A lot of people that do not have estate plans in place fail to act because they really don’t know where to begin. With this in mind, we will share some estate planning basics in this post.
Asset Transfers
The first order of business is the facilitation of postmortem asset transfers. A simple will is an option, and you can alternately use some type of trust.
If you pass away without a will or trust, you will die intestate. Under these circumstances, the probate court will supervise the administration of the estate. They will name a personal representative to act as the administrator.
This creates an unnecessarily complicated situation. After final debts are paid, the assets would be distributed using the intestate succession laws of North Carolina. At the end of the day, people that you would have never left out could be disinherited or shortchanged.
Simple Will vs. Revocable Living Trust
Far too many people think that a will is the only logical choice as an asset transfer vehicle unless you’re very wealthy. Another misconception is the idea that you no longer have access to assets that you convey into a trust.
In reality, there is a trust called a revocable living trust that is a very viable alternative to a simple will. With this type of trust, you would be the trustee, so you would have complete control of the assets. As the name indicates, you can revoke the trust if you choose to do so.
There are no risks, and this is one benefit. Secondly, a will is admitted to probate, which is public, time-consuming and costly. The administration of a living trust takes place outside of the probate process, so it is more streamlined.
You can provide limited distributions over an extended period of time if you have a living trust. With a will, the beneficiaries receive lump sums all at once. In addition, assets that are held by the trust would be protected from the beneficiary’s creditors until they are distributed.
Address the Eventualities of Aging
Your estate plan should address eventualities that you may face toward the end of your life. Unfortunately, a significant percentage of the oldest old become unable to handle their own affairs eventually.
If you do not take any action in advance to prepare for this possibility and you become incapacitated, you may lose control. The court can be petitioned to appoint a guardian to act on your behalf, and you would become a ward of the state.
Most people would prefer to choose their own representative, so this is one drawback of a guardianship. Secondly, members of your family may not agree with regard to the optimal course of action. This can cause hard feelings at a very inopportune time.
Incapacity Planning
You can seize control of the matter of incapacity in advance through the execution of the appropriate documents. First, advance directives for healthcare should be included in your broader estate plan. A living will is a directive that is used to assert your life-support utilization preferences.
Situations that are not covered in the living will can arise when you are unable to make your own decisions. To account for this possibility, you should name a decision-maker in a durable power of attorney for healthcare.
With regard to financial matters, if you have a living trust, you can name a disability trustee to assume the role if necessary. To account for property that is not in the trust, your plan can include a durable power of attorney for property.
Schedule a Consultation Today!
If you are ready to engage a Charlotte, North Carolina estate planning lawyer to help you put a plan in place, our doors are open. You can send us a message to request a consultation appointment, we can be reached by phone at (704) 610-4276 (option 2).