It is a graduated rate. See page 10 of the NJ Estate Tax Return (Go to NJ Taxation website, Search for Form IT-Estate). It ranges from 4.8% to 16% depending on the amount of the estate.
I certainly do not know enough about your situation to give a true and complete answer but if on your NJ estate tax return the taxable estate (after deductions, etc.) is 1,000,000 (this also assumes a single person no spouse or surviving spouse's taxable estate) the tax would be $33,200.
They can sue you. The question is can they win. Let the insurance company handle it, but if you want independent advice seek out an attorney who has defended lawsuits like this (probably one who is an "insurance defense" attorney)
I agree that every living human being in this country (and others) should have basic estate planning documents. Some situations are more complex than others, but very basic documents are worth the investment.
Well, you can't stop her from committing fraud. About all you can do is warn her and perhaps alert the IRS. If the kids ss# show up on your return and hers eventually the IRS will cross-match the returns and investigate. I would try to file your return as soon as you possibly can and make sure it is done right by using a CPA. This will be investigated so keep your documentation and paper trail.
If all formalities are followed under state law it should be, but you should still retain the services of an attorney to explain the details to you and no one can promise that a downloaded form will be honored when needed.
You should seek the advice of a probate attorney. If the house is joint tenants with right of survivorship, then the house would be owned now by the surviving joint tenant (you, from your description). If you can continue to pay the mortgage you should not have a problem (if there is a mortgage), if you cannot pay the mortgage perhaps you can refinance it. The if house is "Tenants in Common" the answer is different.
As for his debts, the debts of his estate remain that and would not...
The other attorneys are correct. You can't say: you made an honest mistake and now we have you by the you-know-whats and stick it to them. Also, you may have signed a release and refunding bond/agreement which obligated you to pay back any erroneous distribution.
No. Not unless the will(s) say so. Once the assets are in the hands of the surviving spouse (and don't forget about non-probate assets (those assets not controlled by the will such as IRAs) unless there is some type of restriction (such as a QTIP trust) the person who owns it can give it away at death. Often times couples with previous marriage/previous children plan for these issues but they need to see an attorney. As you are obviously concerned about dad being older and dying first, he...