Estate administration is the process by which a decedent’s assets are distributed after the satisfaction of certain legal requirements. This process is also commonly known as “probate.” Probate is necessary when an asset previously owned by a person who has died otherwise has no new ownership automatically designated. For example, an individual retirement account (an “IRA”), which has a beneficiary designation, does NOT need to be probated because after the account owner dies, the account’s new owner is already predetermined. The same holds true for a checking account owned in joint ownership with right of survivorship or a brokerage account that has a Transfer On Death (“TOD” or “POD”) provision. No probate is necessary in these situations because after an owner dies, the asset “knows” it already has a new owner.
On the other hand, some assets are not jointly owned or otherwise designated for new ownership after the death of the owner. These types of assets require probate to establish the assets’ new owner(s). The most common examples of such probate assets are individually owned vehicles, bank accounts, or personal property. If the value of these types of probate assets exceed a certain amount, North Carolina law mandates that probate occurs.
Another important consideration in determining the need for estate administration–or probate–is whether the decedent had any debt at the time of death. The claims of creditors or potential creditors must be properly handled so that the decedent’s assets may be lawfully distributed. The distribution of assets without satisfaction of creditor claims may cause significant legal issues for heirs later on, so it is crucial to understand the legal ramifications of estate administration before making such distributions of property to heirs.
Finally, if a decedent dies owning real property (i.e., land or a home) without a survivorship designation, probate may be vital in clearing title to the real property to effectively pass to the heirs. Otherwise, the heirs to real property that has not been properly probated may experience expensive legal problems in the future. It is no fun to inherit property that winds up costing you more money than you anticipated.
So, if you are an heir or a personal representative to an estate with real property, do not disregard the need for proper legal advice in handling such an estate. Attorney April M. Burt has over 15 years of experience in estate administration and can give you the guidance you need to ensure you have met your legal requirements in distributing and/or inheriting property. Having the knowledge in advance of distribution or inheritance is invaluable. Give us a call at Burt Langley so that we may schedule a convenient consultation appointment for you as soon as possible.