Probate

Probate is a legal, public process of settling a decedent's estate. In North Carolina, the administration of a decedent's estate is administered by the clerk of superior court. The clerk of superior court reviews wills, determines the validity of the will, and ensures that the terms of the will are carried out properly by the personal representative of the estate. Estates that have a will are known as testate estates, and an executor is often nominated in the will, and then appointed as the personal representative by the clerk of superior court. Estates that have no will, known as intestate estates, must also go through the probate process and the decedent's assets are distributed according to the laws of North Carolina. For an intestate estate, the clerk of superior court will appoint a personal representative, known as an administrator. Probate takes place in the county the decedent resided.

What passes through probate?

Items that must be probated include all real and personal property that passes by will for a testate estate, and all real and personal property that would pass by intestate succession if you do not have a will. Property that would be subject to probate with or without a will would include assets owned individually with no beneficiary designations, as well as property owned as tenants in common. Also, any item that you leave specifically to your estate, i.e. retirement account with beneficiary as "my estate" would be included in probate.

What items are excluded from probate?

Basically, any item that has a beneficiary designation or is held jointly with right of survivorship would be excluded from probate, as long as the beneficiary is not the decedent's estate. These items are called "will substitutes" because the items pass outside of the will. These items would include, but are not limited to:

• Accounts owned jointly with right of survivorship
• Payable on Death Accounts
• Transfer on Death Accounts
• Retirement, Pension, IRA Accounts
• Life Insurance Policies
• Joint and Survivor Annuities
• Revocable Living Trusts

All of these items, upon the death of the decedent would pass directly to the designated beneficiary. Failing to leave a beneficiary designation on the above listed items would result in your estate becoming the beneficiary and therefore subject to probate.

Whether or not your wish for your items to pass through probate, you may wish to have an estate plan. If you do not decide how your items will pass upon your death, be it through a will or will substitute, then the laws of the state will decide for you. For more information about trust services or estate planning, please contact your local branch office and ask to speak to a trust representative.

Trust Services offered through MEMBERS Trust Company, a federal thrift regulated by the Office of the Comptroller of the Currency. Trust products are not credit union deposits, are not insured by the NCUA or any other federal government agency, are not obligations of or guaranteed by the Credit Union, MEMBERS Trust Company or any affiliated entity, and involve investment risks, including the possible loss of principal. The material above is for educational purposes only and is not intended to provide legal or tax advice regarding your situation. For legal or tax advice, please consult your attorney and/or tax professional.