Being the personal representative (executor or administrator) of an estate going through probate is an immense responsibility. Although you are not required to have legal representation to complete a probate it is encouraged for many situations. However, even with an attorney, there is still a large amount of tasks that the personal representative is responsible for.
One question that has come up often is, “what takes place after the estate has been opened, notice to creditors have been posted and the inventory has been filed in North Carolina?” Let’s take a look.
Inventory Completed for Probate Estate
You just finished the process of accounting for all assets within the estate. It is advisable for you to open a checking account in the name of the estate. This is the account you will use to administer payments for verified claims as well as for distributing inheritances. Having one bank checking account will allow for easier documentation as well.
Paying Creditors & Taxes in Probate Estate
As the personal representative of the estate you have the fiduciary responsibility to validate claims against the estate and to honor valid claims. Remember claims against the estate can often be negotiated down. Requesting a reduction or relief from estate debt can save the estate money and does not hurt to ask.
Please note that if there are not enough funds to pay valid claims then the estate may need to sell assets within the estate such as real or personal property to satisfy the claims. If there are still insufficient funds to pay claims then the payments are made based on the North Carolina General Statutes outlined order of priority.
The personal representative will also need to file necessary tax returns for the estate as well. This may include unfiled income tax or gift tax returns of the decedent, income tax returns for income generated during the estate administration process, or an estate tax return.
It is recommended to involve a licensed tax preparer for this stage. Reach out to Estate Pro Service, LLC if you would like assistance. We can connect you to our network of vetted estate professionals.
Distributions of Probate Estate Assets
Generally the distribution of inheritance takes place at this stage, however depending on the nature of the estate, some distributions may have taken place in prior stages. The distribution stage is dictated by the Last Will and Testament if there is one and by NC State succession laws if not. Be sure to keep detailed records as the Clerk’s office will be reviewing and approving all accounting. Beneficiaries will need to sign a receipt and release acknowledging the distribution and relieving the personal representative of liability.
Closing the Probate Estate
You are almost at the finish line! The next stage is to petition the court to close the estate and to release the personal representative for liability. If there is a bond, after the estate is closed it will be released.
You will share the letter closing the estate with the Internal Revenue Services and be released officially released from your duties.
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