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If you’ve found yourself in a situation where you’ve recently inherited house North Carolina house either from parents or a loved one, there are probably many questions you want to ask to know what to do next. Understanding NC inheritance laws and what to do when you inherit property can help relieve stress when it comes to the probate process.
There are many factors to consider after you’ve inherited a home. Whether you are the sole heir or there are multiple family members involved with the property, understanding the legal process and North Carolina state law for inheriting property is essential to making a sometimes stressful situation less overwhelming.
Read the following information on North Carolina inheritance law to better understand what you should do after receiving an inherited house.
What is Probate and Is It Required?
Probate is a legal and court-supervised process that identifies and gathers the assets of a deceased person, also referred to as a decedent. In simpler terms, probate is a process where a court determines how to dispense of a decedent’s estate.
Probate is required in North Carolina to carry out the decedent’s financial affairs after they have passed away. Probate also pays a decedent’s debts and dispenses the decedent’s assets to beneficiaries or family members according to the will.
Was There a Will?
Before the probate process can begin, it’s important to know if there was a will. The decedent’s remaining personal property should be outlined in their will, along with any information on life insurance policies, retirement accounts, and bank accounts.
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WHAT IS A WILL?
Wills are legal documents that regulate the distribution of your assets after death. A will can also appoint guardians for minor children.
In North Carolina, a will is only valid if it is signed by the person creating said will and two witnesses.
If the will is deemed valid, the probate process will begin.
What if there was no will?
In North Carolina, if you die without a valid will, your assets become known as “intestate.” The probate court will then follow intestate succession laws to determine who inherits your estate assets.
The probate court and probate judge will then appoint someone to serve as administrator of the estate. Any surviving spouse has the first priority of being appointed as administrator. The administrator is also known as the personal representative.
Executors and administrators are also known as personal representatives of the decedent’s estate.
Intestate Succession laws
If a person dies intestate (without a will), North Carolina intestate succession law will govern how intestate personal property and assets are to be distributed among heirs and beneficiaries. The purpose of this law is to make sure that intestate real estate, along with the rest of the deceased’s estate, is equally divided among surviving heirs.
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North Carolina intestacy laws
Under North Carolina inheritance law, spouses are given certain rights and benefits.
If you die intestate with a spouse, the intestate inheritance for your spouse will depend on whether or not you have living parents or descendants. Descendants include children, grandchildren, and great-grandchildren. If you have no living parents or descendants, your surviving spouse will inherit all of your intestate property.
If you die with parents but no descendants, your surviving spouse inherits half of the intestate real estate and the first $100,000 of personal property. If there is more than $100,000 worth of personal property, your spouse inherits half of the remaining personal property. Your parents will inherit half of the intestate real estate and whatever personal property remains after your spouse has received their share.
If you die with one child or descendants of that child, your surviving spouse inherits half of intestate real estate and the first $60,000 of personal property.
If you die with two or more children, or descendants of those children, your surviving spouse will inherit a third of intestate real estate and the first $100,000 of personal property.
If you die intestate, each of your children will receive an intestate share of your property. Legally adopted children have just as much right to their intestate real estate as biological children do. In addition, if the decedent placed their child up for adoption and that child was adopted by another family (other than your spouse) they are not legally eligible to receive an intestate inheritance from the decedent. However, foster children and stepchildren that were never legally adopted by the decedent are not eligible to receive a share as the decedent’s child.
If there are children conceived outside of marriage, they can still receive their share of the estate’s assets as long as they have been legally legitimated under North Carolina law, if the decedent acknowledged paternity, or if there are children born within one year of the decedent’s death and paternity was established through DNA testing.
In order to receive the inheritance, heirs must survive the decedent by at least 120 hours. Relatives conceived before you die but born after the decedent’s death are eligible to inherit as if they had been born while the decedent was alive. However, relatives born after the death of the decedent must be born within 10 months to be eligible to inherit.
Intestate real estate can be tricky since no will was completed. It is advised to write your own will or consult with an attorney when compiling your personal property assets to avoid such complications.
Because the probate process can be difficult and time-consuming, there are ways to avoid probate in North Carolina or to have a simplified probate procedure.
If the decedent’s personal property is valued at $20,000 or less, an affidavit process can begin which allows you to skip probate. If the surviving spouse is the sole heir, the amount goes up to $30,000.
Some assets and personal property do not have to go through probate court and can be dispensed to correct beneficiaries. Here are assets that do not have to go through probate in North Carolina:
- Any property in a revocable living trust
- Payable-on-Death bank accounts
- Retirement accounts like IRAs or 401ks
- Joint tenancy property
- Transfer-On-Death accounts
The simplified probate process may be used if the only surviving inheritor or heir is the decedent’s surviving spouse. The spouse must file a petition with the court, along with the will and supporting evidence.
What About Inheritance Tax?
In North Carolina, you are not required to pay state estate tax or inheritance tax on the property. North Carolina residents should take into account that federal estate tax is required if the estate is worth more than $12.06 million.
However, some assets such as life insurance policies and retirement accounts may be subjected to additional taxes.
Even though North Carolina does not have an inheritance tax, you will still need to pay final federal and state income taxes.
Contacting a law firm or an experienced estate planning attorney can help you understand the North Carolina laws and taxes when a family member or loved one has passed away.
What Are My Options With Selling Inherited Property?
Once you have established and completed the estate claims and estate administration, you can begin thinking about what to do with your inherited house.
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Determine the value of the home
To determine the value of the home, hire a home inspector or have an appraisal done of your property. This will help you figure out if the home is in good condition or if extensive repairs are needed.
You might also want to consult with a real estate agent to help figure out the market value of your home.
Determine The Expenses Of The Home
After you have inherited a deceased person’s estate, you will need to determine any expenses associated with the decedent’s personal property.
Keep in mind that once the property passes to you, you might have mortgage payments or you might have to pay debts associated with the property.
Other expenses might include property insurance, liability insurance, local or state taxes, electricity, water, sewer, landscaping, etc. All of those expenses will need to be paid regularly if you decide to keep the property.
Determine If You Want To Rent Or Sell
If you want to keep the inherited home and rent it for extra income, it would be wise to make sure it’s in livable condition. You could consider hiring a property management company to handle the details of renting the property.
If you are sharing the inherited home with other surviving family members, it would be wise to discuss with them the best option moving forward.
Selling a family home can be an emotional time for all family members. Before renting or selling, make sure all remaining personal property has been taken out of the home.
Learning North Carolina inheritance laws can provide you with the assistance needed when inheriting property from a loved one. Remember that hiring an experienced attorney could also provide you with the guidance needed during this difficult situation.