The probate process ensures that any remaining creditors are paid what they are owed, and the remaining assets are distributed to the correct people. Many people are told by friends, colleagues, and professionals to avoid probate if they can. As a law firm that focuses on estate planning, we don’t decide that for you but instead educate you so that you may make the decision that suits your situation and desires. You’ll receive a detailed outline of all of your options when you work with us. If you are ok with your estate going through probate, we’ll build the simple estate plan you want.
Before you can decide on the matter, it’s important to get a better understanding of the probate process. In North Carolina, probate is not always complicated or expensive, but it does have some challenges, especially for people with out-of-state families. Understanding whether avoiding probate is suitable for you helps you know what probate involves and why some people avoid it with available estate planning tools.
Common Reasons Why People Need Probate
Probate is necessary when certain assets must be legally transferred to beneficiaries without a trust. These include real estate, cars, bank accounts, and other personal belongings. However, not all assets go through probate. Commonly used money vehicles, such as retirement accounts and life insurance policies, will go to the named beneficiary without going through probate as you have listed a designated beneficiary who lives longer than you. To claim these assets, the beneficiary usually only needs to show a death certificate and complete essential paperwork to provide their social security number and decide if they want any taxes to be withheld.
Tax-deferred accounts, like IRAs, involve additional steps. For example, beneficiaries may need to pay income taxes on these accounts. A spouse beneficiary can spread these tax payments over time, but others may have to pay within ten years. These tax requirements force probate when there are assets like retirement accounts or when creditors need payment.
Probate is also necessary to pay off any debts or taxes that the estate owes.The probate process ensures that everything is settled and recorded correctly, giving the executor a clear direction on handling the estate.
What Probate May Look Like For You
In North Carolina, probate occurs in the county where the deceased person lived. This process can be time-consuming if you’re an executor but live in another state. You would need to file for probate in North Carolina if that is where the deceased person was domiciled or residing primarily, not in the state where you the executor or beneficiary live. An out-of-state executor can still manage probate but may involve traveling or working with local attorneys to handle filings and requirements. In some cases, you may be able to complete specific tasks by mail or online, but it depends on the specifics of the estate and the county requirements.
The probate process can take six months to a year, as the executor must file reports, submit inventories, and distribute to beneficiaries according to a schedule. Executors are also responsible for paying the necessary fees and any debts the estate owes. Executors need to be careful with these reports. Errors—even when they are unintentional—cause delays. In some instances, there may also be contempt charges for missed deadlines. Additionally, everything filed in probate is public record, meaning personal financial details become part of the public record.
While probate costs in North Carolina are not high, the process still requires time and effort. Executors may also face upfront costs, such as court fees, which they can later reimburse from the estate. However, until those funds are accessible, executors may have to pay out of pocket. For these reasons, many people find it helpful to plan to avoid probate, especially if their heirs live out of state or may not have the time to manage these details.
The administration of an estate where the decedent did not leave a will can be even more difficult and expensive. So even if you do not to set up a trust to avoid probate, you should at least establish a proper last will and testament to make the job easier for your family.
Schedule a Consultation
Planning to avoid probate could be helpful if you’re considering ways to make things easier for your family. I can assist you in deciding the best steps for your estate and whether probate avoidance makes sense in your situation. Schedule a consultation with us and find effective ways to build and craft the plan that fits you.