ESTATE/TRUST ADMINISTRATION

Probate and Estate Administration

In North Carolina, the death of a loved one triggers the mandate to administer his or her estate, to manage and distribute the estate’s assets. In most cases, estate administration involves a court-managed process called probate. However, if your loved one owned his or her assets through a well-drafted and properly funded living trust, it is likely that little or no court-managed administration is necessary, although the successor trustee will need to administer the distribution of assets according to the trust. There are also other exceptions to the full administration process, such as for small estates.

The probate process is managed by the Clerk of Superior Court of the county in which the deceased lived. The Clerk serves as the probate judge, and neither the Clerk nor the Clerk’s staff is allowed to practice law, give legal advice, or assist with preparing accounts or completing forms. Thus, if you have been appointed as the executor or administrator of an estate, it is highly recommended that you consult with an attorney at the outset of the estate administration.

Generally speaking, the executor or administrator’s job is to gather and manage the decedent’s property throughout the administration process. This will include filing various forms with the Clerk of Court, providing notice to creditors and paying the decedent’s debts and claims on the estate, and distribution the remaining property according to the decedent’s Will or the North Carolina intestacy statute. Depending on the size and nature of the estate, the personal representative may have other duties and responsibilities as well. The personal representative may hire professionals such as attorneys, accountants, or appraisers to assist with the administration of an estate, and may petition the Clerk of Court to allow payment of associated fees from the estate.

Howes Law can assist you with the entire estate administration process. We make the process as sensible and pain-free as possible. If you would like assistance with estate administration, we invite you to contact us for a free initial consultation.

 

Required Steps for Probate

Every probate estate is unique, and while each will have its own unique requirements, the administration of all estates requiring the full probate process features several common steps. If you are the personal representative of an estate, it’s important to know your duties and responsibilities under the probate process. The following list is a guide to these common probate estate requirements. Howes Law can assist you with the entire estate administration process. We invite you to contact us for a free initial consultation.
A person is said to have died “testate” when he or she dies having executed a valid Last Will and Testament. To the contrary, if a person dies without having executed a valid Last Will and Testament, he or she is said to have died “intestate.” The person appointed in a Will to administer the estate is called an executor or executrix. To begin the process of estate administration upon the death of a love one with a valid Will, the Executor files an Application for Probate and Letters to the Clerk of Court, accompanied by the Last Will and Testament, Death Certificate and certain other probate forms. The Clerk of Court, in turn, issues Letters Testamentary to the Executor, giving legal authority to the executor to act on behalf of the estate. When a person dies intestate, a qualified person must submit an Application for Letters of Administration, along with the death certificate and certain other probate forms, to the Clerk of Court to begin the estate administration. The Clerk of Court then appoints an administrator or administratrix to administer the estate, and issues Letters of Administration authorizing the Administrator to act on behalf of the estate. Executor and administrator are also known as the deceased’s Personal Representative. If the decedent did not have a will or if the will does not waive the requirement of bond, the personal representative may be required to furnish a bond unless certain exceptions apply. If your loved one has passed away and you have been named as the executor/executrix, or if your loved one passed away without a will and you would like to be appointed administrator, you should contact an estate attorney to understand your duties and obligations, as well as gain valuable assistance in working through the estate administration process. We invite you to contact us at Howes Law for a free initial consultation.
Upon letters being issued by the Clerk of the Court, the personal representative must publish a Notice to Creditors in a newspaper “qualified to publish legal advertisements.” In addition, prior to filing the 90-day Inventory of the assets of the estate, the personal representative must personally deliver or send by first class mail a copy of the Notice to Creditors to all known creditors or those who can reasonably be ascertained by the personal representative within 75 days after the granting of letters. With a few exceptions, any claims made on the estate more than 90 days after the date required by the notice will be barred from collection. Once the creditors’ period has expired, the personal representative should pay claims against the estate in the order of prioritization outlined by North Carolina law. It is very important to obtain the advice of an attorney before paying claims against the estate, as the personal representative may be held personally liable for incorrect payments.
The personal representative must file an Inventory for Decedent’s Estate with the Clerk of Court within 90 days from the date the letters are issued. This is known as the “90-day Inventory,” and must provide an accurate accounting of all of the property owned by the decedent as of the date of death. This duty requires the personal representative to gather and determine the value of all of the decedent’s assets. It may be necessary to obtain appraisals of certain assets—such as real estate or jewelry—and other supporting documents may need to be filed along with the Inventory. When the 90-day Inventory is filed, certain fees must be paid to the Clerk of Court. Under current law, the fee includes a $120.00 administrative fee, plus 0.40% of the gross estate subject to administration up to a maximum of $6,000.00.
Income tax returns must be filed for the decedent for the year in which the death occurred. The estate may also need to file a fiduciary income tax return; for example, if an estate holds interest-bearing financial accounts or is receiving rent payments on properties during administration. In some cases, state and federal estate and/or gift tax returns must also be filed. It is highly recommended that a personal representative seek the counsel of an accountant and/or attorney to determine which tax returns are necessary and for assistance in filing the returns.
Once the expenses and creditor claims have been paid, the personal representative may distribute the remaining property within the estate according to the decedent’s Last Will and Testament (or the North Carolina Intestate Succession Act if there is no Will). The personal representative should obtain a receipt from each beneficiary receiving a distribution. During the estate administration process, a decedent’s surviving spouse or dependent children may receive funds for living expenses by filing an Application and Assignment of Year’s Allowance. This allowance takes priority over other claims on the estate. Surviving spouses may receive up to $30,000.00, while dependent children may receive up to $5,000.00 each.
The personal representative should maintain detailed records of all receipts and payments for the estate. A Final Account listing all property received by the estate and all payments made from estate funds is normally due within one year after the date of qualification. When a Final Account is filed, the Clerk of the Court usually requires copies of the receipts and payments, including copies of checks and possibly other documents. In some cases, the estate may need to remain open for longer than a year. In that case, the personal representative must file an Annual Account. When the Final Account is accepted by the Clerk of Court, the estate is closed and the personal representative is discharged from any further obligations. Howes Law can assist you with the entire estate administration process. If you would like assistance with estate administration, we invite you to contact us for a free initial consultation.

Trust Administration

When a deceased person has a fully funded revocable living trust, the probate process is often unnecessary. However, the trustee will still need to manage the trust property during the administration process, pay debts and taxes, and distribute the estate according to the terms of the trust. Likewise, if a decedent has some other type of trust, such as an Irrevocable Life Insurance Trust (ILIT), the trust must be administered after the death of the Trustmaker.

If you are the trustee of a deceased loved one’s trust, we can assist you with your duties as trustee to ensure the trust is administered correctly and efficiently. If you are a successor trustee and have questions about administering a trust or would like assistance with trust administration, we invite you to contact us for a free initial consultation.