North Carolina Small Estate Administration

“Small Estate Administration “may be an option for small estates, both testate (with a Will) or intestate (without a will).  For eligible estates this allows the heirs to receive the property to which they are entitled under the Will or the Intestate laws of North Carolina with an abbreviated proceeding known as “Collection by Affidavit.” It is simpler, easier and a less expensive method.

In order to qualify for this proceeding, the North Carolina estate must be valued at less than $20,000.00 ($30,000.00 if the sole heir is the surviving spouse). Thirty (30) days must have passed since the date of death. The decedent’s personal property (assets passing through probate including bank accounts, cars and personal proeprty), less liens, encumbrances must not exceed $20,000.00. The stated dollar amount does not include real property.

In addition, some types of property do not go into the estate and therefore are not considered when determining is a Small Estate Affidavit is an option. For example, property with a named beneficiary, such as a retirement plan or insurance policy, is not included in the estate. These assets transfer to the person named as beneficiary outside of the probate process.

When qualifying as the Collector, the responsible person is agreeing to pay all of the debts of the estate up to the amount of the assets of the estate. In other words, this abbreviated proceeding is not intended to bypass creditors. In fact, if a creditor is ignored, that creditor can come forward and ask the probate Clerk to transfer the estate from a “Small Estate Administration” to a traditional Probate Administration so that the creditor will be protected. In addition, if real property will likely be brought into the estate and sold to pay debts of the estate, a formal proceeding with notice to creditors may be necessary and a Small Estate Affidavit is not the correct procedure.

Once the application is completed and approved by the Clerk of Court, the applicant (the “Collector”) is appointed to handle the collection and distribution of the assets of the decedent without having to go through a formal probate process. A death certificate and the original Will, if there is one, is required as well as a complete description of the assets and their values.

After qualifying the Collector pays estate debts according their statutory priority, then distributes the remainder of the personal property, if any, to the persons entitled to it by Will or according to the Intestate Succession Act. Finally, the Collector files the Closing Affidavit with the Clerk showing all collections (income), disbursements (payments of valid estate debts) and distributions of the personal property.

Generally, a Collection-by-Affidavit saves both time and money in comparison to a formal probate.  For instance, a bond and a notice to creditors are not required in a Collection-by-Affidavit.  In fact, this process is specifically designed to be fast and the Closing Affidavit is required to be filed within 90 days of the qualifying affidavit (extensions are allowed).

Discussing the matter with one of the attorneys at Law Firm Carolinas in Greensboro or Charlotte can assist you in evaluating whether an estate would be best administered as a small estate or with a full administration. A clear analysis of the best method at the onset will help avoid costly mistakes down the road.

Estate Planning & Admin