Notice to Creditors in North Carolina Probate

Upon the appointment of the executor or administrator of a North Carolina probate estate, the personal representative or collector must notify all people or businesses having claims against the decedent to present them to the personal representative or collector. The notice must state that all claims must be presented within three months from the day of the first newspaper publication of the notice. The notice shall set out a mailing address for the personal representative or collector and must be published once a week for four consecutive weeks in a newspaper qualified to publish legal advertisements.

The personal representative or collector must also send to the last known address a copy of the published ntice to all persons, firms, and corporations having unsatisfied claims against the decedent who are actually known or can be reasonably ascertained by the personal representative or collector within 75 days after the granting of letters and, if at the time of the decedent’s death the decedent was receiving medical assistance as defined by G.S. 108A-70.5(b)(1), to the Department of Health and Human Services, Division of Medical Assistance. However, no notice shall be required to be delivered or mailed with respect to any claim that is recognized as a valid claim by the personal representative or collector.

A copy of the notice published, and an affidavit from a representative of the publishing company to the effect that such notice was published, along with an affidavit of the personal representative or collector, or the attorney for the personal representative or collector, to the effect that a copy of the notice was provided to each creditor shall be filed in the office of the clerk of superior court by the personal representative or collector at the time the 90 day inventory is filed.

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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.

 

 

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.