While estate administration after the death of a loved one is not something to look forward to, it may be required in most instances. A comprehensive estate plan helps to protect the wishes of the decedent, streamline the administration of the decedent’s estate and protect the rights of beneficiaries. In North Carolina, as is in other states, a decedent’s estate must be properly administered before being transferred to the new owners.
What is Probate and is it Necessary in North Carolina?
“Probate” is actually the act of the Court accepting a Will as valid. However, it has become common to refer to the administration process of an estate as “Probate.” Therefore, probate refers to the court-supervised process that takes place after a person’s death. While there are many exceptions to the necessity of probate, the process ensures that the assets of the estate areaccounted for and collected by the personal representative, that the debts of the decedent are paid and the assets are properly distributed to the rightful beneficiaries.
To determine whether an estate should be administered, we recommend scheduling a consultation with our office to review the facts particular to your matter.
Who Is an Executor, Administrator or Personal Representative?
An executor in North Carolina oversees the administration of the estate according to terms in the will. If there is no will, this person is called the Administrator. Collectively, Personal Representative refers to either title. After being appointed by the Court, the Court will issue legal documents establishing the personal representative’s authority to realtors, creditors, and beneficiaries, among other third parties.
The court orders allow the personal representative to legally access the decedent’s estate and officially begin the probate process. When you are nominated to be an executor, or an administrator, you owe certain duties to the beneficiaries of the estate, known as the fiduciary duty. This ensures that you carry out all required duties while observing the terms of the will and North Carolina law. If you fail to perform as expected, the court may impose upon you personal liability for your actions.
Fiduciary Duty
As executor or administrator in North Carolina, you are expected to perform your duties honestly, fairly, and transparently while protecting the best interests of the heirs of the estate. Failure to execute your dealings with due diligence could result in you being personally liable. Consult with a qualified North Carolina estate planning and probate attorney to ensure that you serve with prudence.
How Does the Executor Know What To Do?
With a court order in your possession, you can hire various professionals, including accountants, attorneys, property managers, etc., to help you with management. Reasonable compensation for these professionals is deducted from the estate’s assets.
A Practical Duty Checklist for an Executor in North Carolina
1. Commencing the Probate Process
As an executor in North Carolina, you must begin the process by critically reading the will, followed by filing a petition with the probate court. It’s important to avoid any unreasonable delays in commencing the process since it could cause unnecessary suffering for estate heirs relying solely on the subsequent distribution of the assets. It could also be viewed as a violation of the fiduciary duty.
2. Estate Appraisal in North Carolina
Identify and collect all relevant estate assets. File an inventory, appraise the assets, and ensure the records remain intact. Proper record-keeping allows you to easily provide the North Carolina probate court with an accurate list of current assets. The inventory and appraisal put everything in the open in addition to simplifying the final accounting process.
3. Managing the Estate Assets in North Carolina
Managing the estate is one of the most challenging responsibilities undertaken by an executor in North Carolina. You need to ensure that all assets are well maintained, invested, secured against theft, and protected for distribution to the beneficiaries later. Deposit any cash assets in an interest-bearing account so the beneficiaries can collect a profit on that asset as they await the conclusion of the probate. If there are any high-risk assets, such as risky financial investments, act prudently and liquidate the assets to avoid future losses.
4. Notifying Creditors and Beneficiaries
This is a critical function in the process since all creditors’ claims must first be resolved before any distribution of assets to the beneficiaries occur. After commencing the probate process, you have a legal duty to inform all known creditors and beneficiaries of impending hearings. If some creditors are unknown, provide adequate notice through a newspaper. The creditors are then given a chance to submit their claims to the court by the deadline provided in the notice. If for whatever reason, a creditor fails to submit their claim by the deadline, they are forever forbidden from collecting their dues.
5. Paying Taxes and Debts
The North Carolina Probate process also ensures that government taxes are paid and that creditors receive their dues before distributing assets to beneficiaries can occur. It’s important to note that not all claims are valid – it’s your job to work diligently with the court’s help to determine the authenticity of a claim.
6. Record-Keeping and Detailed Accounting
It’s your responsibility as the executor to provide a detailed accounting to the court before the estate’s closure. File every receipt and document received and present a detailed accounting for the court. If you misplaced some documents and failed to appear in the final document, your accounting may not be accepted by the Court.
7. Closing the Estate and Distribution of Assets to Beneficiaries
Finally, when you’re done, file a final account with the probate court as you seek a court order to distribute the remaining assets to the beneficiaries, pay attorneys, and yourself. It’s at this point that your account is approved or rejected.
It’s important to note that there may arise serious disagreements during the distribution as some beneficiaries receive what they had not expected. At this point, they can follow the legal procedure and contest the will if they so wish.
Contact Our Experienced North Carolina Estate Planning and Probate Attorneys
The days following the death of a loved one are usually laden with pain, grief, and so much despair. As such, most people don’t often know where to start when it comes to legal processes. An experienced estate planning attorney understands that being an executor is usually confusing and overwhelming, and especially if you are unfamiliar with the process.
Get assistance from the qualified North Carolina probate attorneys at David E Anderson PLLC, from the beginning of the probate process to appraisal, management of the assets, and everything in-between – call us today to schedule a consultation.