Probate – What Language is That Exactly?

One of our community leaders recently told me that she is named personal representative of her father’s will but she did not know exactly what that entails.  As the generation of baby boomers gets older, their parents are inevitably and unfortunately getting closer to the end of their lives.  The issue and confusion of the logistics following one’s death can be quite unsettling on the surviving heirs.  This article is designed to provide an overview of the probate process in the State of North Carolina.

Mom passed away. What’s next?

First and foremost, family and friends of the decedent should grieve for the individual and support each other after the loss of a loved one.  After things begin to settle down after the funeral or memorial service, the closest relatives or closest friends of the decedent if there are no heirs can begin the probate/estate administration process.  Probate is defined as the legal process wherein the estate of a decedent is administered.   Generally, the probate process involves the collection of a decedent’s assets, liquidating liabilities of the decedent, paying necessary taxes, and distributing property to heirs.  The personal representative is held to strict statutory and fiduciary guidelines to administer the estate in accordance with the will and the laws of North Carolina.

So who is responsible for all of these duties?  The answer is: it depends.  When an individual passes away, the estate of that person is classified as testate or intestate.  A testate estate is one in which the person executed a valid will.  Wills are normally kept in an individual’s safe, fire safe box, safe deposit box at a financial institution, or at the attorney’s office.  It is extremely rare that a will is filed with the Clerk of Court prior to the decedent’s passing.  In almost every last will and testament, the testator (the person that executes the will) names a personal representative to handle the duties of probate.  The terms personal representative, executor, and executrix are synonymous in estate administration with the only difference being the gender of the person.   The personal representative may serve with or without bond depending upon the provisions in the will.  A bond is an insurance policy that becomes effective and pays the beneficiaries their respective shares of the estate if the personal representative squanders or embezzles estate assets, but a testator normally states that the personal representative serve without bond.

If a decedent passes away without a will, that estate is an intestate estate, which means the estate is administered in accordance with the North Carolina General Statutes.  Under the Statutes there is an order of who is able to serve as administrator or administratrix of the estate.  An administrator is a person appointed by the court to administer the assets and liabilities of a decedent when there is no will.  The order of persons qualified to serve as administrator is as follows: surviving spouse, any devisee of a testator (if the named personal representative fails to qualify), any heir of the decedent, any next of kin, with a person of closer kinship having priority, any creditor to whom the decedent became obligated prior to death, any person of good character residing in the county of the decedent, and any other person of good character not disqualified pursuant to the Statutes.

With respect to administrators, the Clerk of Court is the ultimate authority and will appoint the person who is most likely to administer the estate in the best manner according to the Clerk.  Furthermore, the Clerk may appoint more than one person to serve as administrators.  For an individual who is a resident outside of the State of North Carolina to be appointed, a resident of North Carolina must be appointed for service of process.  Additionally, a bond is required to be posted for any administrator unless all beneficiaries over the age of eighteen waive such requirement in writing.  

“I declare that I am the Personal Representative!”

Much like with Michael Scott declaring bankruptcy in “The Office,” a mere verbal statement claiming to be a personal representative is not effective.  One has to apply with the Clerk of Court in the county in which the decedent was domiciled.  The county in which the decedent lived at the time of death is not necessarily the domicile as the person may have resided in a nursing home or assisted living facility in a different county at the time of passing.  

The personal representative files an Application for Probate and Letters Testamentary (if there is a will), Application for Probate and Letters of Administration CTA (there is a will but the named personal representative fails to qualify), or Application for Letters of Administration with the Clerk of Court.  The Application includes the following: full name, date of death, address at date of death, the name, addresses, and ages of devisees under the will or the intestate heirs,  and the nature and approximate value of the property of the decedent.  Values at this stage do not have to be exact and that fact that some assets may not be included does not present a problem.  Additionally, a certified copy of the death certificate is presented along with an oath signed by the personal representative.  If necessary, the appointment of a resident process agent, bond or bond waiver, and renunciations of personal representatives are filed.  

After qualification by the clerk, the personal representative receives Letters Testamentary or Letters of Administration.  These Letters allow the personal representative to locate assets such as bank accounts and move them into an estate account with a separate employee identification number for the estate.  The personal representative next runs a Notice to Creditors in a newspaper requiring creditors to submit claims against the estate as well as notifies known creditors of the death of the decedent.  Debts against the estate are paid from the assets of the estate as they come due, which may require liquidation of personal and real property.  Additionally, an inventory providing the exact date of death value of decedent’s assets is filed ninety days after the issuance of Letters.  Once the estate is able to be closed after claims are satisfied and extinguished, the personal representative files a final account showing all transactions from date of death to the current date, an affidavit of publication, and estate tax certification.  Any remaining estate assets are also distributed as required to devisees or heirs.  Once the final account is approved by the Clerk, the personal representative is discharged of fiduciary duties for the estate.

Conclusion

From the gist of this article, I hope you can see that probate is a different animal altogether.  Serving as a personal representative carries with it a great deal of legal responsibilities and fiduciary duties, which if left unnoticed, even if unintended, could result in civil or criminal penalties against the personal representative.  If you are named personal representative of an estate, I suggest you consult with an attorney with experience in this area of law to guide you through the process.

 

1Black’s Law Dictionary 712 (6th ed. 1990).

Published by Christopher D. Foster on December 15, 2016