application and assignment year's allowance

NC Probate: The Petition for the Year’s Allowance

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

surviving spouse with kids looking out at ocean | North Carolina Probate-Estate-Trust Administration Lawyer

According to N. C. Gen. Stat. § 30-17 , the surviving child of a decedent might be eligible for 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 is paid 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.

Application and assignment year’s allowance Form AOC E-100 | North Carolina Probate-Estate-Trust Administration Lawyer

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.

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.

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More changes to the year’s allowance in decedents’ estates: the procedure to claim and assign the allowance.

* Update, March 1, 2024: The N.C. Administrative Office of the Courts published revised year’s allowance forms in connection with the changes enacted by Session Law 2023-120. They are AOC-E-100 , Petition and Assignment Year’s Allowance and AOC-E-101 , Deficiency Judgment. Both the revised and previous version of the forms are available on the AOC’s website. The revised forms should be used for the estates of decedents dying on or after March 1, 2024. The previous version of the forms should be used for the estates of decedents dying on or before February 29, 2024.

This is the third and final post in a series that focuses on changes to the year’s allowance in decedents’ estates resulting from Session Law 2023-120 . This post discusses the process to apply for the spousal and child’s allowance. The statutory changes are effective for decedents dying on or after March 1, 2024. You can access my two previous posts in this series here and here .

Elimination of the Personal Representative and the Magistrate from the Process to Apply

For decedents dying before March 1, 2024, the statute contemplates that the spouse or eligible child first requests the personal representative (PR) or collector of the estate apply to the court to assign the allowance. See G.S. 30-16; -17. If there is no PR or the PR fails or refuses to apply, the person entitled to apply for the allowance may file the application directly with any magistrate or the clerk of superior court in any county where the property is located and the magistrate or clerk assigns the allowance. G.S. 30-16; -17.

For decedents dying on or after March 1, 2024, (i) the duty to first apply to the PR is removed; and (ii) the magistrate no longer has the authority to assign an allowance. A person eligible to apply for an allowance claims the allowance by filing a petition directly with the clerk of superior court. S.L. 2023-120, sec. 1.2, amending G.S. 30-15(a), -17(b). These changes largely conform with existing practices that occur in the approximately 20,000 allowance filings per year in North Carolina.

The Claim for an Allowance is Initiated by a Verified Petition

Another change resulting from S.L. 2023-120, and applicable to decedents dying on or after March 1, 2024, is that an eligible person claims the allowance not by filing an application, but instead by filing a verified petition. S.L. 2023-120, sec. 1.2, amending G.S. 30-15(b); -17(b).

The verified petition must be filed with the clerk in the county where venue would be proper under G.S. 28A-3-1. Proper venue for the probate of wills and for all proceedings related to the administration of a decedent’s estate in North Carolina is in:

the North Carolina county where the decedent was domiciled at death. G.S. 28A-3-1(1).
any North Carolina county where the decedent left any property or assets or into which any property or assets belonging to the estate may have come, if the decedent had no domicile in North Carolina at the time of death. G.S. 28A-3-1(2).
any county in North Carolina, if the decedent is a nonresident motorist who died in North Carolina. G.S. 28A-3-1(3).

Requirement of Residency to File for An Allowance

The legislation removes the requirement, for decedents dying on or after March 1, 2024, that to claim the allowance the decedent or the surviving spouse must be a resident of North Carolina at the decedent’s death. S.L. 2023-120, sec. 1.5, amending G.S. 30-15.

Delivery of the Verified Petition to the Personal Representative

Another new requirement under Session Law 2023-120 is that for decedents dying on or after March 1, 2024, a copy of the verified petition must be delivered to the PR, if one has been appointed. The amended G.S. 30-15(b) requires the petitioner to personally deliver or send by first-class mail a copy of the verified petition to the PR if one has been appointed in the decedent’s estate. S.L. 2023-120, sec. 1.2, amending 30-15(b). Delivery of the petition is only required to the PR, it does not apply to a collector, an affiant under an affidavit of collection, or other person interested in the estate. The statute does not impose a timeframe on the delivery or mailing of the verified petition to the PR. As a result, it is not clear whether the delivery of the verified petition to the PR must be completed before the clerk may assign the allowance.

