Probate is the legal process that supervises the transfer of a deceased person’s property according to their will or state law if no will exists. The court-monitored procedure aims to protect heirs and creditors.
But navigating piles of paperwork and red tape for month after tedious month often motivates families to ask us: How can we avoid probate in North Carolina?
Believe it or not, you have more options than you think when it comes to distributing someone’s property after they pass away.
Things like jointly owned assets, payable-on-death accounts, and trusts created while your loved one was still living can help simplify things and keep distribution out of the courts. The key is knowing how to set those up correctly ahead of time.
At Apple Payne Law, we assist Triangle area clients in thoughtfully selecting and implementing options compatible with their financial situations and estate plans.
Below, we walk through five key tools in our probate dodging toolbox.
Using a revocable living trust is one of the most comprehensive vehicles for sidestepping probate. Think of it as operating similar to a standard will in dictating property transfers upon death.
But assets placed in your lifetime created trust actually distribute directly to designees without court oversight.
What’s better is that all trust distributions occur privately, unlike the public nature of probate filings. Avoiding this courtroom process saves loved ones some hassle and heartache down the road. Plus, you retain control over assets during life and the ability to modify trust terms as situations change.
For larger or complex estates, the living trust plays nicely with supplementary planning tools as well. We guide clients in integrating provisions that best achieve financial and personal legacy goals while skirting unnecessary red tape.
Owning assets jointly with designated beneficiaries allows those items to bypass probate since legal title passes directly outside the will. Joint tenancy with rights of survivorship confers equal shares that convert directly to the surviving co-owner upon an individual’s death. On the other hand, tenancy by its entirety is the variant available to married couples where ownership converts fully to the surviving spouse.
Assets like real estate and vehicles most commonly use joint titles, as do money market accounts or certificates of deposits at some financial institutions. Joint ownership can make sense for smaller estates or with illiquid assets like homes that carry high probate costs and delays.
Another straightforward tool lies in naming payable-on-death (POD) beneficiaries for accounts housing liquid financial assets.
Designating an individual or individuals on retirement accounts like IRAs or workplace 401ks, investment accounts, and even some checking/savings accounts passes funds directly, avoiding probate.
Upon the original owner’s death, the custodian bank simply needs a valid death certificate to distribute funds to those waiting POD beneficiaries. Just double-check that your designations still reflect your current wishes whenever life milestones hit. This probate avoidance tactic sees heavy use for managing predictable inheritance plans.
Who doesn’t enjoy receiving presents? When it comes to estate planning, making intentional lifetime gifts lets you see loved ones benefit from cherished items now. Assets you don’t retain at death also sidestep that fateful probate process. Married couples can gift up to $34,000 jointly per year to as many recipients as desired gift tax-free.
Certain gifts, however, like retained life estates on property, may still factor into estate value. That’s where our experienced estate planning counsel can help, clarifying how to structure transfers aligned with your overall wealth and legacy objectives.
If the remaining assets left behind at someone’s passing add up to less than North Carolina’s minimums for full probate, state-streamlined procedures kick in. North Carolina permits estates under $20,000 to use a Small Estate Affidavit to collect personal property.
Heirs file simplified paperwork and pay smaller fees to claim inherited property. The court waives bond, inventory filing, and time-intensive probate requirements.
With 5 probate-avoiding tools now at your disposal, don’t leave your estate plans to chance. Let our team of seasoned North Carolina estate planning attorneys transform these insights into customized action. We’ll clarify which strategies match your family’s unique needs and craft tailored estate planning documents that provide protection probate would otherwise lack.
Contact us for a consultation today to get the ball rolling. Our team makes quick work of complex probate issues so you can find clarity, implement proactively, and gain peace of mind.
Don’t wait until it’s too late. Lockdown water-tight estate strategies today by calling our office.