Probate Property in North Carolina?
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What is Probate?
Probate is a legal process involving the assets of someone who has died, known in court as a “decedent.” During the probate process in NC, individuals prove their rights to those assets – and in real estate, we focus on land and homes.
Basically, the probate process proves the validity of the will and ensures that it is settled and carried out lawfully, with all assets divided as the decedent intended.
Dealing with a probate property can be an incredibly difficult situation when it comes to real estate, as it is complicated and often involves emotional attachments. There are a variety of factors that add to the complex issues around probate:
- You may not want the house or property
- The inheritance was unexpected
- You aren’t prepared for the costs or probate tax
- You are having disagreements with other heirs or family members
- The grief of your lost loved one is overwhelming
- You’d prefer to sell the house for cash now
- You just want the process to be over.
Despite the difficulty, it’s important to know all the details before making a decision with your probate property. We’ve provided information below, but if you’re dealing with probate in Buncombe, Henderson or Haywood county or have North Carolina estate law questions and need assistance, contact us!
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Preparing for the Probate Process in North Carolina
- Do you have the will? This legal document is key in a probate court, as it outlines the property distribution. Find the original document or ensure that it’s in a safe place. If the decedent didn’t have a will or you’re unsure about the will, that’s ok. This will be referred to as a “testate” probate. File it at your local county Clerk of Court. In Buncombe County, probate court is in Asheville. In Henderson County, probate court office is located in Hendersonville. In Haywood County, probate court is in Waynesville. If you’re not in Western North Carolina, find the county courthouse and go from there.
- How long do you have to probate a will? Make sure to file the will within sixty days of the decedent’s death. If you don’t, creditors and others named in the will may apply for probate to take possession of the assets. Next, get the assets together with documentation. You are the executor or fiduciary (trustee) of the will, so you are responsible for finding and securing the property outlined in the decedent’s will. If you are unsure if you are an executor, you should still work with family members to make sure the property is secured – for example: lock the home, clear any valuables and move them to a safe deposit box, and create a list of assets that all family members agree upon. Documentation and communication are vital here.
- Who is involved? Identify and locate everyone named in the will as executors, trustees and beneficiaries.
Don’t have the will? This is known as an “intestate” probate. You can still file for probate, and the court will divide property based on the laws specific to that issue. Look into North Carolina inheritance laws for more information on how to handle intestate property.
- Beneficiaries: You have to notify every person the decedent named in the will (or resulting from intestacy statutes).
- Creditors: You must publish a notice to creditors in the local newspaper in accordance with North Carolina state law. This gives creditors a set amount of time (at least three months) to file a claim on the estate. If their claim is valid, you must pay them from the estate’s assets. You can also contest invalid claims. If creditors don’t file a valid claim within the timeframe, they are barred from filing claims in the future.
- Clerk of Court – Provide Inventory: You have ninety days to provide an inventory of assets to the country clerk of court. This includes assets that may not apply to probate, like IRAs, life insurance policies, and jointly-owned property. When you provide the inventory, be prepared to pay a fee.
You may want to get a new file cabinet for all the documents you’ll need to keep track of! These documents serve as official record in your inventory and/or final account, and you may need to submit them to the clerk of court.
- Bank and Investment Accounts: You’ll need statements from the decedent’s bank account(s) showing the date of death balance. You should also obtain subsequent statements, the signature card, and copies of all checks that are cleared after death (these are often attached to the statements).
- Life Insurance and Annuities: If the decedent owned life insurance policies or annuities, you’ll need documents that provide the details. This includes the decedent’s cost basis, the date of death value, subsequent statements, proof of beneficiary, and the final liquidation amount. As we mentioned, these are not probate assets, but they are still required in the inventory.
- Tangible Personal Property: Make a list of the decedent’s property with the total fair market value. This can include jewelry, art, furniture, sports equipment, memorabilia, and tools, so this process may be complicated. Make sure to look in storage units and other locations the decedent may have stored their property.
- Real Property: This refers to homes and land – the type of property we deal with on a daily basis. Create a list of property and make sure to include complete legal descriptions, copies of deeds and relevant filings. If the decedent was paying off a mortgage, obtain records showing the amount and holder.
- Vehicles: List vehicles the decedent owned independently and jointly. Although jointly-owned vehicles do not need to be probated, you still need to make a record of them for the inventory.
- Mineral Interests: A mineral interest is the real property interest created in oil and gas or other minerals separated from a property. Compile a list of any mineral interests the decedent owned, including the states in which they owned the interests, the deeds demonstrating the decedent’s ownership, any documents relating to leases or payments received. You may need an ancillary estate for out-of-state interests.
- Businesses: Make a list of any joint ventures, partnerships, limited liability companies (LLCs), corporations, or similar which the decedent owned. You are now a legal, fiduciary owner of these, so review all corporate by-laws, LLC operating agreements, partnership agreements, etc.
- Trusts: Gather the paperwork for any trust agreements the decedent held interest. An attorney can help you understand how to proceed with these.
- Intellectual Property and Royalties: Have your lawyer help with these, too. Copyrights, patents, trademarks, royalty or like agreements the decedent owned can be tricky, so make sure you have all the documentation available.
You’ll also need records showing that you gave notice to creditors, paid appropriate and outstanding personal income and estate taxes for the decedent, and have generally covered all financial and legal bases.
You Can’t Hurry Probate in North Carolina
Administering an estate can take quite a long time. While some estates can be resolved quickly, others take years. During that time, you (the executor) are responsible for managing the estate’s assets well, keeping beneficiaries informed, and answering to the court.
Keep in mind that you are subject to a variety of legal duties, and failure to carry out these responsibilities properly can subject you to personal liability. That’s why finding assistance is a great idea – seek legal help, perhaps a financial planner, and maybe share duties with a trusted family member or beneficiary. You don’t want to risk loss of assets or additional legal proceedings.
- Be prudent. That means you must be wise and plan ahead when managing these assets. According to North Carolina probate law, the Prudent Investor Rule states that when acquiring, investing, reinvesting, exchanging, retaining, selling, and managing property for someone else (including a decedent), you must act with a high standard of judgment and care. The law holds you to act like an “ordinarily prudent person of discretion and intelligence” would – so if you don’t know how to proceed, ask for help. If you have special skills, you’re under a duty to use those. For example, if you were appointed a fiduciary because you’re an accountant, don’t ignore your financial responsibility.
- You can be reimbursed for this work via fiduciary compensation – save your receipts! Because serving as an executor requires work and entails considerable legal liability, North Carolina law provides that fiduciaries are entitled to compensation. Under N.C.G.S. §32-59, “[u]nless otherwise provided by the General Statutes or by the instrument creating the fiduciary relationship, fiduciaries other than trustees under a trust shall be entitled, upon written request to the clerk of superior court, to reasonable compensation in an amount to be determined by the clerk.” You can also receive reimbursement for expenses you paid for during the process.
Approximately one year after your qualification for probate in North Carolina, you will submit a Final Account. You’ll pay the appropriate fees and the court will, once the estate is confirmed settled, release you as executor.