A NON-RESIDENT DIES OWNING PROPERTY IN NC---WHAT TO DO

When a decedent has an estate administered in another state, but has property in North Carolina, an ancillary administration will allow the assets in North Carolina to be administered.

Black's Law Dictionary defines Ancillary Administration as "probate taken out in a second or subsequent jurisdiction to collect assets or to commence litigation on behalf of the estate in that jurisdiction."

Procedure Generally

Once the Clerk's office determines that an ancillary administration should be set up in North Carolina, the Clerk's office must also determine if the will meets North Carolina probate requirements.  In order to pass title to real property to the beneficiaries in a decedent's will, the will must be admitted to probate pursuant to the laws of North Carolina.  An ancillary personal representative will appointed to administer the assets of the estate.  Once an Ancillary Personal Representative is appointed, the estate will be administered just as an estate originally opened in North Carolina.  

Ancillary Personal Representative

Once the Clerk determines that an administration should be set up in North Carolina, someone will need to be appointed to handle the affairs.  

If there is a will, an Ancillary Executor will be appointed, and an Ancillary Administrator will be appointed for all other personal representatives.  

If there are multiple people who want to be the Ancillary Personal Representative, the statute governs this priority:  a) executor named in the will b) personal representative already appointed in the state where the decedent lived c) any other person who is not disqualified if 90 days have passed since the decedent's death, or 60 days have passed since the qualification of the personal representative in the state where decedent lived, whichever is shorter.  

When is Ancillary Administration not required?

a.  If there is no estate opened in the state where the decedent lived, a non-ancillary full estate administration or any other option that is appropriate that is not a full administration may be opened in any proper county, per the venue requirements, in North Carolina.

b.  If sixty days have passed since the decedent's death an no estate proceedings are pending in North Carolina, any resident of North Carolina that is in possession of a non-resident decedent's personal property may deliver the property to the Personal Representative in the state in which the decedent lived.  

If it is determined that an ancillary is required, an attorney should be consulted to ensure that nuances of distributing assets and accounting issues that are unique to Ancillary Administrations can be properly addressed.

CAN I MAKE SURE MY WILL IS VALID WHILE I'M STILL LIVING?

Probating ones' estate after death can be a lengthy, time consuming process that has the potential to financially and emotionally drain the family members of the deceased.  Until recently, wills and codicils to wills were not declared valid or invalid until after death.  Recent changes by the North Carolina Legislature to the statute provides that a testator (the person executing the will) can now ask the court to declare, prior to their death, that their will is valid.  This process is only available in a few states and is now available in North Carolina through Senate Bill 336.  

Who may file?  

Anyone who is a resident of North Carolina and who has executed a will or codicil may file a petition with the Clerk's office.  The person who files to have their will declared valid is called the Petitioner.

How does it work?

The Petitioner must provide evidence to the Clerk of Superior Court to establish that the will or codicil would be admitted to probate if the Petitioner were deceased.  If an interested party contests the will or codicil, the Clerk will transfer the matter to superior court as if it were a caveat proceeding.  If no interested party contests the validity of the will or codicil and if the Clerk determines that the will or codicil would be admitted to probate if the Petitioner were deceased, the Clerk will enter an order stating that the will or codicil is valid.  

Where should the Petitioner file?

The Petitioner must file in the county where the Petitioner lives.  

What should the petition say?

1.  a statement that the Petitioner is a resident of NC and specifying the county of the Petitioner's residence

2.  a statement that the Petitioner had testamentary capacity at the time the will was executed

3.  a statement that the Petitioner was not under undue influence and duress

4.  a statement identifying the Petitioner and all interested parties

What is the effect of a declaration by the Court?

If the Court enters a judgment declaring that the will or codicil is valid, this is binding on all interested parties.  All parties will be barred from challenging the will or codicil in a caveat proceeding when the will or codicil is entered into probate after the Testator's death.  

This change to the statute is a great tool to make a preemptive move to streamline the probate process for the Testator's family.  There are many other estate tools that will serve to make the probate process more manageable, and an experienced estate attorney can make these tools available.

 

THE DEFENDANT IS AVOIDING SERVICE...WHAT DO I DO?

Filing your lawsuit is hard enough and getting it served in North Carolina should be a straightforward process, but savvy defendants have found ways to dodge your attempts so far. You attempted certified mail, and got no signatures back. The sheriff said they are unable to serve, and you have already spent too much time and money sending the sheriff out. You have thought about posting an ad in the newspaper, but sometimes legal ads will not achieve the remedy you desire or deserve. An experienced creditors’ rights attorney knows how to assist you in finding appropriate options for serving your defendant.

Please consult an attorney before considering your next step.

I HAVE A JUDGMENT...NOW WHAT?

Someone owes you money. They don’t pay. You take them to court. You win your case! You think, “Great! We’ve reached the end. Victory!” Unfortunately, it’s not that simple.

