Navigating Probate in North Carolina
This information is general in nature and offers an overview of the process. Specifics should be discussed with a qualified probate, estate planning attorney.
The Clerk of Court in North Carolina
The Clerk of Superior Court in all 100 North Carolina counties serves as the judge of probate and cannot practice law or give legal advice. Therefore, you should not ask the clerk or the clerk’s staff to prepare your accounts or to advise you on the completion of forms or any legal issue.
If you need advice, you should consult an attorney, especially regarding disbursement of any funds, any questions about handling insolvent estates, or concerning federal and state taxes payable by the estate.
What Happens When You Can’t Find the Will Upon Death?
If neither the Will nor a copy can be found, the estate will be distributed to the close family members governed by State Law. Understand, this may not be the desired distribution.
Qualifications of Executor / Executrix
The title of “Executor / Executrix” is given to those named in the will to perform this job. If there is no will, the court will appoint a personal representative.
- You must be 18 years old
- Must be competent
- Someone convicted of a felony may not serve as executor until the restoration of his or her citizenship (meaning served required time, parole or post-release requirements or received and unconditional pardon).
- You can be an “out of NC” executor but must appoint a “resident agent of the state”.
Here Are Some of The Duties of An Executor
Seek Professional help if needed right away……Legal, accounting, real estate, etc.
- Gather the will and death certificate
- Secure and protect all property
- Determine if the Estate has sufficient assets to go through the Probate process
- Make an appointment with the Clerk of Court/Probate in your county to Obtain Letters of Testamentary
- Inventory assets: Bank accounts, stocks, retirement accounts, real estate, life insurance, (have appraisals done if necessary)
- Activate or terminate Government benefits
- Pay 1 years allowance to spouse or dependent children (if applicable)
- Give notice to creditors
- Pay all valid bills and taxes
- Distribute remaining assets per the will
- Close the estate
Letters of Testimentary
This process will begin at the Clerk of Court with a copy of the Will, the death certificate and whatever forms (application) the court will require you fill out in advance. The “Letters of Testamentary” give you the authority to act on financial matters including banking, investments and insurance.
Marshalling Assets (Executor has full authority over assets)
Probate assets typically include vehicles, real estate, bank and brokerage accounts, and personal belongings such as jewelry, furniture, art, and collections. At this point the Executor will usually open an “Estate Account” and transfer all existing savings/checking as well as deposit earnings, refunds, etc. that come to the name of the deceased.
Note: prior to selling any property, check the conditions of the will or seek permission from the Clerk of Court.
Paying Debts and Taxes
One of the first jobs of the personal representative is to publish a notice of the probate proceeding in a local newspaper, once a week for four weeks. This alerts creditors that they should come forward with any claims against the estate within three months after the date of first publication of the notice.
The personal representative must also deliver or mail a notice to creditors about how, when, and where they can file claims against the estate
If there isn’t enough money in the estate to pay all the debts, state law sets a priority. Assets that have liens (legal claims) attached to them have first priority; after that come funeral and burial expense (up to $3,500), taxes, and then other expenses.. The surviving spouse and minor children are entitled to a year’s support.
The executor must file final state and federal income tax returns for the deceased person. These returns are generally due by April 15 of the year following the year of death. Income tax returns may also be required for the estate itself, if it receives income.
State and federal estate tax returns will be required only if the taxable estate is very large—for deaths in 2020, more than $11 million. The vast majority of estates—more than 99.9%–do not owe federal estate tax. North Carolina repealed its state estate tax in 2013.
Distributing Assets and Closing the Estate
When debts and taxes have been paid, the personal representative can distribute the property to the people who inherit it. The personal representative must follow the directions in the will, or if there is no will, give property to the closest surviving relatives, as state law directs.
Before the estate can be closed, the personal representative must file a final accounting with the court. The accounting is a statement showing all the transactions the personal representative entered into on behalf of the estate. (If the estate stays open more than a year, an accounting must be filed annually). The accounting must be accompanied by evidence of all transactions, such as canceled checks, receipts, and bank statements.
- When there are physical items, possibly furniture, clothing, jewelry being distributed to out of town beneficiaries, have a firm understanding as to the value of the items as well as who will be paying for the shipping costs (a china closet being shipped to California from NC). Did the will make provisions for freight costs and if not, it most likely is the recipients responsibility.
- Make sure you have an idea how to locate all the people in the will. If you know you are an executor, you may want to encourage the testator to update their will or have contingency beneficiaries.
- Leaving Real Estate to multiple children (beneficiaries). This is called an “undivided interest”. The beneficiaries must decide what to do with the house (property); keep it or sell it. Note for NC: In North Carolina, the rule of thumb for married couples is that one spouse may purchase real property, but both spouses must sign the deed to sell property.