When you lose a loved one, your family must often undertake the administration of their estate to distribute the deceased’s assets. However, depending on the size or complexity of your loved one’s estate, your family’s case may involve various types of estate administration. The experienced attorneys at Patrick, Harper & Dixon can help you understand the nature of your role and guide you through the process. Contact us today to get started.
Understanding Estate Administration
Estate administration refers to the process of winding up a deceased individual’s affairs and distributing their estate to their heirs and beneficiaries. Estate administration begins when a person petitions the court for appointment as the executor or administrator of a decedent’s estate. If the decedent left a will, the petitioner may also ask the court to admit the will to probate, which means the court has approved the document as the decedent’s valid last will and testament and estate administration can begin.
During estate administration, an executor or administrator must gather, inventory, and value the decedent’s estate assets, pay the decedent’s remaining debts, estate administration expenses, and estate taxes, and distribute the remaining assets to beneficiaries as directed by the decedent’s will or the decedent’s heirs under the state’s laws of intestate succession.
However, the purpose or process of estate administration may depend on the type of proceeding. Personal representatives or families may pursue various types of estate administration, depending on the nature of the decedent’s estate.
Formal Probate Administration
Formal probate administration represents the primary court proceeding in an estate administration. A decedent’s estate may require formal probate administration when their estate contains significant assets, such as real estate or personal property/investments with a high aggregate value. A case may also require formal probate administration if an heir, beneficiary, or another interested party initiates a legal dispute, such as a will contest or a challenge to the personal representative’s appointment. Often times, formal estate administration is also required when there are assets titled in the decedent’s name which cannot be otherwise transferred to heirs without the authority of an executor or administrator appointed by the court.
The formal probate administration will occur in the county where the decedent established their domicile before their death. Court supervision in a formal probate administration may only involve the court’s appointment of a personal representative and its review of the personal representative’s final accounting when they petition to close the estate. However, legal disputes may require closer court supervision, including regular accountings or hearings to resolve disputes.
Summary/Simplified Administration
For smaller estates, families may have the option to pursue summary or simplified administration, which can facilitate the distribution of a decedent’s estate assets without the need for formal probate. North Carolina has three kinds of summary or simplified administration:
- Petition and Assignment of Year’s Allowance – A surviving spouse can petition the court to take ownership of up to $60,000 of their deceased spouse’s personal property for a year’s allowance to pay for living expenses. A decedent’s surviving children can also receive $10,000 each from their parent’s personal property if they are under the age of 21.
- Affidavit for Collection of Personal Property – When a decedent passes away with an estate with a gross value of $20,000 or less, a family member or interested party can file an affidavit to collect the decedent’s estate and distribute it to their heirs or beneficiaries.
- Summary Administration – A surviving spouse can petition for a summary administration if they know of all their deceased spouse’s debts and the decedent’s will names the surviving spouse as the sole beneficiary of their estate.
Ancillary Probate
When a decedent owns property in multiple states, the executor or administrator of their estate may have to open ancillary probate cases in states other than the state of the decedent’s domicile where they owned property. The state court overseeing the primary probate case cannot order the disposition of property located in other states. Instead, the personal representative must open ancillary probates to obtain orders from the courts in those states.
Intestate Estate Administration
An intestate estate administration occurs when a decedent dies without a will. When a person does not leave a will, an interested party, such as a family member, can petition the court for appointment as the administrator of the decedent’s estate and to open an estate administration. An administrator has the same duties in an intestate estate administration as an executor would in a formal probate administration. However, rather than distributing the decedent’s estate to beneficiaries named in their will, an administrator in intestate estate administration must distribute the estate as directed by state intestacy law, which identifies a decedent’s next of kin and determines how much of the estate each heir can inherit.
Alternatives to Estate Administration
Individuals can create an estate plan that may simplify estate administration and avoid much of the time and expense of formal probate. Estate planning tools that can provide an alternative to estate administration include:
- Living Trusts – A person can distribute inheritances to loved ones or beneficiaries without going through estate administration by placing their assets in a living trust. Through the trust document, an individual can direct the disposition of trust assets to designated beneficiaries.
- Joint Tenancies – Individuals may own real estate or other types of property in a joint tenancy with the right of survivorship or tenancy by the entirety, under which a deceased co-owner’s interest automatically passes to the surviving co-owner(s).
- Beneficiary Designations – Life insurance policies and retirement or pension accounts may have beneficiary designations that direct the payment of benefits to a designated beneficiary after the policy or account holder’s death.
- Payable/Transfer-on-Death Designations – A person may place a payable/transfer-on-death designation on a bank or brokerage account to instruct the financial institution to distribute the assets in the account or transfer control of the account to a designated beneficiary upon the account holder’s death.
Contact Our Firm for Experienced Guidance
After a loved one has passed away, an experienced estate administration attorney can guide you through the various procedures you must follow to resolve your loved one’s affairs and distribute their estate to your family and your loved one’s other beneficiaries. Contact Patrick, Harper & Dixon today for an initial consultation to learn more about the various types of estate administration and whether they may apply to your case.
