Do beneficiary‑only assets need to be listed on the probate forms, and do they affect the estate’s fee calculation? – North Carolina

Short Answer

In North Carolina, beneficiary‑only assets (like life insurance or retirement accounts payable to a named person) are typically not part of the probate estate and generally are not listed on the formal 90‑day Inventory. They also do not count toward the estate administration fee, unless they are payable to the estate or are pulled into the estate to pay debts. The preliminary application may ask for these items for information only.

Understanding the Problem

The narrow question in a North Carolina probate is: must beneficiary‑only assets be listed on probate forms, and do they change the court’s estate fee? This comes up when a personal representative wonders whether to list life insurance with a named beneficiary, POD/TOD bank or brokerage accounts, or retirement plans. The key decision point is whether the asset is probate property or a nonprobate transfer, and when the clerk calculates the fee.

Apply the Law

Under North Carolina law, the personal representative files two different disclosures at different stages. The preliminary application includes an informational section for some nonprobate property. The 90‑day Inventory lists estate property and any assets that can be added to the estate to pay claims, but it does not include purely nonprobate, beneficiary‑only assets. The estate administration fee is assessed on the fair market value of the estate’s personal property (plus certain real estate sale proceeds handled by the personal representative). Nonprobate assets do not impact the fee unless they are payable to the estate or are later brought into the estate for creditor payment.

Key Requirements

• Classify the asset correctly: Determine if the item is probate property, can be added to the estate to pay claims, or is a nonprobate transfer that stays outside the estate.
• Preliminary disclosure is informational: The application may list nonprobate items for context, but that does not make them estate assets.
• 90‑day Inventory contents: List estate property and any assets recoverable to pay claims; exclude purely beneficiary‑only assets.
• Fee base: The court fee is calculated on estate personal property value plus proceeds from sales of real estate that come into the personal representative’s hands.
• Exceptions: If a “beneficiary‑only” asset is actually payable to the estate, or is recovered to pay debts, it becomes part of the fee base.
• Forum and timing: File with the Clerk of Superior Court (Estates Division) in the county of domicile; the Inventory is due within three months of qualification.

What the Statutes Say

• North Carolina Gen. Stat. § 28A-20-1 (Inventory due in 3 months) – sets the timing and scope of the Inventory.
• North Carolina Gen. Stat. § 7A-307 (Estate administration fees) – fee based on estate personal property and certain real estate sale proceeds handled by the fiduciary.
• North Carolina Gen. Stat. § 28A-15-10 (Using certain nonprobate assets to pay claims) – allows recovery of some nonprobate assets if estate funds are insufficient.
• North Carolina Gen. Stat. § 28A-18-2 (Wrongful death proceeds) – wrongful death proceeds are not estate assets and are treated separately.

Analysis

Apply the Rule to the Facts: With no specific facts, assume a decedent with a life insurance policy naming an adult child, a POD bank account, and a 401(k) naming a spouse. Those items are nonprobate and would be listed, at most, in the preliminary application’s informational section. They are not included on the 90‑day Inventory and do not affect the fee. If the life insurance named the “estate” or if a joint account had to be pulled in to pay creditors, those funds would appear on the Inventory and be included in the fee base.

Process & Timing

1. Who files: Personal representative (executor or administrator). Where: Clerk of Superior Court, Estates Division, in the North Carolina county of the decedent’s domicile. What: Application with preliminary inventory (AOC‑E‑201 or AOC‑E‑202), then INVENTORY FOR DECEDENT’S ESTATE (AOC‑E‑505). When: File the Inventory within three months of qualification.
2. After filing, the clerk reviews the Inventory and calculates the estate administration fee based on estate personal property and any sale proceeds of realty that came through the fiduciary. Timing for assessment and payment can vary by county.
3. On annual or final accounts, report only estate assets received and disbursed. Do not include beneficiary‑only assets unless they were actually received into the estate.

Exceptions & Pitfalls

• Assets payable to the estate (e.g., life insurance naming the estate) are probate property and must be listed; they count toward the fee.
• Some nonprobate assets may be recovered to pay claims if estate funds are insufficient; once recovered, they are listed and affect the fee.
• Wrongful death proceeds are not estate assets, are accounted for separately, and do not affect the fee.
• Misclassifying nonprobate assets as estate property can inflate the fee and bond; provide proof of survivorship or beneficiary designations if the clerk requests it.
• Count only fair market value as of date of death for estate assets; the clerk may ask for statements, appraisals, or other documentation.

Talk to a Probate Attorney

If you’re dealing with how beneficiary‑only assets interact with North Carolina probate filings and fees, our firm has experienced attorneys who can help you understand your options and timelines. Call us today at (919) 341-7055.

Disclaimer: This article provides general information about North Carolina law based on the single question stated above. It is not legal advice for your specific situation and does not create an attorney-client relationship. Laws, procedures, and local practice can change and may vary by county. If you have a deadline, act promptly and speak with a licensed North Carolina attorney.