Commencement of a Contested Estate Proceeding

Most allowances are assigned by the clerk on an informal, ex parte basis, meaning the matter is not noticed for hearing and no interested persons are given notice of the spouse’s or child’s application. For example, a surviving spouse comes to the clerk’s office after the death of their spouse and completes the form AOC-E-100 , Application And Assignment Year’s Allowance. The clerk then uses the same form to assign the allowance, at or around the same time the allowance is filed. This happens daily in clerks’ offices across the state.

However, in some instances, the allowance is contested. This may include questions such as whether the person seeking the allowance is entitled to an allowance. For example, is the spouse a spouse ? Or, is certain property is eligible to be assigned under the allowance, such as a bank account or a vehicle? Under S.L. 2023-120 there is now a procedure for raising issues related to a year’s allowance. The procedure differs depending on who raises the issue: (i) the clerk or (ii) a person who seeks to challenge the award of the allowance.

Contested Estate Proceeding Directed by the Clerk. A year’s allowance may be initiated by a spouse or eligible child as an uncontested proceeding. However, the clerk may have questions about the petition or determine that there is insufficient evidence in the petition to support the assignment of the allowance. Under a new G.S. 30-20(c), the clerk may, on the clerk’s own motion, determine that a hearing is necessary to determine whether a year’s allowance should be awarded and, if so, what personal property should be awarded. If the clerk makes this determination, the clerk directs the petitioner to commence a contested estate proceeding to determine the year’s allowance. S.L. 2023-120, sec. 1.2, amending G.S 30-20.

After the petitioner commences a contested estate proceeding at the direction of the clerk and a hearing is held, the clerk will then grant or deny the assignment of the allowance. If the clerk assigns the allowance and a person wants to challenge the assignment, the path they follow to challenge the assignment depends on whether they were a party to the contested estate proceeding. If they were a party to the proceeding, they can appeal the order entered by the clerk (the process to appeal is discussed further below).

If they were not a party to the contested estate proceeding, then any person with standing, including the PR of the decedent’s estate, may bring a proceeding to challenge the award of a spousal or a child’s allowance. S.L. 2023-120, sec. 1.2, enacting G.S. 30-23.1(a). The proceeding could be to challenge the validity of an award of a year’s allowance, the amount of a year’s allowance awarded, or the assets awarded as part of a year’s allowance. S.L. 2023-120, sec. 1.2, enacting G.S. 30-23.1(a). The proceeding to challenge the assignment of the year’s allowance by a non-party is conducted as an estate proceeding pursuant to G.S. Chapter 28A, Article 2 and it must be brought within one year of the date of entry the clerk’s order awarding the year’s allowance. S.L. 2023-120, sec. 1.2, enacting G.S. 30-23.1(b). For more on the procedure applicable to estate proceedings, refer to this bulletin written by my former colleague, Ann Anderson.

Contested Estate Proceeding Filed by Person Challenging the Assignment. If the allowance is assigned by the clerk and a contested estate proceeding is not initiated prior to the assignment of the allowance, any person with standing, including the PR, may bring a proceeding to challenge the award of a spousal or a child’s allowance. S.L. 2023-120, sec. 1.2, enacting G.S. 30-23.1(a). The proceeding to challenge the assignment of the year’s allowance is conducted as an estate proceeding pursuant to G.S. Chapter 28A, Article 2 and it must be brought within one year of the date of entry the clerk’s order awarding the year’s allowance. S.L. 2023-120, sec. 1.2, enacting G.S. 30-23.1(b).

Figure 1 . Who may challenge an order awarding a year’s allowance (YEAL).

application and assignment year's allowance

Clerk’s Duty to Deliver Three Reports Replaced with Duty to Deliver to the PR Only

For decedents dying before March 1, 2024, upon assignment of an allowance, the clerk must report the assignment of the allowance. G.S. 30-21. The statute provides that the clerk does this by making and signing “three lists” of the property assigned:

One list must be delivered to the surviving spouse if the assignment is to the surviving spouse. If the assignment is to an eligible child, then the list shall be delivered to (i) the surviving parent with whom the child is living; (ii) to the child’s guardian or next friend if the child is not living with the surviving parent; or (iii) to the child if the child is not living with the surviving parent and has no guardian or next friend.
A second list must be delivered to the PR.
A third list must be returned by the clerk of the county in which administration was granted or the will probated and the clerk must file it.

