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WHAT HAPPENS IF YOU CAN’T FIND THE WILL?

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To probate an estate in North Carolina, the Clerk of Court requires that the original copy of the will be filed. But important documents get lost all of the time. Wills can easily be lost in a move, destroyed in a casualty event (e.g. flood, fire, hurricane), or simply misplaced. So, what happens if your loved one dies, and you can’t find the will?

 

Safe Keeping 

It is first worth mentioning some suggestions to prevent loss or destruction of the original copy of the will. Many individuals like to keep their will in their home along with their other important documents. Sometimes it’s a safe, sometimes it’s a desk drawer, and sometimes it’s a shoebox under the bed. If you’re going to keep it in your home, you should have some safeguards. It should be in a place that is protected from theft, fire, and water damage. Thus, it may be worthwhile to invest in a fireproof safe. If you go the safe route, you should probably share the combination/key or its location to whomever you’ve named executor. I’d imagine it would be rather inconvenient to go all “Ocean’s Eleven” on a safe just to retrieve a will.

By the way, some people want the lawyer who drafted the will to keep the original copy in their office. This is not advisable. Law offices are subject to the same calamities as your own home. They also sometimes move locations and lose things.

Your best bet is probably a safety deposit box. These are kept in an area that is generally protected from all sorts of casualty events. Furthermore, it provides (literally) bank level security, mitigating the threat of theft. Also, you get to walk into the vault, which is pretty cool.

 

Only a Copy

Okay, so your loved one didn’t have the chance to read this article and their will was somehow misplaced, what now? Even though you only have a copy, the will can still be probated. However, it is a much more arduous process. Specifically, you must show the clerk sufficient evidence to demonstrate 4 things.

 

  1. The original will was properly executed.
  2. What the original will said.
  3. That the will in question was never revoked.
  4. That there was a diligent search for the original will—in the places it would most likely be found—and it was not found.

 

A copy of the will is going to help significantly in proving these four elements. Although, the clerk will most likely require witness testimony. Witnesses can be anyone who has knowledge of the contents of the will, either because they read it or it was read to them. Probably the best witnesses, however, are the witnesses that attested to the signing of the will or the attorney who drafted the will. 

 

No Copy, No Nothin’

If you don’t have so much as a copy of the will, or if the clerk refuses to accept the copy you have, there is still hope. The decedent’s estate can still be opened and probated. However, the distribution of assets won’t follow the terms of the will. The assets will pass through intestate succession. Typically, if you are an heir close to the decedent (e.g. wife, child) this method of distribution is not ideal, but it is still beneficial. If you are the only heir, it will be the same as if everything was left to you through the will.

 

What Should You Do?

If you’re having trouble finding the original or a copy of your loved one’s will, you should first look where they keep all of their important documents (read: that old hat box in their closet). Next, you should determine if they own a safety deposit box. If all else fails, seek the assistance of an attorney to determine how to further proceed. 

Regards,

Brenton S. Begley

Elder Law Attorney

McIntyre Elder Law

“We help seniors maintain their lifestyle and preserve their legacies.”

www.mcelderlaw.com

Phone: 704-259-7040

Fax: 866-908-1278

PO Box 165

Shelby, NC 28151-0165

Can you disinherit your spouse?

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Do you have to leave property to your spouse in your will? There are many reasons why you may not want to leave your spouse part of your estate. Maybe your wife is independently wealthy, and you have other plans for your legacy. Maybe your relationship with your husband has deteriorated but you don’t want to go through the difficult and drawn out legal battle of divorce. Whatever the reason may be, you can absolutely cut a spouse out of a will. This will not invalidate the will. However, simply leaving your spouse out of your will does not mean that they are not entitled to a piece of your estate.

North Carolina has enacted legislation to provide options for spouses who may not be receiving their fair share. The rationale behind these laws is that spouses are generally co-dependent. They have co-mingled funds and assets. Thus, when one spouse passes, the other is left in a difficult position because they cannot access the resources they had available when their spouse was alive.