The fact is, a judgment can be the beginning of a long and frustrating road for a lot of people. Here’s why:

When you win your case against someone who owes you money, you come away with a legal, public document called a judgment. This public document serves as an official record stating who owes whom and by how much. It’s an important document to have if you ever hope to collect, but it isn’t enough to enforce the actual collection – and that’s an important distinction to remember. Nine times out of ten, a debtor doesn’t come forward willingly, and in those cases, the plaintiff will have to take additional steps to recover the debt. There are several legal mechanisms an attorney who is experienced in creditors rights will be able to use in order to collect on your judgment. These include attaching the judgment to the debtor’s bank accounts, forcing the sale of the debtor’s personal property, and possibly sometime in the not-so-distant future, the garnishment of wages – an option that current isn’t available in the state of North Carolina.

Your best bet – prepare yourself for the wait. These are complicated legal processes and you should always consult an attorney prior to considering these options.

My Minor Grandchildren Reside with Me…is Legal Guardianship Appropriate?

This question comes up frequently in the context of school-aged children who may live with a grandparent or aunt, uncle, or someone other than their natural parents. Schools will often send grandparents, etc. to the courthouse to file for guardianship so there is some proof on record as to who has decision-making authority over the child’s well-being. Unfortunately, this often results in a wasted trip and confusion.

In North Carolina, a “guardian” is someone who is appointed by the Clerk of Superior Court to make decisions for an incompetent adult. Once the court has determined someone incompetent, the court refers to this person as “the ward.” There are three different types of guardians for incompetent adults.

A Guardian of the Person makes decisions about the ward’s personal welfare, such as their living arrangements and medical plans and decisions.

A Guardian of the Estate can make decisions about the ward’s finances, such as paying bills, investing monies, etc.

A General Guardian is a combination of both the Guardian of the Person and the Guardian of the Estate, and has authority over both the ward’s personal and financial decisions.

North Carolina guardianship procedures do not provide for the needs of minor children, except in very limited circumstances. A minor cannot be appointed a Guardian of the Person or a General Guardian, unless 1) both natural parents are deceased, or 2) the court has terminated the parent’s parental rights. However, the Clerk of Superior Court may appoint a Guardian of the Estate for a minor child in cases where the child requires a guardian to manage an inheritance or life insurance proceeds from a deceased family member.

North Carolina guardianship practices are primarily geared towards adults, with a few exceptions. The law, however, does address the needs of minors through the custody procedure when minor grandchildren reside with a grandparent, and at least one natural parent is still living.

WHAT CAN YOU DO TO PROTECT YOUR ELDERLY PARENTS' ASSETS?

Did you know that we’re only a few decades away from having the highest number of senior citizens in the U.S. that we have ever seen? According to the Pew Research Center, by 2060 there will be just as many people over the age of 85 as under the age of 5. While this dramatic shift is happening around the world, the trend is far more pronounced in the U.S., largely due to longer lifespans and lower birth rates. Longer lifespans mean ballooning health care costs and depleting retirement savings, and in some cases, these will put additional strain on adult children.

If you have elderly parents, you may be asking – “how can I protect my elderly parents’ assets in the event they are unable to make financial decisions for themselves?”

The simplest safeguard is for aging parents to set up a ‘Power of Attorney’. A Power of Attorney is a legal document in which person A appoints person B to act on their behalf. In the event that one or both parents are incapacitated, a Power of Attorney grants authority to the person of the parents’ choosing to deal with financial decisions. Parents will often appoint a son or daughter to serve as their Power of Attorney. With a Power of Attorney in place, you can rest assured knowing you have the legal authority to protect your parents’ assets should they become incapable of making financial decisions for themselves.

What if your parents are unable to make financial decisions for themselves and don’t have a power of attorney already in place?

You may have to consider petitioning to the Court to be appointed Guardian of the Estate. In North Carolina, Guardians of the Estate are appointed for the purpose of maintaining a person’s property, estate, and business affairs. This process is more lengthy and cumbersome than obtaining a Power of Attorney, but becomes necessary if it is too late to obtain a Power of Attorney. As the Guardian of the Estate, you will have the ability to, among many other powers allowed under the law, receive assets due to your parents, abandon or relinquish rights in property under certain circumstances, take possession of your parents’ assets for their benefit, vote shares of their stock and many others. You will need the court’s permission to be the Guardian of the Estate and the court will require that you provide a regular accounting of all monies in and out of the estate.

Fortunately, you can protect your parents’ assets if they become unable to do so. The key is to have those conversations before situations arise.

AVOIDING PROBATE WITH RELATIVE EASE

One of my favorite legal quotes is by J.J. Childers:

“There’s hell, and then there’s probate.”

While certainly not as hopeless as the Chancery Court portrayed in Dickens’ Bleak House, the probate process required in the absence of a valid and well-designed estate plan is inevitably time consuming, expensive, and stressful for the ones left behind. If you do not have an estate plan, or if your current plan is limited to a simple will, your assets will be subject to the probate process and your loved ones will be left subjecting their time and privacy to the Clerk of Superior Court.

Fortunately, there are several options available that may allow you to avoid probate altogether.

Joint Accounts with Rights of Survivorship

Title(s) to assets held in joint tenancy pass automatically at the death of one joint tenant to the others. The only time there is a need for probate is if all joint tenants are deceased. This is a simple, yet effective way to transfer assets in bank accounts, vehicles, or real estate outside of your estate without having to go through the laborious probate process or pay fees to the office of Clerk of Superior Court.

