If you are a surviving spouse whose partner has just died in North Carolina, you may be worried about how you will get along financially while your partner’s estate is under administration, which can take some time to settle.
In this blog, we discuss the concept of a “year’s allowance,” which legally exists to ensure that the surviving spouse and dependent children have adequate funds while assets are frozen during the probate process. Probate is a legal proceeding involving the validation of a will or beneficiary designations to settle an estate.
The law in North Carolina goes to great lengths to respect and protect the marital bond, and spouses are entitled to various privileges. The Petition for the Year’s Allowance is a benefit to surviving spouses under North Carolina law.
Read on as our legal team at Carolina Family Estate Planning in Cary, North Carolina, explains this aspect of the estate settlement process. If you need the services of a probate lawyer, be sure to contact us to schedule your free case assessment.
What Is the Spousal Allowance?
The year’s allowance for the surviving spouse (spousal allowance) is a monetary payment from the estate of the person who died (decedent) to their surviving spouse. This small estate filing is a stop-gap measure that allows the surviving spouse to cover their immediate necessities while estate administration presumably ties up their assets.
The petitioning spouse is entitled to the first $60,000 of the decedent’s personal property. However, in some instances, the spouse can apply for an amount exceeding $60,000 if the estate is solvent. As a general rule, the maximum allowance equals 50 percent of the late spouse’s average annual after-tax income over the three years preceding their death.
When calculating a surviving spouse’s year’s allowance, the clerk of court will also consider other parties’ entitlement to an allowance from the deceased spouse’s estate. However, the spouse’s year’s allowance takes priority over judgments, liens, and unsecured claims from creditors.
Children’s Eligibility for a One-Year Allowance
According to N. C. Gen. Stat. § 30-17, the surviving child of a decedent might be eligible to the year’s allowance, provided that the child is:
- Under the age of 18 years
- Under the age of 22 years and a full-time student
- Under the age of 21 years and mentally incompetent
- Under the age of 21 years and totally disabled
In this context, the term “child” refers to the decedent’s:
- Biological child
- Adopted child
- Child with whom the widow may be pregnant at the death of her husband
Any individual under 18 who resided with the decedent and for whom the surviving spouse or decedent acted as guardian or stand-in parent might also be eligible for the year’s allowance. Each child who meets the above requirements is entitled to an allowance of $5,000.
Where Does Spousal Allowance Come From?
A decedent’s estate can consist of real property and personal property. Generally speaking, real property is immovable and can include land, buildings, mineral rights, and construction materials forming part of a structure.
Personal property includes movable assets in any form, such as vehicles, collectibles, and livestock. Bank accounts, insurance policies, securities, and pensions in the decedent’s name also fall under personal property.
The year’s allowance pays from the decedent’s personal property. If the personal property is not in North Carolina, the petitioning spouse can file an application at the magistrate or clerk of the court in the county and state where the personal property exists.
My Spouse Died Recently. How Do I Claim the Spousal Year’s Allowance?
In this video, we cover the three key things you need to do to claim the spousal allowance. The first thing to know is that you must claim the spousal allowance within one year of your spouse’s death, so don’t procrastinate on this.
- Assuming it’s been less than one year, your first step to claiming the spousal allowance is to file what’s called an “Application and Assignment of Year’s Allowance” with the Clerk of Court of the Superior Court in the county in which your deceased spouse resided. In some larger counties such as Wake County, the court has a specific estates division. We recommend you call first to inquire as to the specific process in your county and whether an appointment is required. When you meet with the clerk of court, the clerk will provide you with the applicable forms that need to be completed.
- Second, you’ll want to bring with you valid government-issued photo identification such as a valid driver’s license or passport, an original death certificate for your spouse, any original documentation relating to the assets you are claiming such as the original car title, bank statement, check, or similar. Also, most counties do not accept personal checks and while some counties accept credit or debit cards, they may impose a processing fee. Thus, we generally recommend bringing cash. The filing fee for the spousal allowance is currently $20.
- Third, once the clerk of court approves your application for the spousal allowance, you’ll take the court-stamped document to the applicable institution for updating the asset you’re trying to transfer into your name. For example, if it’s an automobile, you’ll take it to the DMV. If it’s a bank account, you’ll take it to the bank that holds the account. If it’s a check addressed to your spouse, you can take it to your bank with the court forms.
We know this can be a confusing and overwhelming time. You’re not alone. We help you claim the Spousal Year’s Allowance. If you need help determining your best course of action, give our office a call and we’ll help you figure out your next steps.
What Happens If Your Spouse’s Property Doesn’t Cover the Year’s Allowance?
In some cases, the decedent’s personal property is worth less than $60,000. When this happens, the surviving spouse can apply for a deficiency judgment against the estate.
Upon the discovery of other assets, the surviving spouse becomes the estate’s primary creditor with the right to transfer or withdraw the assets.
The deficiency judgment offers protection against creditor claims on the decedent’s estate and allows the surviving spouse to claim the total allowance amount over time.
Conditions for Disqualification
In some cases, the surviving spouse might not be eligible to claim the year’s allowance. The spouse loses their qualification for the year’s allowance if they:
- Waived their right to the allowance in a postnuptial or prenuptial agreement
- Are guilty of killing the decedent
- Lived in adultery when the decedent died
- Waited longer than a year after the decedent’s death to apply for the allowance
- Willfully abandoned the decedent before their death
- Did not have a valid marriage with the decedent
Carolina Family Estate Planning: Your Probate Attorney in Cary, North Carolina
Founder and attorney Jackie Bedard and the experienced legal team at Carolina Family Estate Planning can help you navigate the probate process and apply for the year’s allowance so you can cover your expenses. At Carolina Family Estate Planning, we help families build better lives by planning for a secure future via estate planning, asset protection, and long-term care planning. Call us today at 919-443-3035 to schedule a needs assessment call. We’re here to help.
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The information in this blog post (“post”) is provided for general informational purposes only and may not reflect the current law in your jurisdiction. No information in this post should be construed as legal advice from the individual author or the law firm, nor is it intended to be a substitute for legal counsel on any subject matter. No reader of this post should act or refrain from acting based on any information included in or accessible through this post without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from a lawyer licensed in the recipient’s state, country or other appropriate licensing jurisdiction.