Someone important in your life has passed away. The Will names you as the Executor of the estate. What happens next? How can you make things go smoothly?
- Where to get basic information: The Clerk of Court has an excellent booklet available describing the probate process. You are not required to have a lawyer. However, some estates are complicated enough that you’ll need a lawyer. Some Executors choose to have an attorney even if they could handle a single estate themselves, to make the process easier. Lawyers know what forms need to be filed, when, and where. They sometimes know easier ways to get things done.
- Decide what kind of probate estate is needed: Many people know the gist of a “regular” estate, which takes at least 5-6 months to complete, requires running a newspaper creditor notice, and includes various forms filed with the Clerk. Sometimes there are shortcut alternatives. For example, when the surviving spouse is the only beneficiary, and that spouse does not mind taking on the estate’s debts, Summary Administration may allow opening and closing the estate on the same day. If Summary Administration will not work, the estate may be small enough to let the surviving spouse clear out the estate on a Year’s Allowance without opening a formal estate. In estates with personal property valued at less than $20,000 to $50,000 (depending on the family composition), a “small estate” process (technically called Affidavit of Collection) may save time and money.
- Get qualified if you are opening an estate: Opening the estate file with the Clerk gets you the papers showing you are officially the Executor, called Letters Testamentary. You’ll use these Letters to accomplish estate business, including opening an estate bank account to keep finances straight. Your Letters are what grant you authority to act as Executor and to prove that authority to other (like banks, life insurance companies, or difficult family members).
- Identify and take control of estate assets: Some of your most important duties are determining what estate assets are, and safeguarding them until the right time to use them to pay creditors or to disburse to heirs. If you as an Executor let go of estate assets too early, and it turns out they are needed to pay claims or they are supposed to go to another heir, you are financially responsible.
- Value assets: The Executor must list values for all assets. Many times tax value will suffice. However, remember that for real estate, higher values are usually better because you’ll want to maximize stepped-up basis (meaning a savings on capital gains taxes if the property is sold later). It may be worth getting an appraisal to justify a higher value on real estate. In general, lower values are better on personal property, like vehicles and furnishings, to save money on court filing fees.
- Let the creditor period run: The Executor may be required to publish a newspaper notice to creditors, or may choose to publish one if not required. The value of the notice is that it gives a 90 day period for estate creditors to file claims (except those the Executor already recognizes as valid). That means unknown creditors cannot “come out of the woodwork” later and claim they are owed money.
- Finish the estate: After the creditor period passes, the Executor can determine what money is needed to pay creditor claims, and can pay them. If necessary, assets like vehicles, furniture and land can be sold to generate money to pay creditors. There may be tax returns or other tax forms to be done; an accountant can help with these. The Clerk can approve payment of a commission to the Executor for his work. The estate can also reimburse the Executor for his expenses. Once creditors and estate administration expenses are paid, the Executor will distribute the remaining assets to the beneficiaries in the manner the Will requires. A Final Account is filed with the Clerk, which officially closes the estate. Similar rules apply to someone handling an estate where there is not Will. This person is called an Administrator, rather than an Executor.
Sometimes people are comfortable handling a simple estate without an attorney. What can an attorney help you with? By consulting an attorney early on, you can determine whether probate is necessary at all and, if so, what is the simplest, fastest, least expensive way to accomplish this. Knowing this early on can save unnecessary expense. Once you know an estate is needed, the attorney knows what needs to be filed and done, along with when and where to get these things taken care of. This makes it easier and less time consuming to handle the estate on time and to know it is done right. Some types of estates particularly benefit from help from an attorney, including those with real estate, those with many different assets, those with beneficiaries or heirs in conflict, and estates with a lot of debts or a lot of heirs. Some attorneys offer an initial consultation with new clients at no charge or at a small fee. Steffan & Associates, P.C. offers such a consultation a no charge, so that you can find out whether you need an attorney and what your matter will cost without worrying about the “meter running.”
Kim K. Steffan is an attorney with Steffan & Associates, P.C. in Hillsborough, NC. She can be reached at 919-732-7300 or firstname.lastname@example.org.
This article was last updated in January 2020.