What is a year’s allowance and how does it protect assets from creditors? — North Carolina

Short Answer

In North Carolina, a year’s allowance lets a surviving spouse receive up to $60,000 of the decedent’s personal property and each qualifying child (under 21) receive $10,000 for support for one year. These allowances are carved out of the decedent’s personal property before most creditor claims and are exempt from judgment liens. You apply with the Clerk of Superior Court using the state form, and if a personal representative has been appointed, you must apply within six months of the letters being issued. The allowance does not wipe out valid, perfected security interests or certain tax liens, and it does not come from real estate.

How North Carolina Law Applies

North Carolina provides two family allowances from a decedent’s personal property: a spouse’s allowance of $60,000 and a child’s allowance of $10,000 per qualifying child under age 21. A leading North Carolina practice guide explains that these allowances are exempt from judgment or execution liens and are commonly used in insolvent estates to shield a modest amount of personal property for the family. The Clerk assigns the allowance from cash or other personal property listed in the application; it is not taken from real estate. If the estate later discovers more personal property, the Clerk can award the balance then.

For decedents dying on or after March 1, 2024, there is no general time limit to apply unless a personal representative (PR) has already been appointed; in that case, the spouse or child must file within six months after letters are issued. The applicant must also deliver a copy of the application to the PR if one has been appointed. The Clerk may require a brief hearing or, if contested, direct the parties to a formal estate proceeding. Any person with standing may challenge an award within one year.

Example: If your late spouse left $18,000 in bank accounts and $7,000 in a vehicle, the Clerk can assign up to $25,000 toward the spouse’s $60,000 allowance. Those funds and the vehicle title can be transferred to you despite general unsecured credit card claims against the estate. But if the vehicle is subject to a perfected lien, that lien is not erased by the allowance.

Key Requirements

Who can claim: the surviving spouse; and each qualifying child under 21 (including adopted children, a child in utero at death, and a child to whom the decedent stood in loco parentis).
Amounts: spouse $60,000; child $10,000 (awarded to children only after the spouse’s allowance is fully satisfied).
Source of property: the decedent’s personal property (cash, accounts, vehicles, tangible items)—not real estate.
Creditor protection: the assigned allowances are exempt from judgment and execution liens and come off the top before most creditor claims.
Limits: the allowance does not eliminate valid security interests on specific items or certain tax liens.
Contests: any interested person can challenge the award, amount, or assets assigned within one year of the order.

Process & Timing

Prepare the application: Use AOC Form E-100 (Application and Assignment of Year’s Allowance). List personal property available to satisfy the allowance. Bring supporting documents (bank statements, titles, etc.).
File with the Clerk: File in the county where venue would be proper for estate administration. If a PR has been appointed, deliver a copy of your application to the PR by personal delivery or first-class mail.
Deadlines: If no PR is appointed, you may apply at any time (for decedents dying on/after March 1, 2024). If a PR has been appointed, apply within six months after letters issue.
Clerk’s review and assignment: The Clerk reviews the application and, if satisfied, signs the assignment. If more personal property is later found, the Clerk may award the balance using AOC Form E-101.
Transfer of assets: Use certified copies of the Clerk’s order to retitle or collect the assigned assets (banks, DMV, transfer agents). Assets assigned this way do not go on the PR’s inventory.
If contested: The Clerk may require a hearing or direct the matter to a contested estate proceeding. An interested person can later file a challenge within one year of the award.
Additional allowance (optional): In limited cases, a spouse or child may seek an additional allowance (above the standard amounts) in a contested proceeding, subject to statutory caps and strict timelines.

What the Statutes Say

Exceptions & Pitfalls

Deadline trap: If a personal representative has been appointed, you must apply within six months after letters are issued.
Source of payment: The allowance is assigned from personal property, not real estate.
Secured and tax liens: The allowance does not extinguish valid, perfected security interests or certain tax liens tied to specific assets.
Priority among family: The spouse’s allowance is awarded before any child’s allowance.
Contests: An interested person may challenge the award, amount, or assets within one year of the order.
Not a substitute for notice to creditors: Publishing and mailing creditor notices (when an estate is opened) may still be necessary for broader creditor protections.
Documentation: Incomplete asset information can delay assignment; bring statements, titles, and identifying details.

Helpful Hints

Make a concise list of personal property and account details before your Clerk appointment to speed review.
Bring multiple copies of the signed assignment to transfer assets at different institutions without delay.
If a PR already exists, mail or deliver a copy of your application promptly and keep proof of delivery.
Choose assets without liens when possible to avoid complications in retitling or collection.
If the estate later finds more personal property, ask the Clerk to award the remaining balance of the allowance.
Consider an additional allowance only if the decedent’s income and family needs justify it and time permits.

Sources & References

North Carolina Estate Administration Manual (North Carolina Bar Association CLE), Supplemented 10th Edition: Chapter III: Exceptions to Requirement of Formal Estate Administration (Family Allowances), III-8 to III-11, pp. 114–116; updates at XVIII-18e–f, pp. 1082–1083.
North Carolina Estate Administration Manual (North Carolina Bar Association CLE), Supplemented 10th Edition: Chapter VIII: Post-qualification Procedures (Payment of Claims), VIII-8, p. 221 (claim priorities).

Disclaimer: This article is general information about North Carolina law, not legal advice. Reading it does not create an attorney-client relationship.

Talk to a Partition Action Attorney

If you’re dealing with a North Carolina year’s allowance or protecting personal property from estate creditors, our firm has experienced attorneys who can help you understand your options and timelines. Call us today at (919) 341-7055.

What is a year’s allowance and how does it protect assets from creditors?