Ep 98 | Do We Have to Pay All Claims Against The Estate | Probate Durham NC

Ep 98 | Do We Have to Pay All Claims Against The Estate    Probate Durham NC

What is Probate?

Probate is the legal act of the settling the affairs of a deceased person. During the probate process the appointed personal representative(s) is referred to as the executor(s) if there is a verified will or the administrator(s) if there is no will in place. The personal representative will have legal authority to notify creditors and settle the affairs of the estate.  This includes paying debt and distributing inheritance owed and owned by the estate.  

Claims Against the Estate

Once probate is opened a notice to creditors is published in an authorized publication and must run for 4 consecutive weeks.

Creditors have 90 days from the last official posting to make claims.

What if there are Not Enough Funds in the Estate?

To ensure priority claims are addressed first, the personal representative should wait until all creditors have had the opportunity to make a claim before paying any alleged debt.

It is highly recommended that you contact creditors that have issued claims and attempt to negotiate the bill down.  It may not be a success, but it is worth a try.

If there is still not enough funds to pay creditors then use the North Carolina priority of claims to make payments:

Order Of Priority Of Claims | Probate North Carolina

  1. Costs and expenses of administration of the probate, including  the year’s allowance
  2. Claims with liens on real property up to the amount of the value of such property.
  3. Funeral Expenses. 
    • For the estates of decedents dying on or after 10 / 1 / 09, funeral expenses of up to $3,500. 
    • For the estates of decedents dying on or after 10 / 1 / 09, the funeral expense priority is immediately followed by a new priority of up to $1,500 for costs associated with the purchase of a burial site and gravestone. The balance of funeral expenses, above the level of the preferences set in this paragraph, has no preference, and should be paid as all other claims in #8 below. 
  4. Federal Government. All dues, taxes, and other claims with preference under federal law. 
  5. State Government. All dues, taxes, and other claims with preference under the laws of the State of North Carolina or under the laws of local governments in North Carolina. 
  6. Medicaid claims.
  7. Wages due any employee of the decedent for a period of not more than twelve (12) months immediately preceding the death of the decedent; the cost of any medical services received during the twelve (12) months preceding the death of the decedent; and the cost of necessary drugs and all other medical supplies incurred during the last illness of the decedent (not to exceed 12 months). 
    1. A claim for equitable distribution. 
    2. Farm operation expenses through harvest under G.S. 28A-13-4. 
  8.  All other claims (for example, credit card debt). 

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