The loss of a parent, at any age, is not an easy thing to go through. If you are an adult child at the time, your grief may need to be reined in if you are also responsible for administering your mother’s estate. One of the first decisions you must make is whether your mother’s estate requires probate. Because of the complex and unique nature of probate, you should consult with an attorney in person. At Clarity Legal Group® Probate and Trust Administration are a big part of what our Raleigh, Durham Chapel Hill area attorneys do. When you meet with us or any other attorney to assess whether you need to probate a parent’s estate, it helps to have a good sense of the basics.
Probate Process Basics
If you have never been involved in the probate of an estate before, it helps to start by explaining what probate is and why it is required. Most people leave behind an estate when the die. The estate consists of everything the decedent owned, or had an ownership interest in, at the time of death. This may include household property and personal effects automobiles, real property and financial accounts of several kinds. The law is structured to ensure that these assets end up where they should, it being the case that creditors, service providers (such as funeral homes) and beneficiaries under various legal arrangements should be accounted for and protected. Probate is the court process under which service providers and creditors rights are protected and the venue for the administration of the assets that pass under the Will. The Probate process might also allow for the assets which did not pass under the Will to be pulled into the Court for the purpose of paying creditors or resolving disputes.
In some cases, there is no Probate, both because there are no assets controlled by the Will and because there are no unusual or unexpected legal matters to be resolved and an alternative means of paying creditors and other expenses (for example, a Living Trust) as been put in place.
Why Should I Try to Avoid Formal Probate?
This no Probate outcome I described above is a good one. It saves time, money and frustration, and allows the family to settle the estate privately and without disclosing family wealth and obligations to the public record. It avoids the court fees required for probate assets, reduces legal and other professional fees, and typically means the estate settles quicker. While there is no doubt that formal probate if often necessary, in most estates it offers no benefits and nothing of value other than the formal discharge of creditors where the family is uncertain as to the debts and obligations of the decedent. This is rare. When it does arise, North Carolina law offers an alternative means for notifying creditors and barring their claims without the necessity of filing a probate proceeding. If you would like to know more about this, contact one of our trust and estate administration attorneys at Clarity Legal Group®.
Understanding Probate vs. Non-Probate Assets
Before you can decide if your mother’s estate qualifies for an alternative to formal probate you must identify the estate assets that will be part of the probate process and then calculate the value of those assets. When calculating the value of the estate assets you only include probate assets. This is because non-probate assets bypass the probate process altogether. Common examples of assets that are considered non-probate assets include:
- Assets held in a trust
- Assets owned jointly with right of survivorship
- Proceeds of a life insurance policy
- Accounts designated as “Payable on Death (POC)” or “Transfer on Death (TOD)”
- IRAs, 401ks, 403bs and other tax deferred retirement accounts.
- Life Insurance Company Annuities
Just because you can avoid probate in these ways doesn’t mean you should. Each of them comes with concerns for how they are managed and how they fit into your particular goals. Consideration of the best means to avoid probate is a basic part of a well consider estate planning process.
In some cases, the surviving spouse of a decedent can avoid probate in North Carolina through the use of the statutory Spousal Allowance. This is one of the first considerations in administering any estate for a surviving spouse.
Contact a Raleigh, Durham and Chapel Hill area Probate Attorney
If you have additional questions or concerns about probating an estate in North Carolina, please contact me or any of our probate attorney at Clarity Legal Group® by calling us at 919-484-0012 or contact us online.