How Can I Determine Which Assets Require Full Probate Administration Versus Those That Bypass Probate in the State of North Carolina?

1. Detailed Answer

When someone dies in North Carolina, their estate may include assets that must go through full probate administration and assets that pass outside probate. Understanding the distinction helps you plan and reduce delays for your loved ones.

Assets Requiring Full Probate Administration

Full probate administration begins when you file a petition in superior court to appoint a personal representative. This process applies when the decedent held assets solely in their name without a designated beneficiary or right of survivorship. Common examples include:

• Bank and investment accounts titled only in the decedent’s name.
• Real estate owned in fee simple or as tenants in common.
• Personal property (vehicles, artwork, jewelry) without joint owners or payable-on-death designations.

Under N.C.G.S. § 28A-1-1, the court issues letters testamentary or letters of administration to authorize the personal representative to collect assets, pay debts, and distribute property according to the will or intestacy rules.

Assets That Bypass Probate

Certain assets pass by operation of law or by beneficiary designation. They never enter the full probate process. Key categories include:

• Joint Tenancy with Right of Survivorship: Property held jointly with survivorship rights automatically transfers to the surviving owner. (N.C.G.S. § 47-17)
• Tenancy by the Entirety: Spouses own real estate together. At death, the property passes to the surviving spouse without probate. (N.C.G.S. § 47-17)
• Payable-on-Death (POD) and Transfer-on-Death (TOD) Accounts: Bank and brokerage accounts with a named beneficiary.
• Life Insurance and Retirement Plans: Death benefits go directly to the designated beneficiary and avoid probate. (N.C.G.S. § 58-51-5)
• Revocable and Irrevocable Trusts: Assets placed in trust pass according to trust terms.
• Small Estate Summary Administration: If the total value of probate assets (excluding exempt property and homestead allowance) falls below $20,000, you can use a simplified procedure under N.C.G.S. § 28A-19-1. This avoids full administration.

By comparing the asset title, beneficiary designations, and statutory thresholds, you can sort assets into probate or non-probate categories. This exercise helps estimate court costs and timeline for distribution.

2. Asset Checklist: Probate vs. Non-Probate

• Review account titles: sole owner vs. joint or beneficiary designation.
• Identify real property ownership: fee simple, tenants in common, joint tenancy, tenancy by entireties.
• Check insurance and retirement plan beneficiaries.
• Determine trust-held assets and trust type.
• Calculate total probate assets to see if small estate summary applies.
• List exempt property subject to limited or no administration (N.C.G.S. § 28A-2-2).
• Consult records for any transfer-on-death deeds or payable-on-death registrations.

Sorting assets now saves your loved ones time and money later. If you need guidance on classifying assets or starting probate administration in North Carolina, turn to Pierce Law Group. Our experienced attorneys stand ready to help you navigate the process, avoid common pitfalls, and ensure a smooth transfer of assets.

Contact us today by emailing intake@piercelaw.com or calling (919) 341-7055.