When a loved one passes away, it can be a difficult time full of decisions and challenges. Something that often must be dealt with is the process of probate or administering an estate. Generally speaking, this process usually consists of filing the decedent’s will with the court, paying debts, distributing remaining assets to beneficiaries, and providing accountings to the court. However, not every estate has to go through the regular or “full” probate process outlined here. Small estates and estates in which the surviving spouse is the sole heir are notable exceptions, but even in those circumstances following the full probate process might be beneficial. Following is an outline of the typical steps involved in full probate in the State of North Carolina.
1. Consult an Attorney. It can be very helpful to consult an attorney before and throughout the probate process. Initially, they can get you started on the right path and alert you to problems they can foresee. They can be a resource or a guide or they can be more involved. The Clerk of Superior Court and the clerk’s staff cannot practice law or give legal advice.
2. Qualify as Personal Representative (PR). The PR is the person who is responsible for the administration of the estate. This is typically someone named in the decedent’s will (called the Executor) or the closest relation to the decedent who is able and willing (called the Administrator). Probate begins by filing an original will, if any, a death certificate and an Application for Letters in the decedent’s county of residence. Part of the Application is a preliminary inventory of the decedent’s assets, including some assets which will not or may not be part of the probate estate. The Clerk of Court must qualify the PR and will issue the PR Letters Testamentary or Letters of Administration. The PR has fiduciary responsibilities (obligations imposed by law on someone in a position of trust) both to the creditors of the estate and to the heirs. They must take care not to violate those responsibilities.
3. File Notice to Creditors. Generally, after the PR has been qualified they must publish a notice to creditors in a local newspaper. Creditors will have three months to make a claim.
4. Collect Information on Assets. As early as possible the PR should gather detailed information on the decedent’s assets. The Letters issued by the court provide the necessary authority to obtain bank statements and similar records. The PR needs to collect firm evidence with the exact date of death values for each asset.
5. File an Inventory. The “90 Day Inventory” is to be filed within three months of the PR’s qualification. This inventory is similar to the preliminary inventory except it includes only the probate assets and the values must be accurate rather than estimates.
6. Pay Costs of Administration and of Preserving the Estate. The PR must pay the Clerk of Court’s probate fees from the estate’s assets. They may also incur reasonably necessary costs to preserve assets of the estate from losing value, consistent with their fiduciary duties, and pay from or charge those costs to the estate. The Clerk of Court may disallow costs on a case-by-case basis. The PR may also request a reasonable fee for their services as PR which is payable from the estate upon approval by the Clerk of Court.
7. Pay Year’s Allowances. The surviving spouse and dependent children, if any, are each entitled to an “allowance” from certain assets of the decedent. The allowances are paid as priority claims against the estate but must be requested within one year of the decedent’s death. The Clerk of Court must review and approve the applications.
8. Pay Creditors. If there are sufficient assets in the estate, the PR must pay all debts of the estate. Certain procedures must be followed if the PR wants to dispute a possible debt they are aware of, even if the creditor does not file a claim within the allotted three month period. If there are insufficient assets, the estate will be insolvent and not all creditors will be paid. In that case, the PR must be very careful not to incur personal liability by paying too much to some creditors and not enough to others. Certain types of creditors will have priority and must be paid in full before creditors with lower priority can be paid any amount.
9. Distribute Assets. The PR must distribute any remaining assets to the beneficiaries according to the decedent’s will or, if none, according to intestate succession laws. Unless the decedent specified otherwise in their will, if any of the beneficiaries are minors, their share of the assets will need to be distributed to a custodian.
10. File an Accounting. The final step is for the PR to provide the clerk with an accounting of their activity with the estate’s assets between the Inventory and the estate’s closing. If the estate is open for more than one year, an accounting must also be filed each year.
For more details about regular administration of an estate, as well as alternatives to regular probate for small estates and where the surviving spouse is the sole heir, see the Estate Procedures Pamphlet from the North Carolina Administrative Office of the Courts (AOC-E-850) at www.nccourts.org/Forms/Documents/735.pdf.
The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for advice regarding your individual situation. We invite you to contact us and welcome your calls, letters and electronic mail. Contacting us does not create an attorney-client relationship. Please do not send any confidential information to us until such time as an attorney-client relationship has been established.