Understanding Small Estate Affidavit Settlement in NC

Not all cases necessitate a full-scale administration when settling an estate in North Carolina. This is particularly relevant for smaller estates, where the legal process can be streamlined through alternatives to the usual, more complex procedures. One of these alternatives is the Collection of Property by Affidavit, also known as a Small Estate Affidavit.

This method offers a more efficient way to gather and allocate personal property, bypassing the formalities of standard administration. You may have questions about the critical aspects of using a Small Estate Affidavit and how it provides a simpler path than traditional estate administration methods.

So, let’s answer your questions while exploring the key aspects of the Collection of Property by Affidavit and how it differs from formal administration.

Does Every Estate Need a Probate Process in Court?

Not every deceased person’s estate requires an entire administration. There are several alternatives available.

One such alternative is the Collection of Property by Affidavit, which allows for the efficient collection and distribution of personal property without formal administration.

Collecting and Distributing Personal Property of the Decedent’s Estate

NC Law provides a way for a person authorized by the clerk to collect and distribute the decedent’s personal property. This person, often referred to as a “collector by affidavit” or an “affiant,” is appointed by the court and has the authority to carry out the necessary tasks.

G.S. Chapter 28A, Article 25 governs the collection of property by affidavit.

Is a Collector By Affidavit Different from a Personal Representative in Probate Court?

It’s important to note that a collector by affidavit differs from a collector appointed under G.S. Chapter 28A, Article 11. The latter is appointed when there is a delay in appointing a personal representative (PR) and has similar powers to that of a PR.

What Requirements Are There For This Type of Administration?

• Thirty-day waiting period: The collection of property by affidavit is not available until thirty days after the decedent’s death.
• Value of the estate: If the value of the decedent’s personal property, minus liens and encumbrances, does not exceed $20,000, the estate may qualify as a “small estate.” In such cases, property can be collected by affidavit. However, if the affiant is the surviving spouse, the sole heir, and not disqualified under G.S. 28A-4-2, the valuation limit increases to $30,000. Additionally, the $60,000 year’s allowance remains available and can be used in addition to the small estate limits to collect personal property without using a full estate administration process.

For example, if the total value of the decedent’s personal property is $68,000, and a spousal allowance of $60,000 has already been paid, the remaining $8,000 can be collected through the affidavit.

• Real estate and discharge of debts: The value of real estate does not affect the eligibility for collection of property by affidavit. However, both real and personal property are considered assets available for the discharge of debts and claims against the estate.

How is Affidavit Settlement Different From a Full Administration?

Collection of Property by Affidavit differs from formal administration in several ways:

• Bond and oath: A collector by affidavit does not need to get a bond or take an oath, unlike in formal administration.
• Limited authority: A collector by affidavit has limited authority and is not a personal representative or a collector.
• No inventory requirement: While a collector by affidavit does file a preliminary inventory, they do not need to file the 90-day inventory form provided by the Administrative Office of the Courts.
• No notice to creditors: It is not necessary to publish a notice to creditors when using the Collection of Property by Affidavit. For cases where the benefits of running a notice to creditor are outweighed by the inconvenience and cost of a full estate administration process, this expedited process may be appropriate.
• No commission entitlement: A collector by affidavit is not entitled to a commission for their services.

What are the common mistakes when using this type of estate administration?

When using the Collection of Property by Affidavit, it’s essential to consider the following:

• Formal controls: The clerk has fewer formal controls over the collection of property by affidavit compared to formal administration. The lack of an oath, audit, approval of the final affidavit, bond requirement, and notice to creditors provides fewer safeguards.
• Creditor rights: Collection of property by affidavit does not prevent creditors of the decedent from making claims against the estate.
• Accountability: Heirs or creditors who receive property through the affidavit are accountable to a subsequently appointed PR or collector and any other party with an interest in the estate.
• Disagreements and disputes: With disagreements among heirs or disputed claims among creditors, it is advisable to appoint a PR or a collector and proceed with formal administration.
• Net value of the estate: If the net worth of the decedent’s estate is close to the $20,000 limit (or $30,000 for a surviving spouse who is the sole heir), the clerk may provide information on the availability of full administration.

Who Can Request This Alternative to Full Administration?

The following individuals are eligible to request collection of property by affidavit:

• Heirs of the decedent.
• Public administrators appointed under G.S. 28A-12-1.
• Creditors of the decedent.
• Persons named or designated as executors in the decedent’s will.
• Devisees of the decedent.

It’s important to note that there is an established priority for appointing a Personal Representative or a collector. However, the statutes governing collectors by affidavit do not specify a priority among those who may request collection by affidavit.

What needs to be in the Affidavit?

To initiate the collection of property by affidavit, the affiant must file a qualifying affidavit. The affidavit must include the following information:

• Name and address of the affiant.
• If applicable, a statement that the affiant is the surviving spouse entitled to all the property of the decedent under the will or the Intestate Succession Act. This would only apply if a small estate affidavit is attempting to control property over $20,000 in value, but less than $30,000 in value.
• A statement indicating the affiant’s role as a public administrator, creditor, heir, executor, or devisee of the decedent.
• Forms such as AOC-E-203A or AOC-E-203B may be used for the affidavit, depending on the date of the decedent’s death. These forms facilitate the collection and administration of personal property but do not include language related to probating the decedent’s will. If a will needs to be probated alongside the affidavit, a separate application for probate should be submitted. You can submit a petition to probate a Will without requiring a full estate administration process. The probate of a Will is often combined with a small estate affidavit.

The Simple Alternative

The Collection of Property by Affidavit offers a simplified alternative to full administration for small estates in North Carolina. It allows for the efficient collection and distribution of personal property, provided certain conditions and limitations are met.

Understanding the differences between collection by affidavit and formal administration can help avoid a lengthier and more expensive process when an alternative is available.

We Can Help

At Hopler, Wilms, and Hanna, our experienced team of estate administration attorneys can help guide you through the intricacies of the Small Estate Affidavit process. We understand that dealing with estate matters can be overwhelming, especially during times of grief. That’s why we’re committed to providing compassionate and knowledgeable support, ensuring the estate settlement process is as smooth and stress-free as possible.

Our team is well-versed in North Carolina’s estate laws and can offer tailored advice to meet your unique needs. Whether you’re unsure about the eligibility for a Small Estate Affidavit or need assistance with the necessary paperwork, we are here to help every step of the way.

Get in touch today at (919) 244-2019, email us at law@hoplerwilms.com, or request an online appointment , and learn more about how we can streamline the administration of your loved one’s estate through techniques like the one described in this article.