The emotional trauma brought on by the death of a close family member is often accompanied by bewilderment about the financial and legal steps the survivors must take. These steps may inconveniently come on top of commitments to family and work that can’t be set aside.
Probate, also known as estate administration, is the process that occurs after a person dies and prior to his or her assets being distributed. In North Carolina, estate administration is governed by the North Carolina General Statutes as well as the rules of the Clerk of Superior Court in the county of the decedent’s residence. Administrators are responsible for being aware of these laws and rules and are charged with following them. Getting support from an attorney with estate administration experience allows the process to be implemented smoothly and efficiently.
This listing includes the first few steps a surviving family member may want to take. These responsibilities may ultimately fall on whoever is appointed executor or administrator. Note that matters can be a bit complicated in the absence of a will, because it may not be clear who legally has the responsibility of carrying out these steps.
It is often recommended that you do not make any long-term decisions about finances for at least six months to a year after your loved one’s death. However, your situation may be different. Please consult an attorney familiar with your particular set of circumstances for decision making advice.
1. Social Security Administration
Phone the Social Security office and notify them of the death. Also, check for eligibility of Social Security death benefits. Call the Social Security Administration at 1-800-772-1213 for more information on benefits for which you may be eligible.
2. Veterans’ Benefits
Call the Office of Veterans Affairs at 1-800-827-1000 to find the office nearest you. Benefits to a spouse and heirs may include pension payments and financial aid for education costs.
3. Safe Deposit Box
Determine whether or not decedent had a safe deposit box by contacting the banks where decedent had accounts. If you determine that the decedent had a safe deposit box, you will need to find the keys.
4. Estate Planning Documents
Find the will, all trusts, and any other estate planning documents. Usually these are kept in a safe deposit box (see above), in a home safe, or otherwise amongst the decedent’s important papers including insurance policies, contracts, bank statements, deeds, auto registration, etc.
5. Inventory Assets
Ascertain the existence of the decedent’s assets and inventory them including the following:
- Bank accounts
- Stocks and bonds
- Life Insurance policies
- Retirement funds: IRA accounts, Annuities, 401K, Pension, and Profit Sharing
- Real estate
- Household goods, furniture and personal belongings as well as antiques, silver, jewelry, furs, stamp collections, or coin collections.
- Business interests – determine whether decedent owned an interest in any business.
6. Receivables and Death Benefits
Investigate other benefits that may be available to the estate, including: social security and veterans’ benefits (see above), union death benefits, employee benefits such as accrued vacation pay, final wages, employee death benefits, reimbursements, refunds on insurance, canceled subscriptions, professional and trade associations, fraternity/sorority, school alumni, and automobile clubs. Unfortunately, government, employment, and membership organization benefits do not come automatically. You must apply for them within their timeframes.
7. Liabilities and Creditors
Ascertain the existence of the decedent’s liabilities and list them including the following: Mortgages, Other secured obligations, Current household bills, Expenses of last illness, and Funeral expenses, etc. IMPORTANT: Discuss any payments you make from or for the estate with an attorney. Considerable liability for the personal representative could result if these payments are not handled properly. Also, beware of swindlers who send phony bills and overcharge for services.
8. Proof of Payment of Expenses by Family and Executors
Be sure to get and keep bills, invoices, receipts, and canceled checks for payments of any and all expenses. The personal representative appointed will need to supply the probate court with proof of payment.
9. Papers and Mail of Decedent
Do not throw out any documents such as life insurance policies and certificates, even if the policyholder stopped paying premiums. The policy may still be in force. In addition, mail and letters may be needed to prove payment or ownership of assets later.
10. Protect Assets
a. Be sure and keep the insurance going on the home and on any personal property so that these assets will be protected during the probate period.
b. Secure valuable tangible property. This means anything you can touch, such as silverware, dishes, furniture, art work, etc. If property is passed around to family members before you have the opportunity to take an inventory, this will become a difficult, if not impossible, task. Also, there may have been specific provision for items of tangible property in the will.
c. Have someone watch your home (and the decedent’s home) during services. Sadly, burglars have been known to read obituaries to find out when no one will be home.
11. Clip obituary notices
Some insurance companies require a dated newspaper announcement in order to process claims.
12. Death Certificates
Order ten or more certified death certificates. Usually these can be obtained through the funeral home or the NC Department of Vital Statistics. A certified death certificate will be needed in order to begin the probate process. You will need certified copies of death certificates to claim Social Security and insurance benefits, change ownership of joint property, to enter safe deposit boxes and to file tax returns. Photocopies are often not acceptable. Here is the website for the NC Department of Vital Statistics: http://vitalrecords.dhhs.state.nc.us/vr/requests
There will be tax concerns including filing requirements, communicating with federal and state tax authorities, and observing deadlines. Due to the extensive subject matter, please consult an estates attorney for more information. However, certain relevant tax returns are:
- Decedent’s Final Income Tax Return
- Gift Tax Returns
- Federal Estate Tax Return
- Generation-skipping Transfer Tax Returns
- State Inheritance and Estate Tax Returns
- Fiduciary Tax Returns
14. Minor Children
If other parent of decedent’s children has died as well, and there are minor children, a guardian is usually nominated in the will. A guardianship is required for minor children who would be receiving cash and/or valuable property in accordance with the decedent’s will. Always check the will as to whom the decedent named as guardian and custodian for the minor children. This mainly applies to those situations where both the mother and father have died and the children are under 18 years of age.
15. Do not miss Deadlines
Upon the death of a person, the clock begins ticking on certain important legal deadlines imposed on family members, fiduciaries, and beneficiaries by federal and state authorities. For example, you should contact Social Security and the Veterans Administration right away because a delay in applying can result in the loss of some benefits.
16. Consult with an Attorney
An attorney will help you determine if probate is necessary, and if so, what type of probate is necessary in order to handle estate obligations, transfer the assets of the decedent to the persons named in the decedent’s will or trust, or the decedent’s legal heirs. The attorney will take the first steps to initiate the probate process with the filing of the necessary court papers.
Bring as much information as possible about finances, taxes and debts. Don’t worry about putting the papers in order first; the lawyer will have experience in organizing and understanding complex financial statements.
And note, the costs for legal counsel are, with only a few exceptions, expenses of the estate and not costs the personal representative or family members have to pay out of pocket themselves.
In Conclusion: Probate is a Process that doesn’t have to be a Problem
Legal procedures are the furthest thing from your mind when a loved one passes away. There are many issues, however, that need to be addressed when a person dies – even if the person’s family is not ready to deal with those issues alone. Engaging a qualified estate attorney with experience in probate issues will enable you to take the best steps to minimize taxes, legal wrangling for the executor, family, and beneficiaries, and may save you money and stress in the long run.