Estate Planning in North Carolina
Estate Planning in North Carolina
You can save a lot of money and potential chaos and hard feelings among those closest to you by preplanning how you want your assets managed when you are incapacitated, and how your property will be divided at your death.
Powers of Attorney
In North Carolina, you can sign a durable power of attorney to appoint someone to handle your assets if you become incapacitated. At a minimum, a power of attorney should include the power to:
* Manage and transfer all assets
* Deal with the IRS
* Make gifts on your behalf
* Create and amend any trusts you set up
You don't need to transfer any assets at the time you sign a power of attorney, but it's a good idea to keep the person you've chosen informed about your ongoing financial matters.
You can also appoint a Health Care Power of Attorney to make health care decisions for you when you're unable to do so yourself. This person can provide informed consent for treatment, or even refuse treatment for you.
Dying Without a Will
If you die without a will (known as dying "intestate") in North Carolina, your assets will be divided amongst your immediate family. If you have a spouse but no children, grandchildren or parents, your spouse will receive your entire estate.
If you have a spouse and one child, your spouse will receive one-half of your real property plus the first $30,000 of your personal property and one-half of the remaining personal property in your estate. The remainder will go to your child. If you have a spouse and two or more children, your spouse will receive one-third of your real property plus the first $30,000 of your personal property and one-third of the remaining personal property in your estate. The remainder will go to your children.
If you have a spouse and parents but no children, your spouse will receive one-half of your real property plus the first $50,000 of your personal property and one-half of the remaining personal property in your estate. The remainder will go to your parents.
Alternatives to a Will
Wills eventually become public after your death, with the details of what you owned and how much it was worth available to anyone curious enough to read the court file. As a result, many people look for more private ways to transfer their assets.
In North Carolina, alternatives to making a will include:
* Life insurance policies or trusts
* Gifting cash or other assets before your death
* "Transfer On Death" ("TOD") or "Payable On Death" ("POD") bank accounts
* Holding assets by joint tenancy with right of survivorship ("JTROS"), with the assets transferring automatically to the other joint tenant at the time of death
* Holding assets through a tenancy in common, with each tenant having a divided interest in the property which can be independently sold
* Retirement plans and Individual Retirement Accounts ("IRAs")
* "Revocable living trusts" (sometimes called "grantor trusts"), giving all your assets to a trustee for management before your death
Making a Will
In North Carolina, you can make a valid will if you are at least 18 years old and of sound mind. Your will must be in writing and signed by you or by another individual in your presence and at your direction. Your will must be signed in front of at least two witnesses.
A North Carolina lawyer who does a lot of estate planning can explain the consequences of some of the most basic choices you must make, such as whether property you want to leave to your minor children should be put into a trust at your death. For that reason, it makes sense to consult with a North Carolina estate planning lawyer and have him or her draft your will, so that you don't make costly mistakes or accidentally not accomplish what you intended.
Providing For Young Children
There are many kinds of trusts, but the most common is one you would set up for your minor children or incapacitated adult relatives for their care after you are gone and until they are old enough or well enough to take care of themselves. A parent can name a trustee to be in control of the finances and decide whether to sell or keep property, and manage assets such as real estate. The trustee, usually a family member or trusted friend, can be paid an hourly rate or a set monthly amount for their services out of the trust assets.
You will probably also want to name a guardian for your children, someone who would have physical custody of and take care of your children on a daily basis should you or your spouse be unable to do so.
Probate
"Probate" is the public process of:
* Filing and validating a will in court
* Paying all the debts and taxes of the deceased person
* Dividing up the assets according to the will or North Carolina law
If you have no debts and no "titled property" such as real estate or vehicles to pass along to heirs, there may be no need for probate.
Probate lawyers generally charge by the hour, and they make sure everything gets processed according to the law. In North Carolina, some lawyers are certified by the North Carolina State Bar as "legal specialists" in estate planning and probate law.
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