It does not matter if you are 25 or 65, estate planning is one of the most important and responsible steps any person can take protect their loved ones in the event of their death. Estate planning includes not only having a Last Will and Testament, but also ensuring that any minor or dependent adult children are protected if you die or are incapacitated. A well-planned estate may be structured to protect your beneficiaries and either expedite probate or avoid probate altogether. In addition, estate planning can help ensure your health care wishes are honored through advance directives. It can be helpful to discuss your specific situation with an estate planning attorney.
Estate planning may involve several different areas, depending on your assets and your stage of life. An often overlooked aspect of estate planning is the comprehensive overview it gives you as to your financial affairs, real and personal property ownership and distribution, and guardianship of minor children. These discussions can be difficult, but planning is necessary and may provide peace of mind. Below are some of the basics—more information is available on each topic by clicking the heading:
Last Will and Testament
Your Last Will and Testament (or “Will”) outlines your wishes regarding disposition of your property and care of your minor children or any dependent adults. If you do not have a Will, the probate court will ultimately be involved in determining how your property will be distributed and who will have responsibility for your children. Your Will should be updated regularly to account for life-stage changes. Wills are specific to the state where you live, so if you do move to or from North Carolina, remember to update your Will.
Trusts are a good option to protect assets for the benefit of an individual or charity. Trusts may also be valuable if you have special needs children or disabled adult children who will need long-term care. A trust for an individual receiving Medicaid, SSI or other public benefits is also advisable to allow them to maintain those benefits. A properly structured trust may also lessen federal and state inheritance or estate taxes (sometimes called death taxes) that might be owed by beneficiaries.
When there is a family member who is incapacitated or incompetent and there has been no durable power of attorney or health care power of attorney executed by that person, it is sometimes necessary to establish a guardianship that authorizes a guardian to make necessary decisions about the disabled individual’s healthcare and finances.
What would happen if you were physically or mentally incapacitated and unable to make healthcare decisions on your own? Having the appropriate advance directive in place allows your decision to be known. Without an advance directive in place, your physician and next-of-kin as defined by state statute will decide on your care. The estate planning attorneys at Brinkley Walser strongly recommend that you also discuss your wishes with your family so there are no surprises.
Power of Attorney
A power of attorney allows an individual to formally declare another person as his or her authorized legal representative for a specific issue (for example, a healthcare power of attorney or a real estate power of attorney) or for all issues (a general durable power of attorney). You may also specify in the power of attorney the exact details of the authorization given.
It is important to choose your representative carefully, as the Power of Attorney gives the individual the legal right to act on your behalf. If you decide at any point that you no longer wish that person to have power of attorney, you should formally revoke the power of attorney.
What is Probate?
When a person dies, his or her estate (assets) will generally go through the probate process. This process involves opening the estate with the court system in the county where the deceased was a resident and accounting for all assets and liabilities owned (or owed) by the deceased person. The process can be confusing and time consuming, and involves some court expenses depending upon the size of the estate, with the final distribution of assets delayed until the process is complete and approved by the probate court (the Clerk of Superior Court in NC). With proper planning, probate may be minimized or avoided altogether.
Estate Planning Guide
Brinkley Walser is pleased to provide this free North Carolina Estate Planning Guide to answer some of the questions you may have:
You can also watch this video with David Inabinett to learn more about the tools you need in your Estate Planning Toolbox:
Brinkley Walser has a great deal of pride in its Elder Law and Estate Planning division with qualified staff and experienced probate attorneys who can assist clients with impact not only to themselves but, at times, to future generations.