After a person passes away, his estate must pass through a court-supervised process called probate before inheritances can be distributed. During this process, a specific individual called the executor or estate administrator takes charge of the deceased person’s final affairs. This person is often the surviving spouse or another responsible relative, but it can be someone else named in the will or appointed by the court. The estate administrator will pays taxes on assets and settles debts, while the court supervises.
A Timeline for Estate Administration
If the deceased person—who is called the decedent in legal terminology—named an executor or administrator in his will, that person will be responsible for seeing the estate through probate, and the court gives him power to act in the best interest of the estate. Otherwise, the court will appoint an administrator.
Although every case is unique, the named or appointed administrator must execute the following steps:
- Account for all the decedent’s assets. The executor has three months to file a complete list of assets with the probate court.
- Notify creditors. When a person passes away, his creditors must be made aware. They will need to prepare bills for any outstanding debts owed by the estate.
- Secure a year’s income for the surviving family. If the deceased left money for his surviving spouse and dependent children, the court permits the executor to secure this money for them before paying off any debts. The executor may only set aside this living allowance from the decedent’s cash or personal property; he is not allowed to sell real estate.
- Pay the creditors. If funds are insufficient, the executor may work with the family to sell assets in order to pay debts.
- Complete a tax return. The executor must prepare and file an individual tax return for the decedent’s income in his final year, as well as an estate tax return if the estate earned any income during the probate process.
- Disburse inheritances. Following the instructions of the will, the executor may distribute inheritances to beneficiaries after all debts have been settled.
- Submit a final court report. After paying debts and inheritances, the executor must draw up a final report—including itemized actions taken with receipts for any money spent—and give it to the appropriate court.
The actual timeline of probate varies significantly depending on whether a will exists, what assets must pass through the probate process, where the death occurred, and if anyone challenges the asset distribution. In a simple case where there is no challenge to the will, North Carolina probate will typically take nine to 18 months.
Not Every Asset Passes Through Probate
Any assets owned jointly by the decedent and another person will not go through probate. Upon the death of one joint owner, full ownership of the asset passes to the other joint owner. For example, a home owned jointly by spouses passes to the survivor upon the death of the other. Additionally, life insurance policies and assets in a revocable living trust will pass directly to the named beneficiaries.
Hire an Attorney Who Knows Probate
If you’ve recently lost a loved one or were named executor of a will and have questions about how to handle an estate, you need the help of an experienced lawyer. The team at Teague Campbell can walk you through each step and help you understand procedures. To start a conversation with us, start a live online chat on our website today.