Does your state use terminology different from that provided in 4:04.1 of the Underwriting Manual? If so, please identify and define such terms. Provide statutory citations.

Terminology used for North Carolina is same as is used in Section 4:04.1 of the Underwriting Manual.

Is there a statutory time limit for (a) probating a decedent's will, or (b) opening administration of an Intestate's estate? If so, specify for both situations. Provide statutory citations.

N.C.G.S. Section 31-12 states that an executor of a will may at any time after the death of the testator apply to have the will admitted to probate. However, the statute goes on to say "such will shall not be valid or effective to pass real estate or personal property against innocent purchasers for value unless it is offered for probate within two years of the date of the death of testator.

At any time after the death of the intestate, any heir, surviving spouse or creditor may make application with the Clerk of Court to be named Personal Representative of the decedent's estate. (N.C.G.S. Section 28A-4-1(b)). To quality one must be over the age of 18, mentally competent and a resident of the state. (N.C.G.S. Section 28A-4-2).

Does the disposition of property under the laws of intestacy depend upon any of the following classifications of property or rights in property: Community, separate, tenancy by the entirety, dower, curtesy, etc.? If so, summarize. Provide statutory citations.

Yes. North Carolina does not recognize community or separate property. Husbands and wives may hold title to property as tenants by the entirety. Title to the property automatically passes to the survivor upon the death of the first tenant regardless of what disposition a will may make of the property or regardless of whether or not a will exists. Judgments against one party cannot attach to property held as tenants by the entirety, nor can creditors of the deceased execute against property that was held by the entireties. Davis v. Bass 188 NC 200 (1924).

Dower and Curtesy have been abolished in North Carolina by passage of the Intestate Succession Act of 1959. N.C.G.S. Section 29-1 et seq.

Intestate Succession applies whenever a party dies without a will. If real estate was not held as tenants by the entirety then property is disposed of as follows (N.C.G.S. Section 29-14):

• If the intestate is survived by one child, or any lineal descendant of one child then the surviving spouse is entitled to a one-half interest in real property plus $30,000.00 cash to be paid from the net personal property of the decedent. If the decedent's net personal property is greater than $30,000.00 then the surviving spouse is entitled to $30,000.00 plus one-half the balance of personal property.
  
  
• If the intestate is survived by two or more children, or by one child and any lineal descendant of one child, or by lineal descendants of two or more deceased children then the surviving spouse shall be entitled to a one-third interest in real property plus $30,000.00 cash to be paid from the net personal property of the decedent. If the decedent's net personal property is greater than $30,000.00 then the surviving spouse is entitled to $30,000.00 plus one-third the balance of personal property.
  
  
• If the intestate is not survived by any children or lineal descendant of any child but by one or more parents then the surviving spouse is entitled to a one-half interest in real property plus $50,000.00 cash to be paid from the net personal property of the decedent. If the decedent's net personal property is greater than $50,000.00 then the surviving spouse is entitled to $50,000.00 plus one-half the balance of personal property.
  
  
• If the intestate is not survived by any children, lineal descendant of any child or either parents then the surviving spouse shall be entitled to all of the real and personal property of the deceased.

N.C.G.S. Section 29-30 provides that in lieu of the interest set out under the Intestate Succession Act above, the surviving spouse of an intestate may elect instead to take as their share a life estate in one third in value all of the real estate in which the deceased spouse was seized at the time of their death. Regardless of the fractional interest accruing to the surviving spouse, in addition the surviving spouse shall be entitled to a life estate in the parties dwelling as well as fee simple ownership in the household furnishings.

This is called an Elective Interest and must be filed within 12 months of the death of the decedent if letters of administration have not been issued, or within one month of the expiration of time to file claims against the estate if letters have been issued. (N.C.G.S. Section 29-30(c)).

N.C.G.S. Section 30-15 provides that every surviving spouse of an intestate or testator, whether or not they have dissented from the will, shall be entitled to an allowance, for their support, of $10,000.00 to be paid out of the personal property of the estate. This allowance is charged against the interest of a devisee where there is a will.

N.C.G.S. Section 30-17 provides for the payment of $2,000.00 per child, for the support of said children who are under the age of 18 or under the age of 22, but not a student in college.

