A look at some commonly asked questions that many people have about intestate estates in North Carolina.

1. UNDERSTANDING
INTESTACY IN
NORTH CAROLINA
CHERYL K. DAVID
North Carolina Estate Planning and Elder Law Attorney
A Look at Some Commonly Asked Questions
that Many People Have About Intestate
Estates in North Carolina

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In our second white paper on
intestacy in North Carolina, we’re
going to take a look at some
commonly asked questions that
many people have about intestate
estates. Unfortunately, because so
many people fail to create a last will
and testament, the chance that you
will have to deal with the insolvent
estate of a deceased family member
is rather high. If and when that
time comes, it’s important to know
as much about insolvency as
possible. It’s also good idea to
better understand what happens to
insolvent estates because you can
gain a better appreciation of what
benefits you and your family will receive if you decide to avoid intestacy by
creating an estate plan.
INTESTATE ESTATES AND ESTATE DEBTS
One of most commonly asked questions people have when someone dies intestate
involves the question of who is responsible for paying any unpaid bills. When a
person dies and leaves behind debts, those debt obligations must still get repaid.
Will the spouse have to repay these? The children who inherit property from the
decedent’s estate? Someone else?

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There is no single answer to this question, but in the vast majority of situation the
family members who survive a deceased person will not have any legal obligation
to repay unpaid debts. Those debts must be paid through the estate during the
probate process.
For example, let’s say you are an adult whose father is still alive but whose
mother has passed away. Your father dies leaving behind a sizable estate, but
does not leave behind a last will and testament or any kind of estate planning
device. Since you are the only child and there are no other living relatives, you
stand to inherit the entire estate.
However, your father also left behind some substantial debts. He still has a
sizable mortgage on his home, as well as several personal debts.
In this situation you would not be responsible for paying the mortgage or any
other debts. Instead, the personal representative who represents the estate will be
responsible for paying those obligations. Once probate begins, the personal
representative will notify any potential creditors that the estate has been opened.
Those creditors will then have a duty to contact the estate and file a claim for any
unpaid debts they believe they are owed. The personal representative will then
review these claims and pay them in a specific order as determined by North
Carolina law.
If, after reviewing and paying all the claims, there is still something left in the
estate, you will then be entitled to inherit that property. However, if the debt
obligations exceed the value of the estate assets, not only will you not receive an
inheritance, but some of those debts will have to go unpaid.

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The only situation in which you might be responsible for paying an estate debt is
if you entered into a joint debt agreement with your father. For example, if you
signed as a cosigner on the mortgage, you would still be responsible for paying
the mortgage regardless of whether you received an inheritance or if there was
enough money in the estate.
TAKING POSSESSION OF PROPERTY
In many intestate estate situations, the person who dies does not leave behind a
lot of property. In such situations there really isn’t a great need for probate, or for
someone to go to court to ask for permission to begin the estate settlement
process. In these situations, people inheriting from the estate can submit an
affidavit to claim their inheritances.
However, in situations where a deceased person has left behind substantial
assets, someone will have to manage the property. Because the decedent did not
leave a last will and testament, there is no clear guidance as to should take on this
responsibility.
In such situations it typically falls to a close family member or friend of the
deceased to begin the probate process. You do this by going to the local county
courthouse and filing the appropriate documents to open a new case. Once the
Clerk of the Superior Court—the North Carolina version of the probate court
judge—receives the petition to open the new estate, the clerk will then appoint a
personal representative.

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This personal representative is typically the person who filed the probate petition.
If the court approves, it will issue
a legal document called “letters
testamentary.” These letters give
the personal representative the
legal authority to begin taking
control over the decedent’s estate
in order to determine what should
happen to it. The personal
representative will also have the
legal responsibility to manage the
property until such time as new owners can take possession.
AVOIDING INTESTACY
If there is a single lesson to take away from our discussion of intestacy issues in
North Carolina, it’s this; intestacy is avoidable. Even by creating a very simple
estate plan that contains only a small number of tools, every capable adult in the
state of North Carolina can leave behind an estate that doesn’t have the
unanswered questions left behind by people who die intestate.
For example, a simple last will and testament will not only allow you to make
inheritance choices, but it will also allow you to name an executor. The executor
is simply a personal representative that you choose.
Instead of leaving it up to someone to choose to open the estate, appointing an
executor will give you the ability to choose someone with whom you feel

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comfortable, someone you know will be responsible when handling your affairs
after you die.
What’s more, other estate planning devices, such as revocable living trusts, will
give you much more flexibility when choosing inheritances and representatives.
Through a revocable living trust, for example, you can largely avoid the probate
process and the procedures that come with it.
Of course, choosing to create an estate plan is one thing, while actually creating a
plan that meets your needs is entirely another. If you’d like more information
about intestacy, estate plans, and what you can do about it all, contact our office
as soon as possible.

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ABOUT THE AUTHOR
Cheryl David is a graduate of UNC-Chapel Hill, the University
of Baltimore School of Law, and the prestigious Trial
Lawyer’s College presided over by Gerry Spence. A former
Administrative Judge, Cheryl is certified as an Estate
Planning Law Specialist by the ABA accredited Estate Law
Specialists Board, Inc. She is also a member of the American
Academy of Estate Planning Attorneys, Medicaid Practice
Systems and the National Academy of Elder Law Attorneys.
In 2008, Cheryl received the honor of becoming a Fellow
with the American Academy of Estate Planning Attorneys.
The Fellow program recognizes Academy Members who demonstrate advanced
expertise and significant practical experience in the total estate planning, trust, tax
planning, guardianship, probate and estate administration fields. In order to maintain
this advanced expertise, Cheryl takes over 36 hours of continuing education in Estate
Planning, Elder Law, and Taxation each year. Also a Financial Planner, she holds the
Series 7 and 66 Investment Licenses in addition to both Insurance and Long Term
Care/Medicare designations.
Her professional capabilities, together with over 25 years in practice, have combined to
bring positive change to the lives of over 4500 clients and their families.
528 College Road
Greensboro, NC 27410
Phone: (336) 547-9999
Fax: (336) 547-9477
WWW.CHERYLDAVID.COM