What Are The Steps of Probate?
Losing a loved one is difficult. You go through so many emotions – grief, despair, anger and fear to name a few. You notify loved ones and make funeral arrangements. Now you have to start the probate process. But, you have no idea where to begin. Exactly what are the steps of probate anyway?
Probate, otherwise known as estate administration is the formal process of managing and distributing a deceased person’s assets. Here in North Carolina, the Probate process is carried out through the County Clerk of Court. Other states have probate judges who are elected to oversee probate matters.
Step One: Grieve
Take the time to grieve. Many people think they need to immediately contact a lawyer when someone dies. I tell my potential clients that unless there is an emergency where we must start probate immediately, they need to grieve. Losing someone is a traumatic experience. You go through a slew of emotions. You need to process those emotions so that you can clearly think and most importantly, begin the healing process. Financial matters can wait. Creditors tend to be very understanding when a loved one dies. Your focus should initially be on you. When you are ready, you can begin the next step.
Step Two: Meet with Probate Lawyer
When you are ready and feel like you can start the probate process, schedule a meeting with a probate lawyer. Be sure and find someone with whom you are comfortable with and like. You will be discussing a lot of private matters with this person. You want to find someone who will give you good advice and offer you a shoulder to cry on if needed.
At that initial meeting, bring the following documents with you:
- The original will;
- Paid funeral bill;
- Certified copy of death certificate;
- Financial information – bank accounts; financial/investment accounts
- Copy of life insurance policies;
- List of assets belonging to your loved one;
- Copies of vehicle titles;
- Addresses of all real estate owned by your loved one; and
- List of any known creditors of your loved one.
Your probate attorney will want to see, and most likely make copies of, these documents. He or she will then review the will and guide you on how assets are to be distributed. You will learn what your roll as Executor entails. He or she will tell you what happens at probate court and what you will need to begin the process. Lastly, he or she will discuss with you whether you would like to engage his or her legal services.
Step Three: File the Will
Next, you will officially apply to Probate Court to be appointed as the fiduciary. If there is a Will, you will be appointed as the Executor. If no Will, then you will be appointed as the Adminstrator.
To get started, you will need to prepare and present the Probate Court with an Application requesting to be appointed as either the Executor or Administrator. In that Application you will list all beneficiaries, known assets belonging to the deceased person; estimate value of those assets and whether or not those assets were owned jointly or individually.
If there is a Will, you will present the Original Will to the Clerk who will then make sure the Will is valid in North Carolina. You will also need to bring the following documents with you:
- Certified copy of death certificate;
- Paid funeral bill receipt;
- Fiduciary Application.
The Clerk will review all of the documents. If you do not bring an executed Oath, the Clerk will officially issue the Oath to you. If everything is in line, the Clerk will issue you Letters. These Letters will enable you to conduct business on behalf of your deceased loved one.
Step Three: Track Down Assets
With your Letters of Athority, you will then begin tracking down assets belonging to your deceased loved one. You will need:
- Copies of all bank statements owned by your loved one during the month he or she died;
- Date of Death balances from the bank of those accounts;
- Copies of signature cards if accounts were jointly owned or transfer on death;
- Copy of real estate value from the County Property Records;
- Kelly Blue Book Value of any Vehicles;
- Values of all assets belonging to your loved one;
- Any investments, stocks, bonds that belonged to your loved one with no beneficiaries, including date of death value; and
- Copies of any uncashed checks made payable to your loved one.
You will need this information and documents so that you can complete the Inventory for the Estate.
Step Four: Notify Creditors
Start contacting any known creditors such as mortgage companies, credit card companies and medical providers. Let those creditors know that your loved one has died. Sometimes the creditors will forgive the debt. If not, you can try to negotiate with those creditors. Most will accept pennies on the dollar. Let them know that you have opened up an estate.
You will also need to publish a Notice to Creditors ad in a local newspaper. This ad will advise that your loved one has died; advise of the date of death; that an estate has been opened and that you have been named as the Executor or Administrator of the Estate. Most importantly, the ad will set a final deadline for all claims to be filed. If any claims are received after that deadline, those claims are barred.
Once the Newspaper has run the Creditor Claim ad for three (3) consecutive weeks, you will receive an Affidavit of Publication.
Step Five: File the Inventory
Within ninety days of opening up the Estate, you must file a 90 Day Inventory with the Probate Clerk. The Inventory looks very similar to the Application. You will list all discovered assets belonging to the estate. You will also list the actual values of those assets at the time of death.
With this filing, it is advisable that you file the Affidavit of Publication. You will also want to file an Affidavit of Notice to Creditors.
Step Six: Wait
Once these documents are filed, you wait for the ninety day creditor deadline to pass. If you receive any creditor claims within this 90 day period, you should attempt to settle those claims. You cannot close out an estate until either a creditor files a satisfaction of its claim or withdraws its claim. Again, most creditors will negotiate. Once you have resolved those claims, you can begin the estate winding up process.
If you do not receive any claims after the 90 day period, you can begin winding up the estate.
Step Seven: Make Distributions
Now you will begin distributing assets to the Will’s beneficiaries. You will have every beneficiary sign a Receipt acknowledging their receipt of the item and its value. You will need this Receipt to present to the Clerk.
When you have disbursed all assets to all the beneficiaries, make sure you close out the estate account. Additionally, you will need copies of all bank statements from date of death until the accounts are closed. When closing out an estate account, it is always best to request a certified check so you do not have to wait for a check to clear the bank.
Step Eight: File Final Account
Next, you will then prepare the Final Account. Think of the Final Account like a checkbook register. You are going to show all assets received by the Estate; all payments made by the Estate and all Distributions to Heirs.
You will start the Final Account with the 90 Day Inventory Balance. Then, you will list all assets received by the Estate after your loved one’s date of death. You will list the values of those assets. Those values are added to the Inventory Balance.
Next, you will list all payments made by the Estate after the deceased person died. You will list the amounts, to whom the payment was made and the purpose of those payments. You will then subtract those values from the Ninety Day Inventory Balance.
Then, you will list all the distributions you made to the heirs. You will list the 90 Day Inventory value for those assets. Then, you will subtract the total Distributions balance from the 90 Day Inventory Balance. You should arrive at a $0 balance for the Final Account. If you did not, you need to redo your math. You cannot close out the Estate without a zero balance.
Finally, you will take the Final Account and Signed Receipts with you to Probate Court. Once approved, you will be officially released from your fiduciary duties. The Estate will. then be closed.