Year’s Allowance

In North Carolina, a surviving spouse is entitled to a “years allowance” which is $60,000 of the estate. The spouse can also receive an additional $5,000 per child if:

  • Children are less than age 22 and full-time students
  • Children are less than age 21 and have been declared mentally incompetent
  • Children are less than 21 and are completely disabled
  • The child is a person person under the age of 18, lived with the decedent, and was under the decedent’s guardianship.

 Obviously, if there is not $60,000 worth of assets in the estate, the spouse will be entitled to whatever amount exists. However, if additional property is found, it will be distributed to the spouse to make up her deficit.

Elective Share

North Carolina also has an elective share statute to protect a surviving spouse. Similar to the years allowance, the elective share allows a spouse to receive a portion of the estate. However, the portion they receive is not a sum certain. Instead they receive a percentage based on the length of the marriage. It breaks down as follows:

  1. Married less than 5 years = 15% of the Total Net Assets.
  2. Married at least five years but less than 10 years, twenty-five percent 25% of the Total Net Assets.
  3. Married for at least 10 years but less than 15 years, 33%of the Total Net Assets.
  4. Married for 15 years or more, 50% of the Total Net Assets.

The “Total Net Assets” include not only property that passes through the will, but all assets of the estate. This includes property of which a beneficiary can be assigned (e.g. life insurance, retirement accounts, bank accounts, etc). Thus, you cannot disinherit a spouse simply by passing property outside the will and avoiding probate. 

Prenuptial and Postnuptial Agreements

So how do you get around these protections? In short, the only way to disinherit your spouse is by mutual agreement. A prenuptial or postnuptial agreement is a contract between the spouses that requires each spouse to agree without duress or coercion. If each spouse is willing to agree, the right of the year’s allowance and elective share can be waived.

Premarital planning is an important part of your estate plan. You should talk to an estate planning attorney to understand your options.

Regards,

Brenton S. Begley

Elder Law Attorney

McIntyre Elder Law

“We help seniors maintain their lifestyle and preserve their legacies.”

www.mcelderlaw.com

Phone: 704-259-7040

Fax: 866-908-1278

PO Box 165

Shelby, NC 28151-0165

What’s Your Interest?

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Let’s say you’ve inherited real property or, maybe, you’re looking to pass along some of your own. Either way, do you know what the nature of the ownership interest is or will be? Many people who inherit property receive the property outright, meaning they’re the sole owner. But there are many ways that property interests can pass and there are many benefits to looking at all the options.

 

Tenants in Common 

If you inherit property along with someone else other than your spouse, you will hold the property as tenants in common (unless the will/trust specifies otherwise). As tenants in common you have an undivided interest in the property. This means that you may own a one-half or one-third interest in the property ,but you still have an equal right to use and occupy the property.

Under this form of ownership, there are some duties owed to the other owners. For example, you cannot lay waste to the property or you could be liable for those damages. Furthermore, if you “oust” one of the other tenants e.g. you affirmatively deny them the ability to use, occupy, or enjoy the land/home, the other tenants may charge you rent based on the fair market value of the property.

When one of the tenants passes, their property interest will pass to their heirs. Their heirs will assume their place as a co-tenant. This method of ownership does not avoid probate and the interest/title in the property must pass through the estate to vest in the heir. 

 

Joint Tenants with Rights of Survivorship (JTROS)

JTROS is very similar to tenants in common. A very important distinction, however, is what happens to the property interest when one of the tenants dies. Let’s say that A and B own a home as JTROS. When A dies, her property interest will immediately go to B. B will be the sole owner of the property immediately upon A’s death.

This method of ownership avoids probate. The interest in the land does not pass through the estate of A because her interest immediately vested in B when A died.

 

Tenancy by the Entirety

This form of ownership is essentially JTROS for married couples and is only available for married couples. In NC, if a married couple purchases property during their marriage, it is, by default, title tenancy by the entirety. If property was purchased prior to the marriage, it will need to be re-titled to make it tenancy by the entirety property.

