What is Probate
Probate is the legal process used to settle a deceased person’s estate. The process is overseen by the judge of the probate court. In North Carolina, the probate judge is the Clerk of the Superior Court of the county in which the deceased had personal residence at the time of his death. The probate process includes filing an inventory of assets owned by the deceased, paying any debts held by the deceased, filing and paying any estate taxes, and distributing the assets of the deceased in accordance with her will (or as directed by state law if the deceased died without a will).
In North Carolina, whether or not a person had a will, probate is required when a person dies owning assets in his name that are not otherwise directed by contract. Examples of assets that are not subject to probate include: assets held in trust, any insurance policy proceeds of the deceased, any payable on death bank accounts, and any real estate that is held jointly by husband and wife.
Estate planning attorneys often speak of the three evils of probate. The first two evils are that probate is time consuming and expensive. The typical probate can last between 9 and 18 months, and can cost between 2% to 7% of the probate estate. If there is litigation involved (e.g. a will contest, wrongful death lawsuit, lawsuit brought by a creditor of the deceased, etc.) the length and costs of the probate can increase significantly.
The third “evil” of probate is that the settling of an estate becomes a public matter. The will, when probated, becomes public record, as are any proceedings in the probate court. While these matters are not generally advertised, they are available to persons seeking access.
Based on our description of probate as well as the three evils, it’s no wonder most people wish to avoid probate. Is a living trust the only way to avoid probate? Frankly, no. A person could go through a lot of trouble retitling their assets to be held jointly or as payable on death. While this would work to avoid probate, it would do not address other concerns, such as providing creditor protection to your loved ones, protecting assets meant for your children from a remarriage, Medicaid and disability planning. Only living trust planning can address these concerns.