Applying for Probate in North Carolina

Any executor named in a will may, at any time after the death of the testator, apply to the clerk of the superior court to have the will admitted to probate. If no named executor applies to have the will proved within 60 days after the death of the testator, any beneficiary named in the will, or any other person interested in the estate, may apply upon 10 days’ notice thereof to the executor. For good cause shown, the clerk of superior court may shorten the initial 60-day period during which the executor may apply to have the will proved.

The clerks of the superior court in North Carolina are required to notify by mail, all beneficiaries whose addresses are known, designated in wills filed for probate in their respective counties. The expenses associated with such notification are chargeable to the estate.

In the event that a party has the will and will not file it with the clerk of court, every clerk, on application by affidavit setting forth the facts, will, by summons, compel any person in the State, who has possession of the will to present the will for probate. If the person refuses or refuses to inform the court where the will is located, he may be held in contempt of the court or be committed to the jail of the county until the will is accounted for or produced.

On application for probate to the clerk of the superior court, he must ascertain by affidavit of the applicant –

(1)        That such applicant is the executor or devisee named in the will, or is some other person interested in the estate, and how so interested.

(2)        The value and nature of the testator’s property, as near as can be ascertained.

(3)        The names and residences of all parties entitled to the testator’s property, if known, or that the same on diligent inquiry cannot be discovered; which of the parties in interest are minors, and whether with or without guardians, and the names and residences of such guardians, if known.

The affidavit shall be recorded with the will and the certificate of probate thereof, if the same is admitted to probate.  Once the will is admitted to probate, the named executor or person presenting the will for probate may be appointed personal representative of the estate by the clerk and issued letters testamentary, allowing them to act on behalf of the estate.

Evan Lohr is an estate attorney with Lohr and Lohr PLLC in Raleigh. He can be contacted at (919) 348-9211 or at evan@lohrnc.com.

 

 

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Guardianship of Adults in North Carolina

The law presumes that all adults are legally competent and have the ability and right to manage their own affairs and to make decisions for themselves. Oftentimes, however, family members or friends find that a loved one cannot take care of their own finances or make the necessary decisions to live independently. If the person has executed a power of attorney, then the named attorney-in-fact may act on the person’s behalf in the manner authorized by the power of attorney (there are two general types of POAs – healthcare and financial). If the person has a trust which authorizes the trustee to take certain financial actions upon the incompetency of the person, then the trustee may do so. A problem arises, however, when a person needs to execute these documents but no longer has legal capacity to do so. In this situation, in order for a child, spouse, or other loved one to become authorized to make decisions on behalf of a person who no longer can, they must be appointed guardian by the Clerk of Superior Court in the county in which the incompetent person resides.

There are two aspects of a guardianship proceeding in North Carolina – first, the adjudication of incompetency, and second, the appointment of the guardian(s). The procedure to adjudicate competency and to appoint a guardian is laid out in Chapter 35A of the North Carolina General Statutes. 

To initiate a proceeding, a person must file with the Clerk of Court a verified petition for the adjudication of incompetence of an adult. The petition should include a general statement of the respondent’s assets and liabilities, a statement of the facts tending to show that the respondent is incompetent and the reason or reasons why the adjudication of incompetence is sought, and the name, address, and county of residence of the respondent’s next of kin and other persons known to have an interest in the proceeding. Upon filing of the petition, an attorney will  be appointed as guardian ad litem to represent the respondent.

Within five days after filing of the petition, the clerk shall issue a written notice of the date, time, and place for a hearing on the petition, which shall be held not less than 10 days nor more than 30 days after service of the notice and petition on the respondent, unless the clerk extends the time for good cause, for preparation of a multidisciplinary evaluation as provided in G.S. 35A-1111, or for the completion of a mediation. Copies of the petition and initial notice of hearing shall be personally served on the respondent.  Respondent’s counsel or guardian ad litem shall be served pursuant to G.S. 1A-1, Rule 4, Rules of Civil Procedure.  The petitioner, within five days after filing the petition, shall mail copies of the notice and petition to the respondent’s next of kin alleged in the petition and any other persons the clerk may designate.