Similar to JTROS, there are survivorship rights in the property, meaning if one spouse dies, the other immediately owns the whole property. Also, similar to JTROS, this form of ownership allows the owners to avoid probate.

The important function of tenancy by the entirety is its protection against creditors. If a couple owns property as tenants by the entirety, the creditor of oneof the spouses cannot go after the property. Note, if it is a creditor of both of the spouses, the property is fair game.

 

Life Estate 

A life estate is a lifetime interest in property. The interest can be measured by the life of the individual holding the interest of by another person (called: “life estate pur autre vie”). Let’s say A owns a home and she wants B to live in that home but she wants it to pass to her daughter C when B dies and not B’s heirs. A would give B a life estate interest in the home and make C the “remainderman”. This means that the home would be B’s for life, and when B dies, the home will be solely owned by C or C’s heirs.

The holder of the life estate interest (B) can use and occupy the property. However, they are restricted from selling the property, and can be liable for laying waste to the property.

This form of ownership avoids probate because the interest in the property held by C immediately vests in C upon B’s death.

 

Enhanced Life Estate Deed (Lady Bird Deed)

A ladybird deed is very similar to a life estate deed. Its main delineation is how it is treated with respect to Medicaid. Under the Medicaid rules, an applicant can’t have gifted property within the applicable lookback period or they will be subject to the penalty. However, a ladybird deed is an exception to that rule. It allows the owner of the property to essentially place a beneficiary on the property as if it were a life insurance policy or an IRA without it being a gift that triggers the lookback period.

Furthermore, the owner of the home is not restricted from selling or conveying the property, nor will they be liable for laying waste to the property. Also, the property does not pass through probate. The interest in the property immediately vests in the designated “beneficiary” upon the owner’s death. In North Carolina, Medicaid cannot place liens on property that doesn’t pass through the estate i.e. property that goes through probate. Thus, the ladybird deed allows the owner to place a beneficiary on the property, avoid triggering the lookback period, and avoid it being subject to any Medicaid liens.

So, what does this look like? Let’s say A owns a home and some land and wants to apply for Medicaid. She eventually wants B to inherit the home. However, she doesn’t want to trigger the lookback period by gifting the home to B. She also wants to avoid Medicaid from placing any sort of lien on the home. So, A has her lawyer draft a ladybird deed on the home and the surrounding property. Eventually, A passes away and the home goes to B immediately upon the death of A. B is the sole owner of the home and hold the property free of any lien. Note, a ladybird deed can be place on a home with more than one owner and more than on “beneficiary” can be designated.

 

Conclusion

It is important to understand the nature of your ownership interest in your property or the property you inherit. Before you make your estate plan, you should sit down with an attorney to review the best options that fit your desires, your finances, and your family.

Regards,

Greg McIntyre

Elder Law Attorney

McIntyre Elder Law

“We help seniors maintain their lifestyle and preserve their legacies.”

www.mcelderlaw.com

Phone: 704-259-7040

Fax: 866-908-1278

PO Box 165

Shelby, NC 28151-0165

The 3 commonly held beliefs about Money, Aging and Estate Planning

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This is about the 3 most commonly held beliefs about Money, Aging and Estate Planning.

I see people all the time with these beliefs. They’re in bad situations with money, estate planning and long-term care.

So, what are the beliefs and realities?

The first commonly held belief is:

Medicare pays for Long-term care.

Long-term care is In-home, assisted living and nursing home care.

Answer: Medicare will NOT pay for your long-term care.

If you need to go to an assisted living or nursing home facility, Medicare will Not pay for that.

So, what does Medicare pay for?

If I had to go to hospital for a stay, (usually not a long stay), the hospital would stabilize me and move me to a rehabilitation facility where I’d work on getting better with the help of a physical therapist.

You will hear there are one-hundred days coverage. The first twenty, and the next eighty.

For the first twenty (20) days of that care, Medicare will pay. After that, as long as I’m continually improving, Medicare will pay a partial payment on the next eighty (80) days.

If within that one-hundred days, the doctor decides to send the patient home or to a long-term care facility, then Medicare stops paying. You can file an appeal on that, but those are the rules.

