Clients often ask, “What is ‘probate,’ and when do we have to do it?” When someone dies, probate is the process with the Clerk of Court for identifying the deceased person’s assets, paying the deceased person’s debts and expenses from their assets, and then distributing any remaining assets where they are supposed to go. The Clerk of Court oversees probate to assure it is done correctly and timely.
In North Carolina, probate is fairly short and relatively inexpensive compared to some other states. People here shouldn’t feel compelled to go to great lengths in estate planning to “avoid probate.” Some people choose to avoid probate by using revocable living trusts, but these trusts aren’t suited for everybody. However, anyone can take some steps to reduce the need for probate or to simplify probate.
Who handles probate? The Clerk of Court appoints the person to do these tasks. If there was a will, the Clerk typically appoints the person named as executor. If there was no will, the Clerk considers applications from anyone (typically family members) who wants to serve as administrator. Without a will, there is a statutory list of who has first chance to serve as administrator. The priority list starts with a spouse and then goes by next of kin. If no family member applies, anyone (a friend or even a creditor of the deceased person) can apply. Clearly, having a will simplifies this part of probate and lets you pick your own representative.
With the following legal shortcuts, it may be that no probate is necessary at all. If probate is needed, you may be able to simplify it by reducing the number of assets going through probate. Sometimes an abbreviated process can be used.
- Surviving spouses often don’t have to do probate at all. Assets titled jointly with right of survivorship skip probate and go directly to the survivor. With one form, the Year’s Allowance process allows the surviving spouse to take the first $60,000 of the decedent’s personal property without probate. This is handy for vehicles or bank accounts titled in the decedent’s sole name.
- If these tools don’t allow the surviving spouse to avoid probate, consider “summary administration.” It allows the surviving spouse to open and close the estate on the same day. The catch is that the surviving spouse must agree to become personally responsible for the deceased spouse’s debts.
- Retirement accounts, life insurance, investment accounts, certificates of deposit, savings bonds, and some bank accounts have a beneficiary form where you can fill in the name of the person, people, or charities who will receive this asset after your death. As long as the people you list are adults (over 18), the beneficiaries get this asset directly without probate. If you want to name someone under 18 as a beneficiary, let a lawyer help you with a trust to avoid serious problems.
- If the deceased person didn’t own any real property (land), and they owned less than $20,000 in personal property (or $30,000 more than what went by the Year’s Allowance if there is a surviving spouse), you can do a Small Estate. It has fewer steps and less paperwork than a regular estate, so is well suited for persons not using a lawyer.
- If all the deceased person’s assets had been moved to a revocable living trust, so the deceased person had no assets titled in their individual name, there is nothing to probate. Everything passes according to the trust.
- If all the deceased person owned was a motor vehicle, you may be able to transfer title to it using NC DMV Form 317, Assignment of Title. My website has an article about how to use this process.
If probate is still necessary after trying these shortcuts, remember that in NC we are fortunate that probate is relatively short and inexpensive. There’s no reason to fear the probate process.