Estate Planning
When someone passes away, the property of the deceased must pass to another person. A proper estate plan also involves strategies to minimize potential estate taxes and costs, as well as to coordinate what would happen with your assets in the event of death or disability. Also, a good estate plan should include directions to carry out your wishes regarding health care matters, so that if you ever are unable to give the directions yourself, someone you know and trust would do that for you.
Unfortunately, many families do not do proper estate planning because they do not believe that they have enough assets to need estate planning or believe that their children can just come in and divide their assets by themselves. If you don't make proper legal arrangements for the management of your assets and affairs after your death, North Carolina Intestacy laws will take over upon your death or incapacity. More often than not, this results in the wrong people getting your assets.
If you die intestate (without a Will), the transfer of your assets is accomplished through a proceeding called probate. The probate process generally takes a minimum of six months, and is generally expensive and time-consuming. Even worse, your failure to outline your intentions through proper estate planning can tear apart your family as each person maneuvers to be appointed with the authority to manage your affairs.
A comprehensive estate plan should include the following documents based on in-depth counseling which takes into account your particular family and financial situation:
A Living Trust can be used to hold legal title to and provide a mechanism to manage your property. You (and your spouse) are the Trustee(s) and beneficiaries of your trust during your lifetime. You also designate successor Trustees to carry out your instructions as you have provided in case of death or incapacity. Living Trusts are "revocable" which allows you to make changes and even to terminate them. One of the benefits of a properly funded Living Trust is it will avoid or minimize the expense, delays and publicity associated with probate. A Living Trust also allows for the immediate transfer of assets after death without court interference. If you have a Living Trust-based estate plan, you also need a Pour-Over Will. A Pour-Over Will is used to name a guardian for minor children and protect against intestacy in the event any assets have not been transferred into the trust. Another function is to "pour" any assets left out of the trust into the trust so they are ultimately distributed according to the terms of your Trust.
If you do not have a Living Trust based estate plan, you will need a Last Will and Testament. A Last Will and Testament will transfer your assets according to your wishes. A Will also names someone you select to be your Executor. An Executor is the person you designate to carry out your instructions. If you have minor children, you should also name a Guardian in your Will.
A "Durable Power of Attorney" allows someone you appoint to carry on your financial affairs in the event that you become disabled. Unless you have a properly drafted power of attorney, it may be necessary to apply to a court to have a guardian or conservator appointed to make decisions for you when you are disabled. This process is time-consuming, expensive, emotionally draining and often costs thousands of dollars.
A "Health Care Power of Attorney" allows you to appoint someone you trust to decide about medical treatment options if you lose the ability to decide for yourself. You can allow your health care agent to decide about all health care or only about certain treatments. Your agent can then ensure that health care professionals follow your wishes.
A Living Will informs others of your preferred medical treatment should you become permanently unconscious, terminally ill, or otherwise unable to make or communicate decisions regarding treatment. In conjunction with other estate planning tools, it can bring peace of mind and security while avoiding unnecessary expense and delay in the event of future incapacity.
In addition to the above documents, you should also sign a HIPAA Authorization Form that allows the release of medical information to your Agents, your Successor Trustees, your family and other people whom you designate.
For more information or to schedule a free initial consultation, please contact our experienced attorneys and staff at (910) 772-1678.