Navigating Probate Court In North Carolina

Last updated on August 20, 2024

Probate refers to the process of administering someone’s estate through the North Carolina court system. It is typically confusing, stressful, time-consuming and expensive – all in the immediate aftermath of having lost a loved one. Salem Law was founded in 2010. Attorney Daniel Umlauf, the firm’s founder, provides legal guidance and support regarding the probate court process to clients in the Winston-Salem communities.

What Is The Probate Process?

Probate is the process by which a deceased person’s property, known as the “estate,” is passed to their heirs and beneficiaries (people named in the will). The entire process, supervised by the North Carolina probate court, often takes about a year. In cases where real estate is owned in another state or there are other unique assets, it is likely to take longer than a year. However, substantial distributions from the estate can be made in the interim.

What Property Is Subject To Probate?

Not all property passes through probate. Certain kinds of property are not part of the probate estate and are usually not subject to the probate process, such as:

• Jointly owned property with a right of survivorship
• Life insurance proceeds
• Retirement accounts (as long as the estate is not named as a beneficiary)
• Property held in a trust

However, even when certain assets don’t have to go through probate to be distributed, they still have to be listed and inventoried, and any change in value must be accounted for and recorded. These include:

• Bank accounts
• Investment accounts
• Certificates of deposit (CDs)
• Stocks
• Bonds

These accounts still need to be assessed and evaluated because creditors have a right to know about potential sources for debt satisfaction if the decedent owes money.

Does Real Estate Have To Go Through Probate In North Carolina?

While real estate in North Carolina is considered to go directly to the beneficiaries outside of probate, a transfer can be delayed by the estate’s personal representative. The personal representative has the power to pull real estate back into the estate for almost any reason. Usually, this happens because of potential creditor claims. When this happens, beneficiaries are left in limbo. In addition, this can also cause trouble procuring bank loans or obtaining title insurance while the estate is in probate.

What Happens With State And Federal Taxes During The Probate Process?

Under North Carolina law, your “estate” or “taxable estate” for federal and state tax purposes includes everything you owned or had control over at your death. State and federal income tax filings for both the decedent as an individual and the estate of the decedent must be filed by the personal representative. There are many special rules that apply at death, especially concerning capital gains taxes. Even if no federal estate tax is due, there may be reasons to file a federal estate tax form. Our knowledgeable and experienced probate attorney at Salem Law can advise about such filings.

How Does The Probate Process Get Started?

First, an “application” for probate must be filed by the named executor or personal representative with the probate court, along with the original will, a certified copy of the death certificate and a preliminary inventory of the decedent’s assets.

The notice must be mailed to all of the heirs at law (usually the surviving spouse, children and children of any deceased children), to those named as beneficiaries in the will. If the applicant received Medicaid, notice is also sent to the appropriate state agencies.

If no one objects and the will is found to be properly executed and drafted, the named personal representative will be issued a document called “Letters Testamentary,” which will endow them with the requisite legal authority to collect the decedent’s property and implement their wishes as specified in the will.

What Does The Personal Representative Do?

The personal representative is responsible for collecting the probate property and paying any debts of the estate. Within 90 days of their appointment, the personal representative must file a “final inventory” with the probate court. The final inventory is an itemized list, and it must include the following:

• The exact date of death
• A list of all property passing to heirs through probate
• A list of all jointly owned property, even if it is property that does not go through probate

Jointly owned property must be listed because it will be available to creditors if necessary. The personal representative is responsible for filing and paying any federal or state taxes that may be due, including income tax forms for the decedents individually as well as estate tax forms if necessary. Note that there may be reasons to file estate tax forms even if no taxes are due. Our probate attorney can advise you as to the desirability of such filings.

Notice of the death must be published in the paper and sent to any known creditors. Creditors have 90 days to submit a claim against the estate. Creditor claims are prioritized and ranked, much like bankruptcy. Finally, after the time period for creditors to submit a claim has passed and claims have been paid, distributions may be made. Distributions are made according to the terms of the will.

Lastly, the personal representative is responsible for filing a final accounting with the probate court. This final accounting must show every transaction, expenditure and change in property value for the property reflected on the final inventory. Once this is approved by the court, the personal representative will be discharged from their duty.

How Long Does The Probate Process Take In North Carolina?

In North Carolina, the probate process typically takes about a year. However, the exact timeline can vary based on the complexity of the estate and whether any disputes arise. During probate, the court validates the will, ensures that debts and taxes are paid and distributes the remaining assets to the beneficiaries. If the estate is straightforward and all of its paperwork is in order, it might conclude more quickly. On the other hand, if there are disagreements among heirs or complications with the assets, it could take longer. Working with an experienced estate planning attorney can help streamline the process and address any issues that come up along the way.

Can Probate Be Avoided?

Yes, probate can often be avoided with proper estate planning. Common methods used to avoid probate include:

• Living trusts: By placing your assets in a trust, you can designate beneficiaries who will receive them without going through probate.
• Name beneficiaries: Another option is to name beneficiaries on accounts like life insurance policies and retirement funds, which also bypass probate.
• Joint ownership of property: Joint ownership of property with rights of survivorship is another way to avoid probate.

Consult an estate planning lawyer to explore different alternatives and determine the best strategy for your situation. Taking a proactive approach can save your loved ones time, stress and legal fees.

Attend A Workshop Or Schedule A Consultation

At Salem Law, we regularly offer complimentary estate planning workshops. Attendees can learn more about the services we offer and how we can assist. To find out more about our probate services or schedule a consultation, contact us at 336-715-1311 or send us an email through our website.