The house: likely one of your most valuable (monetary) assets, and certainly the one you’ve spent the most time (and elbow grease) enjoying and improving. Homes are often the asset that families care about the most, but they’re also the asset that most misunderstood when it comes to estate planning. Clients will often ask: “What happens to the house when I die”, and “how can estate planning make the process easier for my family?”
North Carolina Real Estate and Death
Unlike many other states, North Carolina allows real estate to pass outside of the estate of the deceased owner, according to the owner’s Will (or intestacy, if they have no Will) – i.e, the real estate is generally a non-probate asset. This general rule yields to one major exception: real estate can be clawed back into the deceased’s estate if the estate is otherwise insolvent, and the real estate is needed to pay the debts of the decedent.
Wills and North Carolina Real Estate
Even though real estate is considered to be a non-probate asset, it’s still very important to have a will in place. Your will appoints an executor to settle your estate, and designates the beneficiaries who will receive title to the real estate. Without a will, intestacy controls and may result in an undesired ownership structure. Problems with inherited real estate often start with the lack of a will.
The beneficiaries of the will receive legal title to the real estate immediately at death, and their date of ownership is backdated to date of death when the will is submitted to the clerk of court in the county where the property is located.
Selling Decedent Property
Even though the beneficiaries have legal title immediately, they may not be able to sell the house right away. Generally speaking, there must be a showing that the above creditor claw-back provision will not be needed. This is done by running a Notice to Creditors in the local paper putting unknown creditors on notice of the owner’s death. The Notice is needed if the heirs intend to sell the property within two (2) years of the owner’s death.
Additionally, if the owner’s will has a “Power of Sale” clause allowing the Executor to sell the owner’s real estate, the Executor can pull the home back into the estate and sell it, adding the proceeds to the estate and distributing the proceeds according to the will’s provisions.
Should I have a Trust for the House?
A common planning technique is to transfer the home into a revocable living trust to allow the property to avoid the above provisions (creditor attachment and the Notice to Creditors). This type of strategy is not right for everyone. Often for married couples this strategy will terminate their marital ownership in the property (Tenancy by the Entireties). Additionally, unless the beneficiaries need additional asset protection provisions, they will receive the property immediately at death, anyway. Whether or not this type of strategy is appropriate depends on the needs and wishes of the client, ultimately.
Author Bio
Paul Yokabitus
Founder & Estate Planning Lawyer
Paul Yokabitus is the founder of Cary Estate Planning, where he helps North Carolina families protect what matters most through wills, trusts, probate, and special needs planning. Known for his “planning, not paperwork” approach, Paul turns complex legal concepts into clear, practical strategies so clients feel informed and confident at every step. He has been recognized as a Business North Carolina Legal Elite attorney and a Super Lawyers Rising Star, and was named to the Triangle Business Journal’s 40 Under 40. A graduate of Campbell University School of Law, Paul lives in the Triangle with his wife, Alix, and their two sons.
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How We Help North Carolina Families
Paul and his team at Cary Estate Planning are fully committed to creating a personalized experience to develop thorough and comprehensive estate plans. They value their clients and go above and beyond to make sure that no details are missed. I would highly recommend Paul to anyone looking to create an estate plan.
I was referred to Paul by my Real Estate Attorney and I could not say enough about how exceptional the client service has been from everyone I spoke to. The communication is prompt and I feel like they really took the time to answer all my questions and set things up exactly as I wanted, but also recommended things to make it easier on my family down the line.
After attending one of Paul’s estate planning seminars, my husband and I knew we wanted Paul to assist us with our estate planning. His honest, professional approach to this necessary part of life put us at ease with the process. We will continue to recommend Paul and Cary Estate Planning.
We had a great experience working with Paul Yokabitus and the team at Cary Estate Planning to set up our Will and Estate Plan. The process was clear and easy, and in the age of COVID, our signing session was very well done, easy, and safe.
The Cary Estate Planning team will make sure that you have the information you need to be confident in your estate planning decisions. I learned so much from videos, a one-on-one in-person consultation, the website, emails, and a newsletter mailed the old fashioned way. The fee is very reasonable given the importance of estate planning. No matter the size or number of your assets, don’t procrastinate like I did!
Paul is a masterful attorney. He’s very good at taking your intentions and defining that into a durable Trust and Will. Best of all he is as simple and plain-spoken as you like. Or as fast as intellectual as you may be. It’s all about your your speed and your desired outcomes. Would strongly recommend this firm.
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