Does your state recognize joint tenancies? If so, describe the procedure necessary to pass title held in joint tenancy upon the death of a joint tenant. Provide statutory citations.

Under N.C.G.S. Section 42-1, North Carolina recognizes conveyances made as joint tenancies for conveyances occurring on or after January 1, 1991. Before that date joint tenancies were only recognized if the parties had entered into a written contract between themselves which provided for survivorship. This doctrine arose out of the case of Vettori v. Fay 262 NC 481 (1964).

Does your state provide for any special benefits to a surviving spouse or family that allow them to take property contrary to will provisions? Provide statutory citations.

N.C.G.S. Section 30-1 permits a spouse to dissent from a will provided the aggregate value devised to them is less than their intestate share would be. If a spouse elects to dissent from a will they may choose either their intestate interest or the Elective Interest set out above. (N.C.G.S. Section 30-3 and N.C.G.S. Section 29-30(a)).

Summarize the steps required for a testate administration. Provide statutory citations.

Testate:

N.C.G.S. Section 31-12 states that an executor of a will may at any time after the death of the testator apply to have the will admitted to probate. However, the statute goes on to say "such will shall not be valid or effective to pass real estate or personal property against innocent purchasers for value unless it is offered for probate within two years of the date of death of the testator". If no Executor applies to have the will proved within 60 days after death of the testator, any devisee of the will may make such application. (N.C.G.S. Section 31-13).

North Carolina follows the Uniform Probate Code and recognizes self proved wills. Wills not conforming to the UPC must be proved by the testimony of the two subscribing witnesses. (N.C.G.S. Section 31-18.1).

Application is made to the Clerk of Court who issues Letters Testamentary appointing the Executor as Personal Representative of the estate, if the Executor qualifies. ( N.C.G.S. Section 28A-4-1(a)). The Personal Representative is required to take an oath of office as set out under N.C.G.S. Section 28A-7-1.

Unless the will waives the posting of bond the executor will be required to post a bond according to a formula set out under N.C.G.S. Section 28A-8-2.

Within 20 days of being granted Letters Testamentary, the Personal Representative shall notify, by publication, all creditors that they have six months from the first publication of notice in which to present claims against the estate. The notice must be published once a week or four consecutive weeks. (N.C.G.S. Section 28A-14-1)

The Personal Representative is required to file an annual accounting of any property in his possession and produce receipts for all payments made in behalf of the estate. The annual accounting must be filed with the Clerk of Court no later than the 15th day of the 4th month after the close of the fiscal year of the estate. (N.C.G.S. Section 28A-21-1) The final account must be filed within one year of his qualification as Personal Representative or within 6 months after receipt of the state inheritance tax release, whichever is later. (N.C.G.S. Section 28A-21-2)

After the payment of costs of administration, taxes and all valid claims against the estate, the Personal Representative will then distribute the remaining assets of the estate in accordance with the terms of the decedent's will or the provisions of Chapter 29 of the General Statutes (Intestate Succession) (N.C.G.S. Section 28A-22-3)

A final affidavit is then filed with the Clerk of Court outlining what real and personal property has been collected and distributed, showing the payment of any surviving spouses year's allowance, the payment of claims and expenses and the distribution of property. (N.C.G.S. Section 28A-21-2(a)).

Summarize the steps required for an intestate administration. Provide statutory citations.

Intestate:

At any time after the death of the testator, any heir, surviving spouse or creditor may make application with the Clerk of Court to be named Personal Representative of the decedent's estate. (N.C.G.S. Section 28A-4-1(b)).

The procedure is the same as for testate administration.

Every county has a Public Administrator who is appointed by the Clerk of Court. N.C.G.S. Section 28A-12-1. In the event that an estate has not been opened or Letters Testamentary issued within 6 months of the date of death of the decedent the Public Administrator may make application for Letters of Testamentary. N.C.G.S. Section 28A-12-4. Once letters have been issued to the Public Administrator he has the same authority and duties as any Personal Representative. N.C.G.S. Section 28A-12-5.

Is there a procedure or documentation customarily accepted by the bar to indicate heirship which is not based on a statute or cases? (e.g. Affidavits of Heirship) If so, describe the procedure and furnish a sample of any forms.

