FAQ Series

Estate Administration - Question #1:

What are some common terms encountered when administering an estate after someone's death?

Overview

Like a lighthouse guiding a boat to safe harbor, we pride ourselves on helping families and friends navigate the often uncertain waters of estate administration after a loved one's death.  Usually, the first questions we hear center around new and unfamiliar words found in the Will or spoken by the Court. 

Because of this and before we dive into the estate and trust administration section of our FAQ Series, we must first review some of the core terminology that our clients commonly encounter during the administration process.  While not an exhaustive list, understanding the vocabulary below will be the first step in properly administering an estate. 

Terms and Definitions

• Beneficiary

  A person, trust, or entity (such as a charitable organization) designated to receive property from a decedent's Will, Trust, life insurance policy, or retirement account.

• Bond

  A bond is obtained as a type of insurance by the Executor or Personal Representative to protect the beneficiaries of an estate and to ensure that the Executor or Personal Representative is handling the affairs of the estate appropriately and in accordance with the law.  The requirement to obtain a bond by an Executor or Personal Representative is typically addressed in the decedent's Will.  If the bond is not explicitly addressed, such Executor or Personal Representative will need to follow state law bonding requirements.

• Decedent

  A term used to describe the individual who has died and whose estate is being administered.

• Executor

  An individual appointed in a person's Will to handle administering his/her estate after their death, including but not limited to, the management of the decedent's assets, distribution of the decedent's property, and timely fulfillment of court process and reporting requirements.

• Intestate 

  A term used to describe when a person dies without a valid Will or with a Will that does not fully dispose of all his/her property.  When this occurs, the estate will be administered and the decedent's property distributed to individuals according to North Carolina law.

• Letters

  Letters of Testamentary and Letters of Administration are documents issued by the Clerk of Superior Court following their review and approval of the application to open an estate and the Will (if applicable).  The Letters show the individual(s) authorized to act on behalf of the estate to collect assets and administer the estate, such as the Executor or Personal Representative. The Letters are not “letters” in a conventional sense; rather, they are often one-page “permission slips” issued by the Court and primarily used to assure third parties (such as banks) or individuals that the Executor (or Personal Representative) may act for the decedent and his/her estate.

• Notice to Creditors

  An announcement published in a local publication (such as a newspaper) qualified to publish legal notices, or provided directly to a known creditor of the estate, which states the name and date of death of the decedent, as well as the necessary information for filing a creditor claim against the estate.

• Oath

  A formal declaration by the Executor or Personal Representative wherein they affirm or swear that they will administer the decedent's estate to the best of their ability and knowledge under the constitution of the United States and laws of North Carolina. The Oath is typically handled in a signed writing submitted to the Clerk of Superior Court along with the application to open the estate.

• Personal Representative

  Sometimes this term is used interchangeably with Executor.  The duties of a Personal Representative are the same as the Executor, except that the term “Personal Representative” is generally used for the individual appointed to handle an intestate estate.

• Probate

  The court supervised process in which a Will is recorded, an Executor or Personal Representative is appointed, and the decedent's wishes are carried out.

• Testate

  A term used to describe when a person dies with a valid Will.  In such situations, the estate will be administered according to the decedent's Will.

Once these terms are understood, our clients often feel more confident and ready to tackle the tasks involved in administering an estate.  As the FAQ Series continues, we will be addressing common questions we have received over the years as legal professionals assisting clients in the administration of decedent's estates and trusts.

Check back regularly for the continuation of our FAQ Series on our blog page where we will cover the frequently asked questions from our Practice Area  pages in more depth.  Please connect with our team or contact our office if you have any questions or to learn more.