After a loved one passes away, it may be tempting to simply “divvy up” their property among family members. However, that would not be effective to legally transfer title. The estate must go through a legal proceeding before property can be legally transferred. Probate is initiated by submitting a petition with the probate court. In North Dakota, the District Court system has jurisdiction over probate cases. There is a district court in each of North Dakota’s 53 counties. The rules that govern the probate process are found in the North Dakota Century Code. N.D. Cent. Code § 30.1
Under the supervision of the District Court, the personal representative is responsible for managing the process, including the executor duties and responsibilities. If there is a will, the personal representative is typically the person the decedent named in the will as executor. If that person is unable or unwilling to serve, or if there is no will, then state law provides rules for determining who can be appointed. N.D. Cent. Code § 30.1-13-03.
While the sole focus of probate appears to be on the transfer of assets, the payment of the decedent’s debt is equally as important. One of the first tasks that the personal representative must complete is to inventory estate assets to determine the value of the property in the estate. By doing this, the personal representative will understand what property is available to use to pay debt and to distribute to beneficiaries and heirs.
The personal representative must also notify the decedent’s creditors. Within three months after mailing or publishing the Notice to Creditors, creditors must file their claims against the estate. The personal representative will review each claim and decide whether to allow or disallow it, based on whether it has been substantiated. Written notice must be given to creditors whose claims are disallowed.
In addition to paying creditors, before distributing assets the personal representative must also pay the decedent’s funeral and burial expenses and expenses related to estate administration. The personal representative is required to file outstanding tax returns and pay taxes owed.
Finally, assets can be distributed. If the decedent left a will, assets would go to beneficiaries based on the provisions of the will. In the absence of a will, the administrator must follow North Dakota’s intestate succession rules. N.D. Cent. Code § 30.1-04. Under the rules a decedent’s spouse, children, and parents are the next of kin and are entitled to the decedent’s entire probate estate. The parents of the decedent will only share in the estate if the decedent had no children. Siblings are next in line to inherit in the absence of a surviving spouse, children, or parents.
Probate litigation occurs when there are disputes during the probate process that the parties are unable to resolve on their own through negotiation. As a result, the parties bring their disagreement to court so that the judge can hear arguments and resolve the issue. Common probate disputes that can lead to litigation include:
- Will contest
- Will construction
- Creditor claims against the estate
- Guardianship disputes
- Fiduciary misconduct
- Failure to account
Probate litigation can only be initiated by those who are deemed interested parties such as beneficiaries, heirs, creditors, the personal representative, and other fiduciaries.
Small Estate Alternatives
According to North Dakota law, there are 2 options that allow for expedited transfer of assets if the value of the estate does not exceed a threshold amount.
Collection of Personal Property by Affidavit
If an estate is worth no more than $50,000, then the property can be transferred to someone claiming the property without the estate having to go through formal administration. The person claiming to have right to the property is referred to as the “successor of the decedent.” To use this expedited process, certain requirements must be met, including the expiration of a 30-day waiting period. If the request is approved the successor of the decedent can present the affidavit to the person holding the property and the person must deliver the property. N.D. Cent. Code § 30.1-23-01
Summary Administration Procedure
The second option for estates with minimal assets is the summary administration procedure option. Here, the personal representative may immediately distribute estate assets and file a closing statement with the court. Unlike with formal probate, with this summary procedure no notice is required to be given to creditors before asset distribution. To qualify for this procedure, the estate must be worth less than the amount outlined in the statute. A closing statement must be filed with the court. N.D. Cent. Code § 30.1-23-01.