It is not easy handling estate administration. You have a responsibility to ensure that the process goes smoothly. If you’re an executor not communicating with beneficiaries, everyone involved in the probate process may feel worried and on edge.
However difficult it may feel to communicate with heirs, communication is an essential part of the process. Let’s look at how to discuss estate administration with beneficiaries effectively and keep them informed of what is happening during the estate administration process.
Keeping everyone on the same page can help you make the estate administration process run more smoothly for everyone.
Authority of an Executor or Administrator (Personal Representative)
Executors, administrators, personal representatives, and trustees are all “fiduciaries.” A fiduciary has court-granted or legally granted authority to manage property for the benefit of another.
- The court appoints “Executors” from the wishes of a decedent
- The court appoints “Administrators” when a person dies without a will.
- The court calls executors and administrators “Personal Representatives.”
- When a decedent has drawn up a trust, the trust documents appoint a “Trustee” to handle the estate outside the court’s legal authority.
North Carolina Law allows an executor or administrator to handle many estate issues. As an executor, you may:
- Collect assets
- Pay claims
- Make all disbursements necessary to settle an estate and to distribute the assets in an orderly, accurate, and timely manner.
How Does a Probate Court Handle the Probate Process?
Estate administration is a process for handling the assets, debts, and taxes of someone who has died. Unless the estate is small (less than $20,000 for a single person, $30,000 for a couple), the probate court will appoint a representative to handle the estate.
Some estates may also avoid probate entirely by setting up a trust before their death. In this case, a trustee handles the estate, including the distribution of assets, outside of a courtroom’s interference. However, most estates in North Carolina face the probate court’s supervised estate administration procedures.
The office of the clerk of superior court handles your supervision as the personal representative. They oversee all of your expected activities, including the following:
Probating the Will
One of the first tasks of the probate court is to declare a last will and testament valid. Much drama associated with long and drawn-out battles over inheritance begins when someone disputes the will. For that reason, the court ensures that a will is valid before using it to determine the decedent’s wishes.
A decedent without a will is another story. Without a will, the estate will go through a state legal procedure called “intestacy” to determine the heirs and how much the heirs will receive. In general, intestacy determines inheritance through bloodline and legal relationship determinations.
Inventorying of Assets
The first job of a personal representative is to inventory the estate assets, including all estate real property, money assets, interests in other property, the fair market value of valuable property assets, and any other estate property. The court will expect this to happen in a timely manner with a good faith effort.
Giving Public Notice to Creditors
The executor must also send out a public notice to all known creditors of the decedent, informing them that they have a limited amount of time (usually 3 months) to make claims against the estate. If any creditors come forward after this period, they will lose their right to collect from the estate.
Paying Valid Debts
It is an executor’s duty to pay all valid debts and creditors under the supervision of the court. When an executor fails to uphold their duties, they can face court sanctions.
Determining Necessity to Sell Property
if necessary and approved by the probate court, the personal representative may need to sell property to pay debts and creditors. However, before a proposed sale, they will need court approval to sell real estate.
An executor has limited authority to sell property. If the court does not approve the proposed action to sell real estate, then the executor has no legal authority. If the executor finds authority granted by the court, they may sell real or personal property to meet debts.
It is their fiduciary responsibility to act in the best interests of the estate and rightful heirs under the supervision of the Clerk.
Distributing Property To Beneficiaries
After all debts and taxes have been paid, executors distribute the remaining property to beneficiaries as detailed in the will or by intestacy laws.
However, executors must be careful not to make distributions without first ensuring that all taxes and creditors are paid from estate funds. If an executor ignores debts and pays beneficiaries before handling creditors, they can face personal legal trouble!
Some Assets Distribute Immediately After Death
Assets settled through the probate court usually include:
- Vehicles
- Bank accounts
- Stocks and bonds
- Furniture
- Jewelry
However, many assets pass outside of the probate process and may include:
- Property held with “right of survivorship.” For example, a joint bank account with the right of survivorship passes immediately to the living joint owner, regardless of what a last will and testament may state. Life insurance policies, retirement accounts, and annuities automatically pass to any named beneficiaries regardless of the will.
- Land and houses generally do not pass through the probate estate unless the will provides otherwise or the sale of these assets is needed to pay estate debts. Often, an estate may need to sell a family home to pay back monies that the decedent received through Medicaid.
Don’t Create Legal Issues As an Executor Not Communicating With Beneficiaries
As an executor, there is no time limit on settling an estate. However, the court will expect you to meet numerous deadlines throughout probate proceedings.
As the executor, you must inform the beneficiaries about the legal action you may be working on at any given time. This can help close relatives understand why they have not received distribution checks yet.
Often, a beneficiary feels desperate for an inheritance they were counting on and may question your fiduciary duty. Letting them know about the probate estate process can help them understand that you are often waiting for a court order before you can act.
Communicating with beneficiaries about what you are legally required to handle before handing out distributions helps beneficiaries see that you are not trying to prevent them from receiving an inheritance. An executor who refuses to keep beneficiaries informed invites claims of executor misconduct.
A bit of explanation or a letter now and then to notify beneficiaries of the timeline can go a long way in calming and helping beneficiaries understand. When an executor refuses to engage in communicating with beneficiaries, family members may move to have the executor removed, prolonging the entire process.
Sufficient Grounds For Court Removal of Executor
There are many reasons an executor or personal representative may no longer act as the fiduciary, and the clerk may name a new executor.
Suppose the personal representative neglects to provide an account or delivers unsatisfactory results. In that case, the Clerk of the Superior Court can issue an order requiring them to appear and explain why they failed to submit their inventory.
Suppose 20 days pass without the required filing. In that case, the clerk may have the sheriff serve the personal representative with an order of contempt and commitment, and the sheriff will place the personal representative in the county jail until he or she complies with the order.
In addition, the personal representative is personally liable for all costs associated with such proceedings.
The clerk may also remove the personal representative and appoint someone else to complete the administration of the estate. Some of the reasons for a personal representative (PR) or a change in the executor could include:
- PR renunciation of office
- Risk of loss to surety
- Failure to file inventory
- Failure to account for assets
- Failure to comply with the clerk’s order* for new or increased bond
- Refuses or fails to obey any citation, notice, or process served on non-resident PR or process agent
- Bankruptcy trustee, liquidating agent, receiver appointed for the PR
- PR executes assignment for benefit of creditors
- Failure to file inventory or account and proceedings to compel such filing cannot be had because service cannot be completed because PR cannot be found.
- PR is a licensed attorney who becomes suspended, enjoined, or disbarred (1)
An Estate Lawyer Can Help With Administration
If a family member of the deceased is discontent with the will or inheritance laws, they can initiate long-term litigation that could tie up an estate in court for years.
If an individual has inherited something that does not reflect their expectations, or if they feel wronged by a forced bloodline succession of property, legal action may be taken to impede the process. In such cases, lawsuits can be used as leverage to seek fair treatment and justice.
Seeking out an experienced probate lawyer with experience as an estate attorney can help you with executor-required duties.
Our Experienced Estate Administration Probate Lawyers Can Help
Whether you feel unsure how to handle the inventory of an estate or struggle to meet court-appointed deadlines for administrative duties, we can help. At Cape Fear Law, we walk you through each step of the administration process, helping you meet each probate court demand with organizational efficiency and carefully constructed reports.
If the unexpected happens and you find yourself caught in lawsuits facing litigation over the fairness of estate distribution, we can represent your interests in the courtroom. Our estate administration attorneys know how to meet courtroom drama head-on and find solutions that best fit your situation. Look to us for answers to successfully perform your legal responsibilities as a personal representative.