Detailed Answer
To see what assets remain in a North Carolina estate after paying debts, taxes, and court costs, the personal representative (executor or administrator) must follow the accounting roadmap set out in Chapter 28A of the North Carolina General Statutes. Below is a step-by-step explanation in plain English.
- 1. Inventory every probate asset. Within 90 days of appointment, the personal representative files an Initial Inventory (Form AOC-E-505) with the clerk of superior court. See N.C. Gen. Stat. § 28A-20-1. The inventory lists only property that passes through probate—typically solely owned real estate, vehicles, bank accounts, personal property, and business interests. Non-probate items such as life insurance with named beneficiaries, transfer-on-death accounts, or jointly owned property with right of survivorship stay off the list because they skip the estate.
- 2. Identify and classify debts. Creditors must submit claims within 90 days of the date the notice to creditors expires. The personal representative publishes that notice once a week for four consecutive weeks and mails it to known creditors. See § 28A-19-3. The clerk later reviews a List of Claims that sorts each debt into one of six statutory priority levels under § 28A-19-6 (estate administration costs come first; unsecured credit cards come last).
- 3. Pay expenses and claims in order. The personal representative may not pay lower-priority claims until higher-priority ones are satisfied. If the estate lacks cash, the representative can liquidate estate property under § 28A-15-1 after receiving court approval. Failing to follow the order of priority can make the representative personally liable.
- 4. Reserve funds for statutory allowances and taxes. North Carolina law entitles a surviving spouse to a $60,000 year’s allowance and minor children to $5,000 each. See N.C. Gen. Stat. § 30-15. The representative also sets aside money for federal estate or income taxes, property taxes, and final personal income taxes.
- 5. Prepare the final accounting. After all debts, taxes, costs, and allowances are paid, the personal representative files a Final Account (Form AOC-E-506) and supporting receipts with the clerk. See § 28A-21-2. The accounting shows: starting inventory, additional assets collected, income earned, disbursements, and the balance on hand. The clerk reviews and either approves or requests corrections.
- 6. Determine the remainder for heirs or devisees. The balance on hand line of the approved final account equals the net estate. The personal representative distributes that amount according to the will or, if there is no will, according to the intestacy statute § 29-15. After filing receipts from the heirs, the clerk discharges the representative, officially closing the estate.
Helpful Hints
- Keep a dedicated estate checking account. Mixing funds with personal accounts can trigger fiduciary liability.
- Use accounting software or a simple spreadsheet to track every dollar in and out of the estate.
- Never pay a claim out of order. Ask the clerk for guidance when several classes compete for limited assets.
- Watch deadlines. North Carolina clerks assess late-filing penalties on inventories and annual accounts.
- Ask heirs to sign a Receipt, Release & Refund agreement so they refund the estate if a surprise debt appears later.
Need help? Determining what is truly left for heirs requires strict compliance with North Carolina probate law. Our firm has years of experience guiding personal representatives through inventories, claims, and final accountings. Call us at (919) 341-7055 today so you can settle the estate with confidence.
