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Alternatives to Full Estate Administration

17 October 2019
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By Cowles Liipfert

Much of the time it is not necessary to go through a full estate administration for a decedent’s estate, due to one or more of the reasons discussed below, particularly if the estate is modest in size.

Non-Probate Assets

Estate administration is not needed for the transfer of non-probate assets, such as real property owned jointly with right of survivorship, life insurance or retirement accounts payable to a named beneficiary, bank accounts or securities accounts which are payable on death or transferred on death to a named beneficiary or beneficiaries, etc. 

Also, assets titled in the name of a revocable trust will pass under the provisions of the trust agreement and do not go through a full court administration. 

There is one exception to the above, which occasionally applies to bank accounts under a signature card which refers to NCGS Section 41-2.1, sometimes on old accounts which were opened years ago, which cannot generally be closed without the appointment of a personal representative for an estate.

Small Estates

Generally, a “small estate” is defined as personal property, less liens and encumbrances, totaling no more than $20,000 in value, except where the surviving spouse is the sole heir or devisee, in which the maximum amount is increased to $30,000.  The facts may be established by affidavit.

Family Allowances

An administration of small estates may be avoided if the Family Allowances available to the spouse and to minor family dependents equal or do not exceed the personal property in the decedent’s estate. 

The Year’s Allowance for a surviving spouse in 2019 is $60,000 and the allowance for minor dependents is $5,000.

Minor dependents must be under 18 years of age to qualify for a Family Allowance.

Summary Administration

In certain instances where the surviving spouse is the sole heir or devisee, the estate proceeding may be started as a summary administration. 

Summary administration is not allowed if any property passes to the spouse in trust, or if the decedent’s will specifically states that summary administration may not be used.

In a summary administration, the attorney brings a copy of the Order of Summary Administration, for the clerk’s signature and certification, for each asset to be transferred to the spouse.

Please note that the liability for debts of the decedent continues under this procedure.  The only way to cut off the claims of creditors is through regular administration with published notice to creditors, etc.

Notice to Creditors

When there is a full administration of a decedent’s estate, the executor or other personal representative is required to publish a notice to creditors weekly for four weeks in a newspaper of general circulation in the county in which the estate is being administered. 

When pursuing an alternative to full administration, such notice is not required.

However, when pursuing an alternative, any person otherwise qualified to serve as personal representative may file a petition with the clerk of superior court to be appointed as limited personal representative to provide a notice to creditors without administration in certain circumstances, including:

  • (i) When a decedent has died testate (i.e., with a will) or intestate (i.e., without a will), leaving no property which is subject to probate and no real property devised to the executor;
  • (ii) When a decedent’s estate is being administered by collection by affidavit;
  • (iii) When a decedent’s estate is being administered under the Summary Administration provisions of the General Statutes
  • (iv) When a decedent’s estate consists only of a motor vehicle that may be transferred by procedure as described above; or
  • (v) When a decedent has left assets that may be treated as “assets of an estate for limited purposes” as described in NCGS 28A-15-10, such as a joint account with survivorship under NCGS 41-2.1 as described above, applicable occasionally to accounts with old signature cards.
Transfers of Motor Vehicles

If the estate consists of motor vehicles only, or if the estate consists of motor vehicles and other personal property valued at less than the applicable family allowances described above, it may be possible to avoid a full administration of the estate by using the family allowance procedure to transfer other assets to the spouse and children and by using the procedure in NCGS Section 20-77(b) to transfer title to the motor vehicles.  

The Division of Motor Vehicles has issued a Form MVR-317, “Affidavit of Authority to Transfer Title, for transferring titles to motor vehicles out of the name of a deceased owner. 

This procedure applies where the Clerk has not allotted the vehicle as part of a year’s allowance and (1) the decedent has died without a will and no personal representative has qualified or is expected to qualify, or (2) the decedent has died with a will and with a small estate which, in the opinion of the clerk, does not justify the expense of probate and administration

All of the heirs of the decedent must sign the affidavit before a notary public, and the parent of a minor child may sign on behalf of the child. 

The clerk must also sign the affidavit after the heirs have signed.

Sales of Real Property Left to Heirs or Devisees

Unless real estate is willed directly to the decedent’s estate or the personal representative is expressly directed in the will to sell the real estate, title to real estate generally vests in the heirs or devisees the instant that the decedent dies, and it passes outside the administered estate.

However, the interests of the heirs or devisees in the property is subject to divestment if it is necessary for the personal representative of the estate to sell real property which belonged to the decedent on the date of death, to generate cash with which to pay creditors, administration expenses, etc. 

In that case, the personal representative of the estate may file a special proceeding before the clerk of superior court for permission to bring the real property into the administered estate and to sell the same.

If granted, the personal representative may bring the property into the estate and sell the property as directed by the clerk of superior court.

Because of the possibility that the personal representative can do this, the title left to the heirs or devisees is subject to a “cloud on title” for two years after the decedent’s death or until the probate estate has been closed.  

To enable the heirs or devisees to sell the real property sooner than that, while the estate is being administered, when it appears that it will not be necessary to bring the property into the estate and to sell the property to pay creditors, etc., the executor or other personal representative may join in the execution of a deed of sale by the heirs or devisees, essentially to indicate that the estate has sufficient assets, other than real estate, to satisfy the debts of the estate. 

The heirs or devisees cannot sell the real property within two years after the date of death, without the executor’s joinder on the deed.  

Unless someone qualifies as executor or administrator of the decedent’s estate, nobody would be authorized to sign the deed, so it would be necessary for someone to qualify as personal representative of the estate, it the heirs or devisees wanted to sell the property within two years after the date of death.

To protect himself or herself against possible personal liability for releasing the property as an asset with which to pay creditors, if necessary, the executor or other personal representative may insist on holding the proceeds of sale in escrow temporarily, until the estate has been closed or until two years has passed after the date of death. 







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