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When an individual dies, that person leaves behind an estate consisting of all assets owned by the decedent at the time of death. Probate is the legal process that ultimately leads to transferring the assets controlled by the Will, or if there is no Will, the statutes, to the intended beneficiaries and/or heirs of the estate.
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Formal probate is not always required. It is only required if there are assets controlled by the Will. Often, a person who has received thoughtful estate planning, has successfully planned to avoid probate (and the related court fees, legal fees, and delays) through the use of a Revocable Living Trust. Even where there are assets to be administered under the Will, in the State of North Carolina, a small estate alternative to formal probate may be available for an estate if the value of the estate (after debts are paid) is less than $20,000 and more than 30 days have passed since the decedent’s death. The amount is increased to $30,000 for a spouse if he/she is the sole heir to the estate. If the estate qualifies, you may use an affidavit to transfer personal property without the need to go through the full probate. This is still a formal probate, but slightly less complicated. It is more common to avoid probate for a surviving spouse trough the exercise of the “spousal allowance”, which allows the surviving spouse (assuming these rights have not been waived by agreement) to claim up to sixty thousand dollars ($60,000.00) of assets from what would otherwise be the probate estate without the initiation of a probate proceeding.
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One of the first things that must be done during the probate process is to determine which assets are probate assets and which assets are non-probate assets. Non-probate assets bypass the probate process and may be distributed to the intended beneficiary immediately. Common examples of non-probate assets include:
- Assets held in a trust
- Proceeds of a life insurance policy
- Certain types of jointly help property
- Assets held in an account with a “payable on death (POD)” or a “transfer on death (TOD)” designation
- Certain retirement and pension accounts
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When someone dies without leaving behind a valid Last Will and Testament, the individual is said to have died “intestate.” Dying intestate does not avoid probate. Instead, the assets in an intestate estate are distributed according to the North Carolina intestate succession laws, meaning only close relatives will inherit from the estate in most cases. It is more expensive to administer an intestate estate than to administer and estate with a competently drawn and executed Will.
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If the decedent left behind a Will, the individual named as the Executor in the Will, after being appointed by the Court, oversees administering the estate during the probate process. The Executor is supervised by the Court, which expects that all activities of the administration of the probate estate will be accounted for by the Executor. If the decedent died intestate, any competent adult may volunteer to be the Administrator if the estate. If no one volunteers, the court will appoint someone.
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Although no two estates follow the exact same path through the probate process, there are some common steps, including:
- Identifying, locating, securing, and valuing estate assets
- Opening probate – usually in the county in which the decedent was a resident at the time of death.
- Notifying creditors that probate is underway and inviting them to make claims.
- Reviewing creditor claims and approving or denying each claim.
- Calculating and paying any state and/or federal tax due.
- Transferring the remaining assets to the intended beneficiaries/heirs of the estate.
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The amount of time it takes to get through the probate process can vary; however, in North Carolina, creditors have 90 days after initial publication or mailing of a creditor notice to make a claim against the estate. Consequently, it will generally take a minimum of four months to get through the probate of even a modest estate in North Carolina – and it often takes more than a year. Sometimes probate estates remain open for years.
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When the decedent’s Last Will and Testament is submitted to the court for probate, any interested party has the right to challenge the validity of the Will by filing a Will contest. Contrary to popular belief, a Will contest cannot be filed solely on the basis that the contestant is unhappy with his/her inheritance (or lack thereof). If a valid Will contest is filed, the Executor/Administrator of the estate must defend the Will throughout the ensuing litigation. Basically, the probate process comes to a halt while the contest is litigated. If the contest is successful, the Will is declared invalid and the court looks for another valid Will or the estate is probated as an intestate estate. If the contest is unsuccessful, probate resumes using the Will submitted to the court.
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The probate process can be a lengthy, and complex, process that involves legal and financial concepts with which the average person may not be familiar. For this reason alone, most Executors/Administrators do retain an experienced estate planning attorney to help them during the probate process.
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Contact Us
The North Carolina probate attorneys at Clarity Legal Group® are dedicated to helping you with all of your estate planning needs, both now and in the future. Contact the team today by calling 919-484-0012 or contact us online.