Usually, guardianship hearings are held with the clerk of court sitting as finder of fact. However, the respondent has a right, upon request by him, his counsel, or his guardian ad litem, to trial by jury. If the finder of fact, whether the clerk or the jury, finds by clear, cogent, and convincing evidence that the respondent is incompetent, the clerk shall enter an order adjudicating the respondent incompetent.  The clerk may include in the order findings on the nature and extent of the ward’s incompetence.

Following an adjudication of incompetence, the clerk shall appoint a guardian pursuant to Subchapter II of Chapter 35A. Any individual, corporation, or disinterested public agent may file an application for the appointment of a guardian for an incompetent person by filing the same with the clerk. During a hearing to determine the appointment of a guardian, the clerk shall make such inquiry and receive such evidence as the clerk deems necessary to determine: the nature and extent of the needed guardianship; the assets, liabilities, and needs of the ward; and who, in the clerk’s discretion, can most suitably serve as the guardian or guardians. If the clerk determines that the nature and extent of the ward’s capacity justifies ordering a limited guardianship, the clerk may do so.

The clerk may appoint as guardian an adult individual, a corporation, or a disinterested public agent. In most circumstances, a person appointed as general guardian or guardian of the estate must post a surety bond to guarantee their performance. A nonresident of the State of North Carolina, to be appointed as general guardian, guardian of the person, or guardian of the estate of a North Carolina resident, must indicate in writing his willingness to submit to the jurisdiction of the North Carolina courts in matters relating to the guardianship and must appoint a resident agent to accept service of process for the guardian in all actions or proceedings with respect to the guardianship. Such appointment must be approved by and filed with the clerk.

Evan Lohr is an attorney with Lohr & Lohr PLLC in Raleigh. He regularly handles estate and guardianship matters. He can be reached at evan@lohrnc.com or at (919) 348-9211.

Pitfalls to Avoid in Estate Planning

Several online web sites provide forms for people to create their own wills for a fee less than that of hiring a typical attorney.  Earlier this year, a member of the Florida Supreme Court called that approach “penny-wise and pound-foolish” in a case that developed after Ann Aldrich died in October 2009. Five years before her death—in April 2004—Aldrich executed a Will that she drafted leaving essentially all of her property, including a life insurance policy and a Fidelity IRA, to her sister. In the event of the sister’s death before Aldrich’s own, the Will provided that the property would be distributed to Aldrich’s brother.  For whatever reason, Aldrich failed to include a residuary clause, and that omission became problematic when Aldrich’s sister died in 2007, leaving her own assets—both cash and real property—to Aldrich, who opened a new, separate Fidelity account. Apparently, in an effort to provide for the distribution of the inherited property, Aldrich subsequently signed another document—arguably a codicil—that said she wanted to “reiterate that all my worldly possessions pass to my brother.”  But that document only had one witness, and Florida law, like most jurisdictions, requires two witnesses for both a Will and a codicil to be valid. The question, then, became how the predeceasing sister’s property should be distributed:  to the surviving brother whom Aldrich named in her Will, or to the nieces of another, predeceased brother, including Laurie Basile, the plaintiff, under the state’s intestacy laws. The trial court ruled in favor of the surviving brother, but the Court of Appeals reversed, ruling that the property Aldrich inherited should be distributed to the nieces. The state’s Supreme Court agreed with the appellate court, and affirmed.

The law of North Carolina regarding witnesses to the execution of a will and residuary clauses is substantially similar to the law of Florida, and it seems likely that the North Carolina Supreme Court would decide a similar case in the same way as the Florida Supreme Court did. To avoid unwanted results, it is best to consult an experienced attorney to assist with estate planning matters.

The case is Aldrich v. Basile, No. SC11-2147, FL 3/27/14.

