When you pass away, the probate process is initiated by a North Carolina court. During probate, your assets are distributed according to your will. if you die without a proper will, state succession rules are utilized to decide who gets individual real estate and monetary assets. Unfortunately, this isn’t a free or quick process, but there are workarounds to protect your family from losing out on your assets.
Costs of Probate
The first thing to understand about probate is that the costs of the process are paid from the estate itself. Yes, that means your assets will be used to pay the court to undertake probate after you die. Those costs generally include:
- The initial court fee paid to start probate.
- A fee paid to the personal representative assigned by the court to handle your assets.
- Additional amounts spent to maintain the value of the estate for paying off creditors.
During probate, your assets are used to pay creditors first before anything remaining is distributed to your parents, spouse, and children. Creditors have up to three months to make a claim on assets, which can put your family in limbo while waiting on finances or real estate to become available.
Assets That Don’t Go Through Probate
Aside from the clear benefit of providing peace of mind and certainty to your family, it simply makes more financial sense to avoid probate altogether. A variety of methods are available to skip this costly and inefficient process, like establishing joint ownership of property with a surviving spouse.
Gifting money, heirlooms, or property to family members such as grandchildren can also be a useful means of preventing assets from going through probate, but there are several major drawbacks here. Once gifted, you have no control over how the money or property is used. If you remain healthy and don’t suffer major medical issues, gifting can come back to bite you in another very serious way, as Medicaid’s five-year lookback period may prevent you from seeking financial assistance for a nursing home stay.
One of the most effective methods of avoiding probate while sidestepping many of these issues is to fund trusts and appoint the right trustee to oversee the distribution of assets to specific family members. Trusts can be specifically set up so that any included assets don’t go through probate at all.
Our Wilmington Asset Protection Attorneys Will Work Hard for You
The specifics of your financial situation may call for a variety of different methods of avoiding probate. Get in touch with an asset protection and estate planning attorney to find out what will work best for you.