Estate AdministrationLet Us Guide You Through the Process
What is an Estate?
An estate is all the real estate and personal property that a person owns at the time of their death. Keep in mind, that the debts of the person who passed away are also considered part of their estate.
What is Probate?
Probate is the process of presenting a Will to the court and having it validated. Once a Will is probated, the estate is administered in accordance with the Will and North Carolina law. The administration process includes filinginventories, publishing notice in the newspaper, paying creditors, paying costs to the court, distributing assets to the beneficiaries, and oftentimes hiring an attorney to assistwith the administration.
What is Estate Administration?
If a person dies without a Will, the person is considered to have died “intestate”. The estate is then administered in accordance with only North Carolina law because there is not a Will to provide additional instructions. Similar to Probate, the administration process includes filing inventories, publishing notice in the newspaper, paying creditors, paying costs to the court, distributing the assets to the heirs at law, and oftentimes hiring an attorney to assist with the administration.
Who is the Executor, Administrator, and Personal Representative?
The Executor is the person that is in charge of administering the estate. If there is a Will, this person will be named in the Will. If there is not a Will, the person in charge of the estate is called the Administrator. The Personal Representative is the general term for the person in charge of administering the estate and includes both the Executor and the Administrator.
What does the Executor, Administrator, and Personal Representative do?
If a loved one asks you to be the Executor, or you are appointed by the court to be the Administrator of the estate, you will be in charge of administering the estate. Keep in mind this is an important decision to make, and should not be made lightly. Before you agree, you should have a good understanding of what your duties would be. Although no two estates are alike, some general duties include:
Common Estate Administration Duties
- Opening the estate with the Court
- Filing the Will with the Court
- Making an inventory of the assets
- Making a list of the beneficiaries
- Transferring vehicle titles
- Paying the creditors
- Filing tax returns (if necessary)
- Publishing a notice of the estate in the local newspaper
- Keeping records and providing the court an accounting at the end of the process
- Distributing the assets to the beneficiaries of the estate
Below is a downloadable questionnaire that can be used to get started with estate administration:
What Does it Mean to “Post Bond”?
A bond is basically an insurance policy the Executor or Administrator might be required to purchase in order to be in charge of the estate. The person required to obtain the bond (“post bond”) will need to contact a bond company and provide their personal financial information (for example, income, assets, and debts) to see if they will be approved for the bond. The bond companies also take into consider ones credit history and credit score.
There are many times a bond is not required. For example, a person can write in their Will that the Executor is not required to a post bond. To see if an exception applies to you, consult a qualified estate administration attorney.
How Much Does a Bond cost?
The amount of the bond is based on thetotal value of the personal property of the estate. The bond must be a tleast 125% of the value of the personal property. The premium that must be paid will then be about 1%-4% of the value of the bond needed.
What is the Role of a Trustee?
The trustee is in charge of administering a trust in accordance with the terms of the trust instrument, Federal Law, and North Carolina law. There are many different types of trusts including revocable living trusts, irrevocable trusts, Medicaid Asset Protection Trusts, and Special Needs Trusts (also called Supplement Needs Trusts). The role of the trustee will vary depending on the type of trust, assets in the trust, and the needs of the beneficiaries.
Common Trust Administration Duties
- Understanding the terms of the trust
- Managing the trust assets
- Distributing funds to the beneficiaries on a regular basis
- Approving/dissapproving requests for funds from the beneficiaries
- Paying bills for the beneficiaries
- Filing tax returns (if necessary)
- Keeping records and providing regular statements to the beneficiaries
At Dugan & Leger, we can assist you as an executor, administrator, personal representative, and trustee by guiding you through every step of administration. Knowing the difficulties in navigating the probate courts and understanding trust instruments, we are here to help you through the process. Give us a call today at (910) 253-5400 to schedule a free consultation to discuss your options regarding the administration process.
Nick Fernez leads our Estate Administration practice. Please click here to see his biography.