Payable on Death Accounts (Totten Trusts)

With a Payable on Death (POD) account, any beneficiary can be named, including a minor.  At death, assets held in the POD account automatically transfer to the beneficiary of the account without going through the probate process. One drawback to this tool is that your creditors are allowed to access assets held in POD accounts in the event that probate assets are insufficient to satisfy amounts owed.  During your lifetime, a POD account allows you to draw interest on the account, while leaving the principal intact. The beneficiary of a POD account has no rights to funds in the account until after your death.

Living Trusts

A living trust takes assets owned by a living individual (the “Grantor”) and transfers the title of those assets to the control of the trust. At the time of the Grantor’s death, or at some other time specifically defined by the Grantor in the trust agreement, title of the assets held in trust are passed to the trust’s beneficiaries without having to go through probate. The Grantor, particularly under a Revocable Living Trust, maintains control over the trust, such as in designating the Trustee and in determining when and how assets will be distributed to the beneficiaries.

Gifting Assets Prior to Death

As parents age, they often choose to gift assets to their children as a way to avoid the probate process. This approach is favored by those who wish to exercise their authority in determining who gets what, when they get it, and what they do with it. However, the person making the gift is responsible for paying applicable federal gift tax. For the year 2014, federal tax law permits transfers of up to $14,000 each to as many people as the giver desires without triggering any federal gift tax. This option provides a significant annual opportunity to transfer assets to the next generation during your lifetime while avoiding probate and potential estate tax.

DO I HAVE TO ACCEPT INHERITANCE THAT WAS LEFT TO ME IN SOMEONE’S WILL? (RENUNCIATION)

This question does not typically arise when someone finds out they have been left an inheritance. However, some circumstances may make an individual choose to renounce their interest in a person’s will. Depending on the inheritance and what state the decedent lived in, there can be hefty taxes, including inheritance taxes, estate taxes, and income taxes. Avoiding the payment of abundant taxes is just one reason someone may wish to renounce his inheritance. If an individual does not want to accept an inheritance, he does not have to. However, legal steps must be followed to validly renounce those rights.

What Can I Renounce?

A person living in North Carolina can renounce (1) an entire inheritance or part of an inheritance; (2) any interest in or power over property; (3) a fractional share, unless the decedent expressly provided otherwise in his will; and (4) an intestate share.

How do I Renounce?

In North Carolina, the renunciation must: (1) be in writing and name the transferor of the property; (2) describe the interest being renounced; (3) declare the extent of the renunciation; and (4) be signed by the person renouncing. The document typically must be filed within nine months of the decedent’s death in order to be valid. The copy of renunciation may be delivered in a number of ways, such as in person, through first class mail, fax, email, etc. It is also necessary to be aware of the location that the document must be filed, which depends on what type of property is involved.

What is the Effect of Renunciation?

Renunciation is binding in North Carolina. In other words, once a person files a signed copy, he cannot change his mind and revoke the decision. This is a permanent decision that should not be taken lightly. Therefore, it may be a good idea to contact an attorney and discuss all of your options before choosing to renounce your rights to an inheritance.

HOW DO I CHANGE MY WILL?

Major changes in our lives are constantly taking place, whether it be a divorce, the birth of a new grandchild, or receiving a large inheritance. These events tend to cause chaos, but amongst the chaos, it is important to remain practical and consider the impact that these events will have on the future. After a major life event, it is always a wise decision to ensure that your estate plans still match your wishes. If you do find yourself in a situation that requires a revision of your current will, there are a couple of options to keep in mind.

Two Options: Execute a Codicil or Revoke your Current Will

The first option is to execute a codicil. A codicil is a document designed to modify a previously written will. A codicil must meet all the requirements of a valid will. Simply “crossing out” passages or adding new provisions in your current will is not the answer. A codicil is executed similarly to an original will. However, depending on how substantial the necessary changes are, it may be advisable to execute an entirely new will rather than making multiple changes of significant details.

The second option is to fully revoke your will. A will may be revoked only by a subsequently written will or by being burnt, canceled, obliterated, or destroyed with the intent of revoking it. Additionally, a will may only be revoked by the person who wrote the original will. It is necessary to include a section that states that all previous wills are revoked. If this is not done, and there is a misunderstanding concerning which will should apply over the other, and therefore the court may not honor it in the way you intended.  

When Should I Consider Changing My Will?

Take time to consider the following major life changing events when determining whether a will revision is necessary: a recent marriage or divorce; the birth of a child or grandchild; a change to real estate investments, major assets, or financial circumstances; a move to a different state; etc. As mentioned above, the significance of the necessary changes of the will may help guide which of the available options is most pragmatic when changing your will. For example, if various major events have taken place and there are multiple provisions in the will to be changed, it will make more sense to write a new will rather than attempting to change multiple provisions through a codicil. If you are interested in this topic or feel as if this situation applies to you, feel free to contact an attorney with any questions or for further information and guidance.