Planning for the future can feel frustrating, uncomfortable, and intimidating, so let us help take the guesswork out of it. If you are acting as executor of an estate or need to better understand the probate process, this legal guide will help explain it. If you need help with estate planning or just have a question, do not hesitate to contact us for an initial consultation (don’t worry—it’s free).

What is probate?

“Probate” is the legal process of settling an estate. During probate, all of a loved one’s properties, assets, accounts, and holding are found and identified, debts (if any) get repaid, and inheritances are given and paid out. It can be a complicated process that has a number of steps and required legal forms to be filled out. But in general, it can be broken down into these 12 steps.

STEP 1: Secure your loved one’s property and inventory it.

If you have been selected or plan to be the executor of the estate, you will first want to secure the property and assets of your loved one to make sure nothing is disturbed or taken (intentionally or unintentionally) by other friends and family. It’s a good idea to go ahead and create a general inventory of the property, assets, bank accounts, and possible holdings that will make up your loved one’s estate. You will need that inventory in order to be appointed as executor of the estate.

Step 2: Determine if there is a will.

You will want to determine if your loved one had a will since it may specify who will serve as executor and who will inherit what from the estate. If a will exists, you will want to provide a copy to the Clerk of Court in the county where your loved one lived. The Clerk of Court will begin the probate process and issue what are called “Letters Testamentary” that formally designate you as personal representative (executor) of the estate.

Step 3: If there is no will, apply to be personal representative (executor) of the estate.

If there is no will, you will have to contact the Clerk of Court in the county where you loved one lived in order to apply to be personal representative (executor) of the estate. In order to apply, you will need the general inventory of the estate from Step #1 along with the estimated value of all of those items. If there is no will, the Clerk will issue “Letters of Administration” that appoint you as personal representative (executor) of the estate.

Step 4: Determine if the estate qualifies to skip probate (or a shortened version of probate)

If your loved one did not have many assets or much wealth when they died, the estate may qualify as a “small estate” and can bypass all or most of the probate process. Click here to learn more about what is considered a “small estate” under North Carolina law.

Step 5: Collect, secure, and fully your loved one’s remaining property, assets, and accounts.

This includes bank accounts, personal belongings, rental income, and property. In order to secure bank and financial accounts and title to property, you will show the forms given to you by the Clerk of Court that appointed you executor. Finally, you will want to request an Employer Identification Number (EIN) from the IRS and open a bank account in the name of the estate.

Step 6: Notify known and all possible creditors.

An important part of the probate process is letting all known and possible creditors know that you are settling your loved one’s estate. For known creditors, you have to send notice to them within 75 days of you being named executor. To alert possible creditors, you will need to get an advertisement published in the local newspaper for 4 weeks in the county where the estate is being administered. The advertisement must 1) how to submit claims for repayment to the estate and 2) the deadline for submitting those claims. North Carolina requires that you give creditors 90 days from the date the advertisement is first published.

Step 7: Complete and file the 90-day inventory.

Within 90 days of you being appoint as executor, you will need to complete and file a detailed inventory of the property, assets, and financial accounts of the estate and include their values. For some items, you might need to hire an appraiser to determine the value.

Step 8: Pay allowances to a surviving spouse (and minor children).

If the executor of the estate is not a spouse, you may need to pay the surviving spouse (and minor children if they exist) an “allowance” that is provided by law. This gets paid first before any creditors or other beneficiaries. In order to receive an “allowance,” the spouse will need to a special application called “Application and Assignment Year’s Allowance.” The allowance is up to $30,000 in money, assets, or personal property from the estate.

Step 9: Pay off debts owed to creditors.

If you are aware of any creditors or if creditors submit a claim to the estate, you are required to pay them from assets and money that are part of the estate. You have to pay off the debts in a specific order according to North Carolina law.

Step 10: Distribute remaining property and assets to the beneficiaries of the estate.

After the creditors have been paid, whatever assets, money, and personal property that remain should be distributed to your loved one’s heirs and beneficiaries. If there is a will, you will distribute according to the instructions contained in the will. If there is not a will, you will have to distribute according to North Carolina law (known as intestacy laws).

Step 11: File taxes for the estate.

As executor, you will be responsible for filing your loved one’s last individual tax return as well as a separate estate tax return.

Step 12: Close the estate. You’re done.

After the process has been completed, you will have to “close” the estate with the Clerk of Court. To do that, you will be required to provide a detailed list of all payments, distribution, and transactions you made along with copies of receipts, checks, and statements from the accounts involved. The Clerk of Court will then file the closing documents.

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