understanding instestacy in north carolina

UNDERSTANDINGINTESTACY IN

NORTH CAROLINA

CHERYL K. DAVID

North Carolina Estate Planning and Elder Law Attorney

A Look at Some Commonly Asked Questions that Many People Have About Intestate

Estates in North Carolina

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Understanding Intestacy: Part 2 www.cheryldavid.com 2

In our second white paper on

intestacy in North Carolina, we’re

going to take a look at some

commonly asked questions that

many people have about intestate

estates. Unfortunately, because so

many people fail to create a last will

and testament, the chance that you

will have to deal with the insolvent

estate of a deceased family member

is rather high. If and when that

time comes, it’s important to know

as much about insolvency as

possible. It’s also good idea to

better understand what happens to

insolvent estates because you can

gain a better appreciation of what

benefits you and your family will receive if you decide to avoid intestacy by

creating an estate plan.

INTESTATE ESTATES AND ESTATE DEBTS

One of most commonly asked questions people have when someone dies intestate

involves the question of who is responsible for paying any unpaid bills. When a

person dies and leaves behind debts, those debt obligations must still get repaid.

Will the spouse have to repay these? The children who inherit property from the

decedent’s estate? Someone else?


There is no single answer to this question, but in the vast majority of situation the

family members who survive a deceased person will not have any legal obligation

to repay unpaid debts. Those debts must be paid through the estate during the

probate process.

For example, let’s say you are an adult whose father is still alive but whose

mother has passed away. Your father dies leaving behind a sizable estate, but

does not leave behind a last will and testament or any kind of estate planning

device. Since you are the only child and there are no other living relatives, you

stand to inherit the entire estate.

However, your father also left behind some substantial debts. He still has a

sizable mortgage on his home, as well as several personal debts.

In this situation you would not be responsible for paying the mortgage or any

other debts. Instead, the personal representative who represents the estate will be

responsible for paying those obligations. Once probate begins, the personal

representative will notify any potential creditors that the estate has been opened.

Those creditors will then have a duty to contact the estate and file a claim for any

unpaid debts they believe they are owed. The personal representative will then

review these claims and pay them in a specific order as determined by North

Carolina law.

If, after reviewing and paying all the claims, there is still something left in the

estate, you will then be entitled to inherit that property. However, if the debt

obligations exceed the value of the estate assets, not only will you not receive an

inheritance, but some of those debts will have to go unpaid.


The only situation in which you might be responsible for paying an estate debt is

if you entered into a joint debt agreement with your father. For example, if you

signed as a cosigner on the mortgage, you would still be responsible for paying

the mortgage regardless of whether you received an inheritance or if there was

enough money in the estate.

TAKING POSSESSION OF PROPERTY

In many intestate estate situations, the person who dies does not leave behind a

lot of property. In such situations there really isn’t a great need for probate, or for

someone to go to court to ask for permission to begin the estate settlement

process. In these situations, people inheriting from the estate can submit an

affidavit to claim their inheritances.

However, in situations where a deceased person has left behind substantial

assets, someone will have to manage the property. Because the decedent did not

leave a last will and testament, there is no clear guidance as to should take on this

responsibility.

In such situations it typically falls to a close family member or friend of the

deceased to begin the probate process. You do this by going to the local county

courthouse and filing the appropriate documents to open a new case. Once the

Clerk of the Superior Court—the North Carolina version of the probate court

judge—receives the petition to open the new estate, the clerk will then appoint a

personal representative.


This personal representative is typically the person who filed the probate petition.

If the court approves, it will issue

a legal document called “letters

testamentary.” These letters give

the personal representative the

legal authority to begin taking

control over the decedent’s estate

in order to determine what should

happen to it. The personal

representative will also have the

legal responsibility to manage the

property until such time as new owners can take possession.

AVOIDING INTESTACY

If there is a single lesson to take away from our discussion of intestacy issues in

North Carolina, it’s this; intestacy is avoidable. Even by creating a very simple

estate plan that contains only a small number of tools, every capable adult in the

state of North Carolina can leave behind an estate that doesn’t have the

unanswered questions left behind by people who die intestate.

For example, a simple last will and testament will not only allow you to make

inheritance choices, but it will also allow you to name an executor. The executor

is simply a personal representative that you choose.

Instead of leaving it up to someone to choose to open the estate, appointing an

executor will give you the ability to choose someone with whom you feel


comfortable, someone you know will be responsible when handling your affairs

after you die.

What’s more, other estate planning devices, such as revocable living trusts, will

give you much more flexibility when choosing inheritances and representatives.

Through a revocable living trust, for example, you can largely avoid the probate

process and the procedures that come with it.

Of course, choosing to create an estate plan is one thing, while actually creating a

plan that meets your needs is entirely another. If you’d like more information

about intestacy, estate plans, and what you can do about it all, contact our office

as soon as possible.


ABOUT THE AUTHOR Cheryl David is a graduate of UNC-Chapel Hill, the University of Baltimore School of Law, and the prestigious Trial Lawyer’s College presided over by Gerry Spence. A former Administrative Judge, Cheryl is certified as an Estate Planning Law Specialist by the ABA accredited Estate Law Specialists Board, Inc. She is also a member of the American Academy of Estate Planning Attorneys, Medicaid Practice Systems and the National Academy of Elder Law Attorneys.

In 2008, Cheryl received the honor of becoming a Fellow with the American Academy of Estate Planning Attorneys.

The Fellow program recognizes Academy Members who demonstrate advanced expertise and significant practical experience in the total estate planning, trust, tax planning, guardianship, probate and estate administration fields. In order to maintain this advanced expertise, Cheryl takes over 36 hours of continuing education in Estate Planning, Elder Law, and Taxation each year. Also a Financial Planner, she holds the Series 7 and 66 Investment Licenses in addition to both Insurance and Long Term Care/Medicare designations.

Her professional capabilities, together with over 25 years in practice, have combined to bring positive change to the lives of over 4500 clients and their families.

528 College Road Greensboro, NC 27410 Phone: (336) 547-9999 Fax: (336) 547-9477

WWW.CHERYLDAVID.COM

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