Estate Administration - Question #3:Why does the Court need to be involved? Are there alternate procedures to full probate?
When we meet with Executors and estate planning clients, we are often asked why the Court in North Carolina or South Carolina needs to be involved after someone dies, especially when it seems like the decedent had minimal assets. The Court is involved for several reasons, such as: (1) determining the validity of the will to legally pass title of assets to beneficiaries, (2) qualifying and authorizing an Executor to act on behalf of the decedent's estate, and (3) auditing the filings, such as inventories, accountings and petitions, submitted to the Court on behalf of the estate by the Executor. Contrary to popular belief, Court oversight and involvement can serve as the guardrail to ensuring an estate is properly administered. Still, we have many clients that for other reasons (e.g., privacy, speed, efficiency) prefer to minimize or eliminate probate.
In the Carolinas, and at a basic level, there are two types of estate administration. A typical estate enters “full probate administration” which often lasts about one year and includes multiple court filings. However, there are “alternate procedure administrations” which are like shortcuts to full probate administration. The availability of alternate procedure administrations, such as Summary Administration, Small Estate, and Family Allowances, depend on several factors, including the ownership, type, and value of the decedent's assets as well as the Executor's relationship with the decedent. This is the reason our estate planning services are designed to closely examine these factors before death.
Additionally, if only non-probate assets were owned by the decedent at their death, it may not be necessary to administer the estate through the Court at all. The following are some assets that often avoid the probate process altogether, either because of legal titling or contractual rights:
- Assets that are designated as “Payable on Death” (POD) or “Transfer on Death” (TOD) to named beneficiaries (i.e., bank accounts, stocks);
- Retirement accounts and life insurance proceeds;
- Real estate owned as joint tenants by the entirety (an ownership specific to North Carolina which is reserved for spouses) or joint tenants with the right of survivorship; and
- Assets titled to a trust.
Since each estate is unique and there are many components to consider, we encourage Executors to contact us before starting the administration of an estate or filing documents with the Court.