Evan Lohr is an attorney with Lohr & Lohr PLLC in Raleigh, NC. He handles estate disputes and helps clients prepare estate plans. He can be reached at evan@lohrnc.com or at (919) 348-9211.

“In Terrorem” Clauses

Many wills include provisions that are referred to as “in terrorem” or “no contest” clauses. An example of this type of clause may read, “In the event that any provision of my last will and testament is contested by any of the parties mentioned herein, the portion or portions of the estate to which such party or parties would be entitled shall be disposed of in the same manner as though their name or names had not been mentioned herein.” Essentially, the goal of an in terrorem clause is to attempt to dissuade a beneficiary from contesting a will in court. It should be pointed out that these clauses have no effect on someone who is not a beneficiary under the will submitted for probate – if they have no beneficial interest under the will as it is written, then they have nothing to lose by contesting the will.

Moreover, the presence of a no contest clause does not necessarily mean that a beneficiary will lose their inheritance if they file an action to contest the will. In Ryan v. Wachovia Bank & Trust Co., 235 N.C. 585, 70 S.E.2d 853 (1952), the North Carolina Supreme Court found that in terrorem clauses would not be enforced when the caveat is based on good faith and probable cause. In addition, it is generally held that the provisions of a “no contest” clause are to be strictly construed and not extended beyond their express terms. Haley v. Pickelsimer, 261 N.C. 293, 134 S.E.2d 697 (1964).

If you are a named beneficiary in a will that contains an in terrorem clause and want to contest the will, it is advisable to consult with an attorney prior to doing so, to ensure that contesting the will does not result in the loss of your interest under the will.

Evan Lohr is an estates attorney in Raleigh. He can be reached at evan@lohrnc.com or at (919) 348-9211.

A Primer on North Carolina Living Trusts

Most clients who seek me out for estate planning advice generally ask for help in drafting and executing a will for them. While a will is a necessary part of an estate plan, a trust can also be a very important part of that plan – and not just for the wealthy. The various benefits of trusts – discussed below – often provide valuable results for people of all income levels.

The most widely used type of trust is referred to as a living trust (also referred to as an “inter vivos” trust). A trust is a legal arrangement where a person called the “grantor” transfers property to be held by an individual called the “trustee” for the benefit of a third party, referred to as a “beneficiary.”  While many times the grantor, trustee and beneficiary are different people, that is not always be the case. Sometimes, the grantor, trustee and beneficiary can be the same person.

A living or inter vivos trust is one that is created during the lifetime of the grantor. In most cases, the grantor is both the trustee and the beneficiary during their lifetime. Usually, the grantor reserves the right to revoke the trust. After the death of the grantor, the terms of the trust control the disposition of the assets. In the usual case, the grantor’s spouse, if living, will receive the assets of the trust, either outright, or through distributions of the trust. If the spouse is not living, the grantor’s children or other chosen beneficiaries will receive distributions from the trust. These distributions can be made either by giving the property to the beneficiaries outright or by a successor trustee continuing to administer the trust until the time that the grantor specified that the beneficiaries are of a sufficient age to receive the remainder of their share.

The primary benefits of incorporating a living trust into your estate plan are avoiding the expense and hassle of probate in North Carolina, privacy, and avoiding ancillary probate in another state in which you own real property. When property passes via a will, a probate proceeding must be opened. The process can sometimes be time-consuming and expensive, and documents filed in a probate proceeding are public record which can be viewed by anyone, including a person intentionally disinherited under the terms of the will. Also, if you own property in another state, an ancillary probate proceeding must be opened in that state, which can be costly and burdensome to an executor. A trust avoids this problem because the trust, not you, owns the property, which passes pursuant to the terms of the trust. A revocable trust also provides a measure of planning should you become incapacitated. In that event, your successor trustee assumes responsibility for the administration of the trust and can manage the property held by it.

Evan Lohr is an estates attorney in Raleigh. He can be reached at evan@lohrnc.com or at (919) 348-9211.