Affidavits of heirship are typically used as well as relying upon the determination of heirs as listed in the application of Letters Testamentary in the decedent's estate file.

Are there any short or abbreviated probate procedures provided for by statute? If so, summarize. Provide statutory citations.

N.C.G.S. Section 28A-25-1 provides that estates of decedents leaving personal property, with a net value of $10,000.00 or less may be administered by the filing of an affidavit. The affidavit may be filed after 30 days from the date of death by any creditor or heir or the decedent. The affidavit must set forth the name and address of the affiant, whether they are an heir, the name of the decedent and their place of residence, that 30 days has elapsed since the death of the decedent, that the net value of the decedent's personal property does not exceed $10,000.00, the names and addresses of those persons entitled under the provisions of Intestate Succession to the personal property of the decedent and their relationship to the decedent, a description sufficient to identify each tract of real property owned by the decedent and that there is no application pending for appointment of a Personal Representative. In those cases in which the affiant is also the surviving spouse and sole heir of the decedent, the personal property may exceed the $10,000.00 limitation, but may not in any case exceed $20,000.00.

The affidavit is filed with the Clerk of Court along with the application fee required under N.C.G.S. Section 7A-307. The affidavit shall be sufficient to transfer title to motor vehicles, ownership of savings and checking accounts, and stock.

The person who has collected the property of the decedent pursuant to such affidavit shall disburse and distribute payment of the surviving spouse's years allowance, pay all debts and claims against the estate and distribute the remainder of personal property to those entitled. N.C.G.S. Section 28A-25-3(a).

An affidavit is then filed with the Clerk of Court showing property collected and distributed. The final affidavit must be filed within 90 days of the qualifying affidavit. N.C.G.S. Section 28A-25-3(b).

Are there any other probate or alternative probate procedures available in your state that haven't been described? If so, summarize. Provide statutory citations.

Yes. N.C.G.S. Section 28A-25-6 provides an alternative to the Small Estate Administration covered under 9 above. Any person indebted to the decedent may satisfy such indebtedness by paying the amount of the debt to the Clerk of Court provided:

• No administrator has been appointed;
• The amount owed is less than $5,000.00;
• Such payments may not be accepted if the total amount paid will exceed $5,000.00. If the total is to exceed $5,000.00 the clerk must appoint an administrator.
• The Clerk may disburse money collected to pay the surviving spouse's years allowance and child allowance and all other claims set out under N.C.G.S. Section 28A-19-6. Under this alternative statute the Clerk is not required to publish notice to creditors.

Does your state statutes provide for an ?inheritance? tax? If so, is it based on (a) an heir's share of the estate or (b) is it an estate tax on the total value of the estate, or (c) on another basis? When must the inheritance tax return be filed? Provide statutory citations.

North Carolina imposes an inheritance tax based upon the total value of the estate. However, the rate of the tax is determined by what class the recipient falls into. N.C.G.S. Section 105-4. There are three classes, A,B and C. Class A are the lineal descendants and step children and receive the lowest rate of tax. Class B applies when the recipient is a brother, sister, aunt or uncle of the descendant. Class C applies to everyone else and has the highest rate.

An inheritance tax return must be filed by the Personal Representative unless the property transferred falls under one of the exempt categories set out in N.C.G.S. Section 105-3, or the value of the estate is less than $450,000.00 and all of the beneficiaries are Class A beneficiaries. N.C.G.S. Section 105-23(b).

The inheritance tax return must be filed by the Personal Representative within 9 months of the date of their qualification as Personal Representative. N.C.G.S. Section 105-23(a). Any taxes owed must be paid by the Personal Representative with two years from the date of their qualification. .N.C.G.S. Section 105-28. The Personal Representative must file an inheritance tax return waiver with the register of deeds as evidence the real property of the decedents estate is not subject to any inheritance taxes.

Does your statutes provide for an inheritance tax lien? If so, summarize, e.g. What are the requirements for (a) attachment, (b) perfection; and (c) enforcement of the inheritance tax lien. Is there a statute of limitations for the inheritance tax lien? If so, specify. Provide statutory citations.

