Denise Knows Probate!
Probate is the legal process of administering a deceased person's estate, ensuring that their assets are distributed according to their will or state laws. In some cases, when a decedent owned real estate in multiple states, ancillary probate may be required.
This article aims to explain what an ancillary probate proceeding is and provide a step-by-step guide on how to file an ancillary probate in North Carolina.
What is Ancillary Probate?
Ancillary probate is a supplementary legal process that may be necessary when a deceased person, also known as the decedent, owned property in a state other than their primary residence.
When the person who died, owned out of state property it can sometimes lengthen the probate process.
The primary probate proceeding typically occurs in the state where the decedent was domiciled, and ancillary probate becomes necessary to address out of state property.
In the context of North Carolina, if the decedent lived outside of North Carolina but owned real property (such as real estate or land) in North Carolina, ancillary probate would be required to facilitate the transfer of those assets to the designated beneficiaries.
For instance, if Jane Doe, a resident of Virginia, owned a beach house in the Outer Banks of North Carolina, and she passed away without incorporating this property into a trust or jointly titling it with rights of survivorship, her heirs would likely need to undergo ancillary probate to transfer ownership of the beach house.
Similarly, if John Smith, living in Georgia, had a classic car collection stored in a garage in Charlotte, North Carolina, and did not have a comprehensive estate plan covering these assets, his estate would face the complexities of ancillary probate to rightfully distribute or sell these vehicles.
So we can see that owning out of state property may cause additional steps to complete the probate proceeding.
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Steps to File Ancillary Probate in North Carolina:
Determine Jurisdiction: Identify the county where the property is located. Ancillary probate is typically filed in the county where the property is situated.
Hire an Attorney: While not mandatory, seeking the assistance of a probate attorney is highly recommended. An attorney with expertise in North Carolina probate laws can guide you through the process and ensure all legal requirements are met.
Collect Necessary Documents: Gather essential documents, including the decedent's will, death certificate, and any relevant legal documents related to the North Carolina property.
Open an Ancillary Probate Estate: Initiate the ancillary probate process by filing a petition with the North Carolina probate court. The petition should include details about the decedent, the property in question, and the reason for ancillary probate.
Notice to Heirs and Beneficiaries: Provide notice to heirs and beneficiaries as required by North Carolina probate laws. This typically involves notifying interested parties about the probate proceedings.
Inventory and Appraisal: Prepare an inventory of the decedent's assets in North Carolina, including the property subject to ancillary probate. An appraisal may be required to determine the value of the assets.
Pay Debts and Taxes: Address any outstanding debts and taxes associated with the property. This step is crucial before distributing assets to beneficiaries.
Transfer of Property: Once all legal requirements are met, the court will authorize the transfer of the property to the designated beneficiaries according to the decedent's will or state laws of intestacy.
Closing the Ancillary Probate Estate: File the necessary documents to close the ancillary probate estate once all tasks are completed. This may involve submitting a final accounting of the estate's activities.
Tips to Prevent Ancillary Probate Proceeding
Here are some strategies to help you avoid the pitfalls of ancillary probate in North Carolina:
1. Transfer Ownership
Transfer the ownership of the property into a living trust. Assets in a living trust bypass the probate process entirely. This means that upon the death of the trust's creator (settlor), assets within the trust can be distributed directly to the beneficiaries without the need for probate.
2. Joint Ownership
Consider holding property in joint tenancy with the right of survivorship. When one owner dies, the surviving owner automatically receives the deceased's share of the property without probate.
3. Lady Bird Deed
In North Carolina, a "Lady Bird" deed can be an effective tool to avoid probate. This type of deed allows the owner to retain control over the property during their lifetime, and upon their death, the property is immediately transferred to a named beneficiary.
4. Beneficiary Designations
Similar to retirement accounts or life insurance policies, it's possible to have a Transfer on Death (TOD) or Payable on Death (POD) designation for vehicles and other accounts. This automatically transfers ownership upon the original owner's death, thus avoiding probate.
5. Gifting Property
If feasible, consider gifting the property before death. There are tax implications to gifting, so it's wise to consult with an estate planning attorney before going this route.
6. Make Use of Small Estate Proceedings
In some circumstances, if the value of the property in North Carolina meets the criteria for a “small estate,” it may qualify for a simplified probate process which is quicker and less expensive.
Why Avoid Probate Altogether?
The primary reasons to avoid ancillary probate are to save time, money, and hassle. Ancillary probate can:
Increase legal fees
Create additional court costs
Complicate the executor's duties
Delay the distribution of assets to heirs
The key to avoiding probate is to engage in proactive estate planning:
Review and update your estate plan regularly.
Consult with a knowledgeable estate planning attorney who understands the intricacies of North Carolina's probate laws.
Communicate your estate plan clearly to all family members involved.
Conclusion:
Ancillary probate can be a complex and costly process, but with careful planning, it can often be avoided altogether. By exploring the strategies outlined above and seeking professional legal advice, you can streamline the estate settlement process in North Carolina and provide peace of mind for yourself and your loved ones.
Remember, each estate is unique, and what works for one family may not be the best choice for another. It's essential to tailor your estate planning to fit your specific situation. If you need assistance with your estate planning or have questions about ancillary probate in North Carolina, consider reaching out to a local estate planning attorney.
Loss is never easy, but managing what comes after doesn't have to add to your burden. Prepare wisely, plan ahead, and give yourself — and your family — the gift of a smoother transition in difficult times.
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Denise Harper Davis
252-902-9006
Realtor | Investor | Certified Probate Real Estate Specialist
If you need a realtor to help you sell a home you inherited, a home included in probate or maybe you just want to sell a home you own, contact me. I am a NC realtor and together we will discuss the best options to get your home sold. Whether it's a quick cash offer or listing it on the market for top-dollar, I can help you!
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📌 Disclaimer: The above information is for informational purposes only and does not constitute legal advice. Consult with a qualified attorney for personalized guidance on your specific situation.