When a loved one passes away, often their estate must pass through a process called probate. Probate is the procedure in which the estate of the person who died (decedent) is divided and distributed among his heirs. Probate is generally held in the county in which the decedent was domiciled. First, it must be determined if the decedent died with a will.
If the decedent does have a will, then he or she is deemed to have died “testate.” The will generally names who the executor of the estate should be, and how the property should be divided. The will must be presented to the clerk of superior court, and the named executor should apply for “letters testamentary,” which gives him or her power to carry out the responsibilities of the executor.
If the decedent died without a will, then he or she is deemed to have died “intestate.” In this circumstance, the decedent’s estate would pass by a process called intestate succession, which is a series of laws that determine how the estate should be divided. A person, usually a close family member, would apply for “letters of administration,” which would give him or her power to carry out the responsibilities of an administrator. An administrator’s responsibility is to divide the property pursuant to the intestate succession act.
An executor and administrator are also known as a “personal representative.” The application to become a personal representative calls for a preliminary inventory of the decedent’s assets on the date of death. This calls for a list of the decedent’s real estate, bank accounts, vehicles and personal property that should pass through probate, and their approximate value.
Once approved, the personal representative must submit an oath to carry out their duties honestly. The personal representative’s duties include collecting assets, paying claims against the estate, and distributing the estate in a timely and orderly fashion. Sometimes a bond is required from the personal representative. Generally, bonds are waived in wills, so an executor may not be required to post one. However, an administrator is required to furnish a bond unless he is the only heir, or unless all heirs are 18 years or older and have filed a waiver of bond.
After letters are issued to the personal representative, he or she must advertise for creditor’s claims against the estate in a newspaper published in the county where the estate is being administered. The ad must be published once a week for four consecutive weeks, and must state a date at least three months from the first publication in which the creditors must notify the personal representative of the debt owed. In addition, the personal representative must send a notice to all creditors who are actually known or can be discovered after reasonable investigation. This must be done within 75 days of the issuance of the letters. However, if the personal representative already recognizes the creditor’s claim to be valid, he does not need to mail the notice. Once these things are done, the personal representative must file an affidavit of notice to creditors with the clerk’s office. If the estate is insufficient to pay all of the creditor’s claims, the personal representative should pay in full those creditors which have top priority, and then distribute the remaining money proportionally among the others, pursuant to N.C. Gen. Stat. § 28A-19-6. If creditors don’t make claims within the time limit proposed in the publication, then their claims are barred.
Three months after the letters are issued, the personal representative must file an inventory with the clerk’s office. This inventory gives descriptions and values of the descendent’s property that should pass through probate. Items associated with joint accounts, such as signature cards and deposit contracts, should be attached to the inventory. If property is discovered after the inventory is filed, then a supplementary inventory must be filed. If the estate incurs any income, or sells any assets, these must be reported on the next accounting.
The personal representative must file the decedent’s income tax return. If no estate tax is due, then an Estate Tax Certification must be filed with the clerk.
After paying the valid claims on the estate, the estate’s taxes, and costs of administration, the personal representative must distribute the assets of the estate either according to the will, or according to the intestate succession act (Chapter 29 of the NC General Statutes). Once a distribution is made to a beneficiary, the personal representative should obtain a receipt.
A final accounting must be filed with the clerk within one year of qualifying to serve as personal representative unless he or she got an extension from the clerk. If an extension was granted, the personal representative must file an annual accounting instead. All accounting must be accompanied by cancelled checks or other proof (such as bank statements) for all distributions and disbursements of the estate. The accounting must show the estate’s property values, nature of investments, gains and losses from sale of property, payments, charges, distributions, and the property on hand, if any.
If 30 days from the decedent’s death it is determined that the value of the decedent’s personal property, less liens and encumbrances does not exceed $20,000 (or $30,000 if the surviving spouse is the sole heir), regardless the value of any real property, then a simplified probate procedure may be followed.
First, an executor, heir, or creditor of the estate may file an affidavit for collection, requesting authorization to administer the estate. Once the person is authorized, he or she may distribute the decedent’s personal property in the order provided in N.C. Gen. Stat. § 28A-25-3. After the distribution has been made, the closing affidavit must be filed with the clerk showing the collection, disbursement, and distribution of the personal property. This should be filed within 90 days of the filing of the qualifying affidavit.
If the surviving spouse of a descendent is the sole heir or devisee of the descendent, he or she can petition the court for an order of summary administration. This allows the surviving spouse to proceed with the collection and distribution of the estate without the formalities of regular administration. By obtaining the order, the spouse assumes all liabilities of the descendent to the extent of the value of the property received. If the sale of the decedent’s real estate by the surviving spouse is necessary or desirable, a formal administration is probably necessary.
According to Wake County’s laws, probate can be simple, but it can also be complicated and lengthy. If you need help with the probate of a loved one’s estate, contact our Raleigh office.
If you want to learn how to make the probate process simple for your loved ones when you pass, then contact us to discuss ways to minimize or eliminate probate.
The Law Corner Attorneys help people all over Wake County to include the following areas: Knightdale, Wake Forest, Raleigh, Morrisville, Apex, Wendell, Zebulon, New Hope, Cary, Rolesville, Fuquay-Varina, Holly Springs, and Garner.