N.C.G.S. Section 105-31 imposes a lien on all property in the decedent's estate for unpaid inheritances taxes. Title cannot pass to property or funds until the inheritance tax has been fully paid or a waiver has been obtained from the Secretary of Revenue.

The Personal Representative is obligated to file the inheritance tax return under N.C.G.S. Section 105-23(a). The Personal Representative must file an inheritance tax return waiver with the register of deeds as evidence the real property of the decedents estate is not subject to any inheritance taxes. N.C.G.S. Section 105-20.

With every estate administered, N.C.G.S. Section 105 -22 requires that the Clerk of Court ascertain the names and addresses of all Personal Representatives, heirs and devisees and forward same to the Secretary of Revenue unless the estate is exempt from filing an inheritance tax return.

The lien for unpaid inheritances shall be for a period of 10 years from the date of the death of the decedent. N.C.G.S. Section 105-20. In addition to imposing a lien on all property of the decedent's estate, N.C.G.S. Section 105-31 gives the Secretary of Revenue authority to bring any action in any court against any person or entity responsible for payment of said taxes. The Secretary of Revenue has 20 years from the date of death of the decedent in which to bring an action to collect inheritance taxes. N.C.G.S. Section 105-32.

Summarize the steps of the procedure for the sale of real property during the pendency of an intestate administration. Provide statutory citations.

Property may be sold under two methods during the pendency of an intestate administration.

The most common method to sell property is for the purpose of obtaining money with which to pay the debts of the estate. The Personal Representative selects the property, which in his judgment will promote the best interest of the estate, and files a special proceeding with the Clerk of Court seeking an order of sale. N.C.G.S. Section 28A-15-1. The petition must make the intestate heirs a party to the action. N.C.G.S. Section 28A-17-4. If the Clerk determines it is in the best interest of the estate to sell the property he will issue an order of sale. Property may then be sold at a public sale. Private sales are permitted only if the Clerk determines that it is in the best interest of the estate to sell by private sale.

The second method of selling property in an intestate estate is for the Personal Representative to run the first publication giving notice to creditors and have all of the heirs join in the conveyance, along with the Personal Representative. N.C.G.S. Section 28A-17-12(a)(2). Sales may be made by the heirs and without joinder of the Personal Representative and without giving notice to the creditors if the sale takes place more than two years after the death of the decedent. N.C.G.S. Section 28A-17-12(b).

Can a personal representative for a testate administration sell real property of the estate without obtaining a court order? If so, please identify any requirements? Any limitations? Provide statutory citations.

The Personal Representative can sell property during the pendency of a testate administration if real property has been devised to them in the will and they are instructed to sell and distribute the proceeds. Montgomery v. Hinton 45 NC APP 271 (1980).

N.C.G.S. Section 28A-15-1(c) states that property may be sold by the Personal Representative without court order in instances where funds need to be created for payment of debts of the estate, provided the will has incorporated power of sale provisions by fiduciaries under N.C.G.S. Section 32-27(2).

Property in a testate estate may also be sold by the joinder of the devisees, along with the joinder of the Personal Representative in the same manner as a sale in an intestate estate.

When, if ever, must a personal representative of a testate administration obtain a court order to sell real property of the estate? Summarize the steps of such procedure. Provide statutory citations.

If the will does not grant power of sale to the Personal Representative then the Personal Representative must file a petition pursuant to N.C.G.S. Section 28A17-4 and request an order of sale from the Clerk of Court. N.C.G.S. Section 28A-15-1(c).

Does your state statutes provide for the probate of foreign wills (wills of testators not domiciled in your state)? If so, summarize the provisions and procedures. Provide statutory citations.

Yes. N.C.G.S. Section 31-27(a) provides that have been probated in another state, according to the laws of that state, may be admitted to probate in North Carolina upon the production of a duly certified copy of the will and probate proceedings to the Clerk of Court of the county in which the testator owned property.

If the will has been made out of state, but not yet probated in another state and is offered for probate in North Carolina N.C.G.S. Section 31-23 provides a procedure to have that will probated in this state. When the will is offered for probate, the Clerk of Court may issue a commission to a person he selects to take the examination of the witnesses under the will. The commissioner, having taken the examination of the witnesses and satisfying himself the will is duly proved may then return the will along with the examination to the Clerk for probate.