Dealing with the loss of a loved one is difficult enough without having to navigate the often complex legal process of probate. Probate is the court-supervised process of administering and distributing the assets of a deceased person (the decedent).
The purpose of probate is to pay off any debts owed by the decedent and distribute the remaining assets to the heirs.
While probate serves an important legal function, many people wish to avoid the process, if possible, to minimize costs and delays in distributing assets to beneficiaries. The experienced probate and estate planning attorneys at Apple Payne Law can help you understand the options available to avoid probate in North Carolina and ensure your assets are passed on efficiently.
What Does Probate Mean in North Carolina?
Probate in North Carolina refers to the legal process that gives the probate court jurisdiction over the assets in a decedent’s estate. The probate court oversees identifying assets, paying debts and taxes owed, and distributing remaining assets to heirs or beneficiaries.
The probate process typically involves:
- Filing the will and petitioning the court to open probate and appoint an executor
- Inventorying and appraising estate assets
- Paying valid creditor claims and estate taxes
- Filing estate tax returns if required
- Distributing remaining assets to heirs under the will or state law
Probate takes time, with the average probate administration in North Carolina lasting 12-18 months. Costs like court fees, executor commissions, and attorney’s fees also reduce the assets ultimately passed on to heirs.
Why Avoid Probate?
There are several reasons why you may want to avoid probate in North Carolina:
- It’s time-consuming. Probate can take 9 months to 2 years in North Carolina. This delays beneficiaries from receiving inherited assets.
- It’s expensive. Attorney’s fees, appraisal costs, court costs, and executor commissions can consume 3-7% of an estate’s value.
- It’s public. Wills and details of estate assets become public record during probate.
- No control. The court controls distribution, not your will, potentially contradicting your true wishes.
- Creditors. Probate gives creditors a chance to make claims against the estate.
5 Ways to Avoid Probate in North Carolina
An experienced probate attorney can help you avoid probate using these common methods:
1. Establishing Assets in Joint Tenancy
Joint tenancy allows two or more individuals to own an asset together while retaining rights of survivorship. That is to say, if one of the owners dies, his interest in the company automatically transfers to another owner who survived it. No probate is necessary for this transfer to occur.
An attorney can advise clients on properly titling bank accounts, vehicles, real estate, and other assets in joint tenancy to avoid probate. They can ensure all legal requirements are met for creating joint tenancy assets.
2. Creating Payable on Death (POD) Accounts
Payable-on-death accounts, like bank accounts and certificates of deposit, allow you to name a beneficiary who will automatically inherit the account upon your death. The beneficiary can claim the account funds without having to go through probate court.
An attorney can draft and help execute the paperwork to establish POD accounts. They can also confirm the titling and beneficiary designations meet state legal requirements for probate avoidance.
3. Using Transfer on Death (TOD) Deeds
North Carolina permits the use of transfer on death deeds for real estate. This allows you to name beneficiaries who will inherit the property immediately upon your death without probate.
An attorney can prepare the TOD deed, making sure it is properly titled and recorded. They will also confirm the TOD deed satisfies legal formalities in North Carolina for avoiding probate.
4. Creating a Revocable Living Trust
A revocable living trust can own assets during your lifetime in order to avoid probate at death. You maintain control over the trust assets while alive. At your death, the assets will be transferred to the trust beneficiaries per your directions, bypassing probate. An attorney can draft the trust and assist in re-titling assets to fund the trust. They can also serve as trustee if desired.
5. Designating Beneficiaries on Retirement Accounts
Assets like 401(k) plans and IRAs pass directly to the named beneficiaries upon the account owner’s death. This allows them to avoid passing through probate. An attorney can ensure your beneficiary designations on retirement accounts are properly filled out and updated.
How an Estate Planning Lawyer Can Help
While there are ways to avoid probate in North Carolina, the process isn’t always avoidable, especially if the decedent had no estate plan. Even with the proper planning, probate is sometimes necessary.
An attorney can help in several ways:
Guiding You Through the Probate Process
An experienced probate attorney understands North Carolina’s probate laws and procedures. They can handle tasks like locating assets, obtaining appraisals, paying debts, and distributing inheritances. This experience minimizes delays and errors.
Assisting with Estate Administration
Beyond probate, attorneys help with estate administration tasks like filing tax returns, communicating with beneficiaries, and resolving any disputes over the estate. This provides invaluable help to executors and administrators.
Creating an Estate Plan
A comprehensive estate plan is the best way to avoid probate. An attorney can draft wills, trusts, and other documents tailored to your situation to ensure a smooth transfer of assets to chosen beneficiaries while minimizing taxes.
Updating Beneficiary Designations
An estate planning attorney can audit your beneficiary designations and help update them to coordinate with your overall plan and avoid unintended probate of assets.
Advising on Probate Avoidance Strategies
Attorneys are familiar with all the probate avoidance techniques available in North Carolina. They can advise which strategies work best for your specific assets and situation.
When is Probate Unavoidable in North Carolina?
If you die without planning, owned assets titled only in your name will likely have to go through probate. An attorney can advise if any assets might qualify for North Carolina’s simplified probate procedures for small estates (worth less than $20,000).
Consult an Experienced North Carolina Probate and Estate Planning Attorney
While there are several ways to avoid probate in North Carolina, every situation is unique. Rules differ for married couples and types of assets.
A skilled estate planning and probate lawyer like those at Apple Payne Law can analyze your situation and implement the best probate avoidance and estate distribution strategies. Their years of experience with North Carolina probate law allows them to guide you through the complex process seamlessly.
Don’t leave it to chance – contact their team today to discuss your options for avoiding probate.