Estate administration is the official way that an estate gets settled under the supervision of the court. During the estate administration process, a person, usually a surviving spouse or an adult child, is appointed by the court if there is no Will, or nominated by the deceased person’s Will. Once appointed, this person, called an Executor or Personal Representative, has the legal authority to gather and value the assets owned by the estate, to pay bills and taxes, and, ultimately, to distribute the assets to the heirs or beneficiaries.
Not all estates must go through probate, though.
First, if an estate falls below a certain threshold in North Carolina, it is considered a “small estate” and does not require court supervision to be settled.
Second, not all assets are subject to probate. Some kinds of assets transfer automatically at the death of an owner with no probate required. The most common kinds of assets that pass without probate are:
- Joint Tenancy Assets: When one joint tenant dies, the surviving joint tenant becomes the owner of the entire asset, without the need for a court order. This is called “right of survivorship.”
- Tenancy by the Entirety With Right of Survivorship: This form of property ownership functions like joint tenancy in that the survivor owns the entire property at the death of the other tenant, but it is only available to married couples.
- Beneficiary Designations: Retirement accounts and life insurance policies have named beneficiaries. Upon the death of the account or policy owner, the designated beneficiaries are automatically entitled to the assets in the account or the proceeds of the policy.
- Payable on Death Accounts: Bank and brokerage accounts can have designated beneficiaries who are entitled to receive the account assets upon the account owner’s death. To accomplish this, the account owner must complete and submit specific bank forms designating a beneficiary.
Third, if a decedent had created a Living Trust to hold his or her assets, those assets will not go through probate.
– A. A. Milne