At McAdoo Law Group, we believe informed clients make the best decisions about their estate plans. That's why we want to break down complex terms and clarify confusing principles so that you make the right choices for your estate, too. Contact our office either online or at (888) 235-5550 for a consultation to get specific legal advice for your estate plan. In the meantime, here are responses to some of the most frequently asked questions we get when new clients come to our office in North Carolina.
What is estate planning?
Estate planning is a process allowing you to arrange how you want your assets to be managed and distributed upon your death. Sometimes, if you have limited assets, limited beneficiaries, and limited instructions on how to distribute your assets to the beneficiaries, planning is pretty straightforward. On the other hand, the more assets, the more beneficiaries, and the more instructions may require an estate plan that is more complex and varied.
Generally, there are two components of estate planning with one involving the legal aspects of it and the other involving the non-legal aspects of the plan. Your estate planning attorney can help with both. Legally speaking, your lawyer will review your personal and financial situation and create documents that address the latter. Non-legally speaking, your lawyer will develop an investment strategy for retirement purposes.
What goes into an estate plan in North Carolina?
An estate plan will include the documents that accommodate your specific needs. It may involve some or all of the following:
- Last will and testament
- Living trust
- Irrevocable trusts (e.g., life insurance trusts, gift trusts, special needs trust, charitable trust)
- Asset protection from divorce, creditors, others
- Health care directives, including medical powers of attorney, living wills, health care proxy, do not resuscitate (DNR) or do not intubate (DNI) orders
- Succession plan for business
- Charitable planning
What is probate?
Probate is the legal process of transferring the property from a deceased person's estate to their heirs or beneficiaries. It is overseen by the local probate court.
What happens if I die without a will in North Carolina?
Dying without a will means you die intestate. Your assets and belongings will get passed to your heirs according to your state's intestacy laws.
What happens to my will if I move to a new state?
In rare cases, the differences in state laws could make it invalid. More commonly, if you moved to a state that views marital property differently from your former state of residence, the change in laws could result in complications. It is wise to revisit your will with an attorney in your new state after moving.
Do I need a lawyer to write my will?
While you do not need a lawyer to write a will, doing so is a considerable risk. A last will and testament that was not written by a lawyer or that was created using an online form are more likely to be challenged, deemed invalid, or leave significant assets unaccounted for, which can create confusion and unforeseen outcomes.
Can you write a will if you have Alzheimer's or dementia?
People need to have testamentary capacity to make a valid will. This often requires an understanding of the property being devised in the will, who is going to receive it, and the purpose and function of a will. People with Alzheimer's or dementia may struggle with testamentary capacity. The best way to make sure they have a will in place is to hire a lawyer to help.
Do I need a Will if I have no children?
If you die without a will, your estate will pass to others through your state's intestacy laws. If you have no children, then property will be disbursed to family members. If there are no heirs according to your state's intestacy laws, then the state may acquire the property. So, even if you do not have children, you still need a will if you do not want the state to make decisions for you about who gets what from your estate.
Keep in mind you do not have to create a will to benefit only family. A will allows you to pass your estate in a way that will serve what matters most to you: this could be preserving the financial wellbeing of your partner, parents, or siblings, but also setting money aside for the care of a pet, or assisting a charitable organization aligned with your values.
Does my will automatically change if I divorce?
No. It is crucial to update your will after getting a divorce so that your most recent wishes are reflected in it.
Does my will automatically change if I have a child?
It depends on the language in the will. If your will specifies an action that will happen to unnamed offspring (for example: “All of my property equally to my children”), the interpretation would be different than if you made a specific bequest to a named child or children. You should always revisit your will after having a child.
What is the difference between a will and a living will?
A will – also called a last will and testament – comes into effect when its creator dies and directs the executor on how to transfer the property in the estate. A living will, on the other hand, comes into effect when its creator is alive but incapacitated – it tells others what the creator's preferences and medical decisions are regarding their healthcare.
What is a trust?
A trust is a pool of assets that is set aside to be managed by a trustee, for the benefit of someone else, called the beneficiary.
What is the purpose of a trust in North Carolina?
A trust sets aside some assets for a trustee to manage for the sake of a beneficiary. The assets set aside in the trust do not go through probate, simplifying and expediting its transfer out of the estate. The trustee must follow the instructions set out by the trust.
Can I have both a will and a trust in North Carolina?
Yes. Many trusts are testamentary trusts, and are created in the decedent's will. Lots of other trusts are made during the person's life to set aside some assets outside of their will.
Are trusts only for rich people in North Carolina with lots of assets?
No, trusts can be created by anyone who wants to set aside money for someone but who does not want to give them the money in a lump sum. They are especially common when the beneficiary is underage or is unable to manage their own affairs.
What happens to jointly owned property when one spouse dies?
When spouses jointly own property and then one spouse passes away, the property is automatically passed to the surviving spouse. An example would be the marital home owned by both spouses.
What is a guardian?
A guardian is a person who is responsible for someone else's well-being. People often appoint a guardian for their underage children in their will or for their adult children with special needs. These legal guardians can make legal decisions on behalf of their charges, much like a parent.
How can I designate a guardian for my children?
Naming a legal guardian for your underage children is a common provision in a will. You also have the ability to appoint a conservator for adult children who may be unable to make certain decisions.
If you do not appoint a legal guardian via a will, the court will appoint one upon your death. For this reason, it is important even if it seems like commonsense to make sure you designate a guardian in your will.
How can we make sure our special needs child is cared for after we die?
A common way to ensure a special needs child continues to receive the care they need is to appoint a guardian for them and to create a trust fund in their name. Special needs child trusts are specific for this purpose.
How can I make sure my pet is cared for after I die?
A common way to care for pets after their owner passes away is to state in the will who is to care for the animal and then create a testamentary trust for the benefit of the pet.
How much will an Estate Planning attorney in North Carolina cost?
The costs for an estate planning attorney depends on multiple factors. First, what all do you want in your estate plan? How much in the way of assets fo you have? The more complicated your estate plan, the more costs you will expend. Second, how does the attorney charge? Is it by flat fee, which is most common among estate planning attorneys, or by hourly rate? In the former, less services may be included in the fixed rate, but in the latter, hours can add up quickly. You want to be sure exactly what you are getting (and not) for the price you are paying. You may pay a couple hundred dollars, or you could pay a couple thousand dollars.
When do I need a power of attorney in North Carolina?
A power of attorney is essential for people who are unable to make important medical or financial decisions on their own behalf, usually because they are incapacitated or suffering from a medical condition. There are five types of powers of attorney, each with their own purpose:
- Durable power of attorney
- Medical power of attorney
- General power of attorney
- Limited (special) power of attorney
- Springing power of attorney
Contact an Estate Planning Lawyer in North Carolina Today
At McAdoo Law Group, we know you have lots of questions about estate planning. Our estate planning lawyer in North Carolina is here to answer your specific questions. Contact us either by using our online form or calling us directly at (888) 235-5550 to schedule a consultation.