:

And, in Ashman v. Madigan, 40 N.J. Super. 147, 149-50, 122 A.2d 382 (Ch. Div. 1956), a chancery judge applied these same principles in finding the existence of an agreement to adopt, even in the absence of "direct evidence of such an agreement," because of the "clear and satisfactory proof" of a fifty-year parent-child relationship as well as other circumstances that permitted an "inference" of "an agreement by the decedent to adopt the plaintiff."

Matter of Estate of Castellano, 196 A. 3d 101 - NJ: Appellate Div. 2018 - Google Scholar

The ongoing parent-child relationship of the deceased and her niece might "infer" an equitable adoption even in the absence of any "direct evidence of such an agreement."

Madigan is an outlier from 1956, and no cases since then have picked up on that idea. The court in the case you cited notes in the same paragraph that "Other courts later applying this principle similarly emphasized the critical need for an agreement to adopt." That need for agreement runs through pretty much all the cases on the subject, Madigan notwithstanding, and even that case tried to couch the outcome as one of "agreement" though the logic of it really doesn't hold up, IMO. I think unlikely that the same result would obtain if it were brought today, though anything is possible.

Certainly if the niece files a contest on the matter the OP needs to get an attorney. But until then, the OP can tell the niece she's out of luck.

 

[Tax Counsel]

Thanks once again, we feel we are close to being able to close the estate and move on since she rejected the offer. Can I settle the estate affairs and close it out or is there a given time window I must wait for her to decide what she wants to do, something like a statute of limitations before I can officially divide the shares and move on.

You'd be wise to wait until the time for filing contests to the estate before distributing assets to the beneficiaries. That time is usually pretty short as states recognize the need for the estate to get settled in a reasonable period of time. Ask your lawyer how long she's still got left and go from there.

 

[HapHope]

Thank you one and all, I am considering every option given.