One of the statements I most often hear when meeting with clients is “ I want to avoid probate”. My response is “why?” There may be reasons why you want to avoid probate but often, people often have an impression that probate is an impossible process and will cause their heirs to have to pay taxes. This is far from the truth. The Probate process has been used for hundreds of years and traces its origins back to the English legal system. While there are reasons to avoid the probate system and each person has different goals, this article will attempt to provide an overview of the probate process so you can determine if it right for you.
Once an individual has died, their loved ones must determine if the deceased individual has left a will. If the individual has left will then the named executor may submit the will to the court for probate. If there is no Will left by the individual, a loved one may submit an application to the court to become the administer of the estate.
Once the court qualifies either the administrator or the executor, that person becomes responsible for administrating the deceased individual’s estate. They must identify and collect all the assets that were the property of the deceased individual. The administrator/ executor must ensure that an accounting is presented to the court within 90 days of qualification listing all these assets.
The administrator/executor must ensure that the valid debts of the deceased individual are paid prior to distributing money to the heirs. This is accomplished by publishing a notice in the newspaper and notifying all known creditors. The creditors are then put on notice and must file proper claims stating the amount that is owed. If there are any tax obligations, the administrator/executor must satisfy those obligations out of the estate assets. The administrator/executor must determine if the submitted debts are valid; rendering payment to the valid claims and rejecting the invalid claims.
Once all debts are paid then the administrator/executor can render the remainder of the funds to the heirs of the deceased individual. If there is a will the executor must distribute the assets as dictated in the will. If there is no will, the administrator must distribute the funds to the heirs as determined by North Carolina state law.
As of February of 2022, the federal estate tax exemption for an individual is 12.06 million dollars. If your estate is valued under this amount, the estate will pay no taxes on the transfer of assets to your heirs.
While this not an inclusive list, it is a brief overview of the probate process and the steps that your loved one would have to take upon your death. If at anytime your executor/administrator needs assistance they can obtain the services of an attorney to assist them navigate the process.
This system may be avoided by putting assets into a trust, but this may be a more expensive option that may provide little benefit depending on your needs. Everyone has unique and specific goals when planning their estate. A revocable trust, irrevocable trust, or a will may be the most beneficial way to pass assets to your loved ones, but this depends on your unique situation. If you have question on Probate, give the experienced attorneys at McIntyre Elder Law a call at 828-233-5991 and schedule your free consultation today.
Attorney at Law