What is Probate? (And Why You Need to Know)
What Is Probate
Probate is the legal process that often happens after someone dies, whether or not that person left a last will and testament. In North Carolina, if you need to create a will, or if you need help with probate after a loved one’s death, arrange to meet with a good Raleigh probate attorney.
If someone dies with a will, that person’s property is distributed according to the instructions set forth in the will. But if someone dies with no will, North Carolina’s probate laws determine how the assets of the “decedent” will be distributed.
It depends upon what assets the decedent left behind. How does the process work in North Carolina? If you are the survivor of a decedent whose estate is subject to probate, what will you need to know?
If you’ll keep reading, you will learn the answers to these questions, and you will also learn more about probate and estate planning in North Carolina. Death is the one reality that none of us can avoid, so at some point in time, these are answers that everyone will need.
What Does Probate Involve?
Probate involves listing and assessing the assets and properties in a decedent’s estate, paying the estate’s debts and taxes, and distributing what remains according to the decedent’s will.
You may have heard that you should try to avoid probate. Probate ties up property for months, and sometimes for longer than a year. It can also be costly. Legal fees can reduce the value of some estates by up to five percent.
Usually, an estate must pay attorneys’ fees, court costs, an appraiser’s fee, a personal representative’s costs, and sometimes other expenses.
Is There a Probate “Shortcut” for Smaller Estates?
If an estate is simple, North Carolina allows it to be probated with a simplified process (“summary administration” or “administration by affidavit”) that does not require the appointment of a “personal representative” to manage the estate.
To qualify for summary administration, an estate cannot include any real estate or other property that requires a title or deed.
In all other cases, the probate process begins when a court appoints a “personal representative” to manage the details of a decedent’s estate. In some cases, the decedent has previously named a personal representative, but if not, the court will make that appointment.
Who Can Be a Personal Representative?
Who may the court designate as an estate’s personal representative? A personal representative may be:
1. the decedent’s surviving spouse
2. anyone receiving property as instructed by the decedent’s will
3. anyone entitled by law to receive the decedent’s property if there is no will
4. any of the decedent’s immediate family members
5. any creditor to whom the decedent was obligated
6. anyone of good character who resides in the county and applies with the clerk of the court
What Are a Personal Representative’s Responsibilities?
After being appointed or recognized by the court, a personal representative is responsible for:
1. gathering the decedent’s assets
2. paying any outstanding bills, debts, and taxes
3. distributing whatever assets remain
What Property is Subject to Probate? What Isn’t?
In North Carolina, the process deals only with a property that is in the decedent’s name alone, such as:
1. bank accounts with no beneficiary and no co-owner
2. real estate that is owned solely by the decedent
3. stocks and bonds in the decedent’s name
4. items such as jewelry and works of art
5. vehicles that are registered in the decedent’s name only
Probate does not deal with:
1. property in a revocable trust
2. real estate owned jointly
3. retirement accounts and life insurance policies with designated beneficiaries
4. bank accounts with a transfer on death (TOD) or payable on death (POD) clause
What is the Role of an Attorney?
Probate is almost all paperwork. In most cases, there is no dispute or contest, and rarely requires a probate attorney’s litigation skills. Instead, in most cases, a probate lawyer’s job is to complete the mountain of paperwork and satisfy the filing deadlines and other technicalities.
You can avoid having your estate probated, and it is not that difficult. One popular way to avoid it is by creating a living trust rather than a last will and testament. You will need an attorney’s help to create a living trust document and transfer your property to the trust.
At the time of your death, the successor trustee (comparable to a personal representative) whom you have named in the trust will be able to transfer properties to the trust beneficiaries without a probate proceeding.
Ways to Avoid
If you and another person own property jointly, and the ownership includes a “right of survivorship,” the surviving owner automatically receives the property upon the other partner’s death. No probate is needed to transfer jointly-owned property with a right of survivorship.
If you own stocks and bonds with a transfer-on-death (TOD) clause, your beneficiary will inherit the account upon your death, and no probate will be needed. Your beneficiary then deals directly with your brokerage company to have the account transferred.
Giving away or donating your assets and properties while you’re still alive can also help you to avoid them. If you don’t own something, it does not need to go through probate. That reduces the cost of probate because in most cases, bigger estates incur more costs in the probate process.
A Good Attorney’s Advice is Essential
Probate law in North Carolina is exceedingly complicated and detailed, with a large number of exceptions and deadlines. A good probate attorney’s advice and guidance are essential.
Even if you do not believe that probate is needed after a loved one’s death, you should still meet with a North Carolina probate lawyer to ensure that the law is satisfied and that you are not losing anything that you may be entitled to.
Good estate planning consists of making the right choices to protect your estate and to make certain that your instructions are carried out after your death. Estate planning is essential for business owners, families, and for anyone who intends to provide effectively for loved ones.
Do not wait to discuss estate planning – and how to avoid probate – with the right Raleigh probate attorney. We never know what the future will bring, but the right attorney can help you prepare effectively for tomorrow.