The “lists” referred to in the statute are incorporated into the form assignment of a year’s allowance, AOC-E-100. The clerk typically satisfies the requirements of G.S. 30-21 by delivering a copy of the AOC-E-100 as indicated above.

The requirements in G.S. 30-21 were repealed by S.L. 2023-120 for the estates of decedents dying on or after March 1, 2024. Instead, a separate provision was added to G.S. 30-20. It streamlines the requirement, deletes the concept of “lists,” and only requires the clerk to provide a copy to the PR of any order awarding an allowance if a PR has been appointed. S.L. 2023-120, sec. 1.2, amending G.S. 30-20. The amended statute does not state how the clerk must provide a copy of the order to the PR.

For decedents dying before March 1, 2024, the PR, the surviving spouse, the child by the child’s guardian or next friend, or any creditor, devisee, or heir of the deceased may appeal the clerk’s order assigning the allowance to the superior court. G.S. 30-23. The person appeals by filing a copy of the assignment and a notice of appeal within 10 days after the assignment. G.S. 30-23. The appeal is subject to G.S. 1-301.2, which governs the appeal of special proceedings, and is for a hearing de novo. G.S. 30-23; 1-301.2(e).

For decedents dying on or after March 1, 2024, G.S. 30-23 is repealed. The revised G.S. Chapter 30, Article 4 does not expressly state what procedure applies to the appeal of an order entered by the clerk in an uncontested year’s allowance proceeding. It appears that the standard set out in G.S. 1-301.3, which governs the appeal of estate matters determined by the clerk, may apply but S.L. 2023-120 does not make that clear.

It is clear that, for decedents dying on or after March 1, 2024, if a contested estate proceeding is initiated to determine the year’s allowance and the clerk enters an order assigning or denying the allowance, the clerk’s order is appealable pursuant to G.S. 1-301.3, which governs the appeal of estate proceedings. G.S. 28A-2-9(c). The appeal is to superior court and the standard of review is the deferential “on the record” standard. G.S. 1-301.3(d).

Reporting the Allowance on the Inventory and Subsequent Accountings

Prior to the enactment of S.L. 2023-120, a frequent question was whether the assets assigned under an allowance must be shown on an inventory or an accounting filed in the estate when the assets never came into the PR’s possession. Practice varied across the state. For the estates of decedents dying on or after March 1, 2024, if the assets under the allowance are distributed to the person entitled to receive them and never come into the PR’s possession, then it is now clear that the assets shall not be reported on the inventory or any accounting. S.L. 2023-120, sec. 1.2, enacting G.S. 30-21.1.

Survival of the Deficiency Judgment

Another open question that is answered by the enactment of S.L. 2023-120 is whether a deficiency judgment entered in favor of a surviving spouse survives the death of the surviving spouse. For the estates of decedents dying on or after March 1, 2024, if the surviving spouse dies after the petition is filed, but before the claim for the allowance is fully satisfied, any deficiency judgment existing at the time of the surviving spouse does not expire. S.L. 2023-120, sec. 1.2, amending G.S. 30-15(c).

For example, Susan and Frank are married. Frank dies and at the time of his death it is thought that Frank has no personal property. Susan files for a year’s allowance and the clerk enters a $60,000 deficiency judgment against the estate and in favor Susan on March 31, 2024. Susan dies on April 15, 2024. It is later discovered that Frank owned a truck worth $50,000. The deficiency judgment entered in Frank’s estate may be used to assign the truck to Susan’s estate. The truck would then become an asset of Susan’s estate.

This is the final installment of my three-part series on the changes to the year’s allowance enacted by Session Law 2023-120. Don’t forget that for at least a period of time, the old and the new law will apply and which law applies depends on the date of the decedent’s death. Make sure to check the date of the decedent’s death to determine whether you are under the old or new framework. Feel free as always to reach out with any questions or feedback. I’m at [email protected] .