You may not realize that after you die, a court of law must settle your estate. Before a single penny goes to your heirs, the administrator of your estate must inventory, assess value, and consider your debts. During the long process of your estate settlement, your loved ones may wonder, “How long does probate take?”
Your Will
If you have a will, the first thing that happens is a judge probates your will, making it official. If there is any disagreement about whether the will is valid or not, the judge considers the different possibilities. The judge only probates one will. If there is a discrepancy or disagreement, this can take some time to sort out.
Probate is Public
Your assets, creditors, and beneficiaries are public records in court filings. The court also freezes your assets to protect them until the court authorizes your personal representative or administrator to make distributions. This process generally takes at least 90 days.
Probate is a public court process with legal documents in the public domain. Anyone can read about your estate and make a claim for your property based on their relationship with you. Anyone can also make a claim against your estate for monies owed. The public nature of the probate process can bring in creditors who want to scheme against you to make a buck.
In addition to creditors, family members see the inheritance amounts for others. If you give away disparate amounts to family members, they will all know how much each got from your estate. These public inheritance distributions can cause family jealousy and disunity.
Judge Appoints an Administrator
If you have a will, you can appoint an executor to carry out the wishes of your will. However, if you do not appoint someone, the judge will appoint a personal representative or an administrator. This person will carry out the duties of the court in processing and administering your estate.
Your administrator must pay your income taxes, your estate taxes, and your creditors. Sometimes they will need to hire appraisers at up to $50 per hour to consider the value of any expensive jewelry or antiques. Your home may also need an appraisal before it is given to heirs or sold.
If you don’t have a will, North Carolina courts distribute your estate according to “intestate” laws. These laws explain who will inherit and how much. The administrator is responsible for working with the court to distribute inheritance based on intestate law.
Expenses of Probate
Medicaid Recovery Program
If you had Medicaid coverage, Medicaid recovery might make a claim on your home or other assets. They can take your home as payment for your medical care and living arrangements that you received while living.
Probate Court Fees
Your estate is subject to court probate fees of up to $6,000, based on the value of the gross estate.
Executor or Administrator Fees
Your personal representative is also entitled to compensation of up to 5% of your estate.
Settling of the Estate
Once the administrator pays all of the creditors, taxes, and any other outstanding debts, the judge can finally allow the distribution of assets to the heirs. Getting to this point of a probate settlement can take six months for a simple estate or even several years for a complicated one.
Avoid Probate
There are ways to avoid probate, some of which are simple to set up. You can own property jointly with the right of survivorship to allow real property to pass immediately on to heirs. You can own joint bank accounts in the same manner.
Be sure to check the beneficiaries named on any retirement accounts. Those types of accounts go immediately to heirs and do not pass through probate.
Another way to avoid probate is to put your property and assets into a trust. A trust can also help to prevent Medicaid Recovery Programs from taking your home.
Find Help
If you would like to avoid the probate process, talk with us at Vail Gardner Law. We work with people planning their estates every day. We specialize in estate planning: preparing for what will happen in the future and taking action now to protect your future and that of your loved ones. Making plans now is a future gift to your loved ones when they may need it the most.