After the one-hundred days or within that time, if Medicare stops paying and you have to go to a long-term care facility, who then pays? You pay out of your pocket.

The sad reality is it’s expensive. Many people cannot afford it. They lose everything they’ve worked for their entire lives to pay for their last few years.

So, who can pay if Medicare has stopped paying?

If you have long-term care insurance, which I highly recommend, then the insurance will come in and pay at that point. Having long-term care insurance can also give you time to work on an estate plan.

If you do not have an estate plan, how can you avoid losing all your money and property to long-term care payments or Medicaid liens?

If you are a veteran, veteran’s benefits can help pay for long-term care.

Planning ahead costs you less. Planning ahead gives you, your spouse and your family peace of mind.

For better peace of mind, estate planning can help because you no longer worry about everything you’ve worked for your entire life. You know you will be taken care of, you have set up the foundational documents to protect your money and property for your future and the future of your children and grandchildren. In your retirement years you don’t want to be stressing over losing it all because of a long-term care situation.

The second commonly held misconception is:

I don’t need a Will, or an estate plan because I’m married, and my spouse will receive everything anyway.

Under the rules of intestate succession which means dying without a Will, which I like to call, The States Will, if you die without a Will, (depending on your state laws, and how long you have been married), your spouse is only going to receive a portion of what you have. It could be fifty percent (50%), or one-third, depending on how many children you have.

To ensure your spouse gets everything, you must have an estate plan.

The third commonly held misconception is:

I have plenty of money. I can pay for long-term care.

If you needed care and wanted to pay for in-home care, there are ways to do that.

1-    Long term care insurance.

2-    Trust planning can put assets aside to help pay.

Many times, nursing home care can easily cost anywhere between $60,000 to $100,000 or more per year. This will quickly spend down even a large estate.

If you want to prevent that, you must plan ahead.

I have sat down with a spouse who believed she and her husband had enough money, but her husband had been in a nursing home for two years and she was scared she’d lose everything, including her home. They didn’t plan ahead.

My grandfather, Worth McIntyre, worked his entire life to get a small farm house in Lattimore, NC. He was in an assisted living facility for the last fourteen years of his life. It was a great facility, and he enjoyed it, but he lost everything. He did not have an estate plan.

My grandmother on the other side of my family had an estate plan. She was able to protect and keep everything. She left her home and assets to her children.

I hate to see people lose their home and assets because they didn’t plan ahead. I hate that because I know I could have helped.

If you are interested in protecting your home and assets and still be in control of your assets, and leave open long-term care options, call out office, we will be glad to discuss options and help you. Call 704-259-7040 or go to our website mcelderlaw.com and sign up for our free e-newsletter.

Greg McIntyre, JD, MBA

Elder Law Attorney

704-259-7040

greg@mcelderlaw.com

The Simultaneous Death Act

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We attempt to provide for every contingency in a will. When we plan for the future, we contemplate our own death as well of the death of our spouse. We then try and provide for some alternatives depending on who should pass first. But what happens if both spouses pass at the same time?

Many states, including North Carolina, have adopted the Uniform Simultaneous Death Act. The Act provides that if spouses die within 120 hours of one another, each spouse will be treated as if he or she were the survivor. This means that nothing is passed between the spouses’ estates. In other words, neither of the spouses inherit anything from the other. Their property would then pass to the beneficiaries, other than their spouse, as set forth in their will. If alternative heirs are not contemplated by the will, the property passes by intestate succession.

This also applies to survivorship property and life insurance policies. If the beneficiary dies within 120 hours of the principal’s death, the property/life insurance proceeds do not pass to the beneficiary’s estate. Survivorship property includes real property, trusts, payable on death accounts, and really anything to which you can assign a beneficiary.

The benefit of planning ahead is that you can provide for these contingencies in your will or governing instrument. Your will can dictate how your property will pass if your spouse’s death occurs simultaneously with your own, you can have your deed determine who will get your real property of the holder of the survivorship interest passes along with you, and you can designate alternative beneficiaries on your life insurance policy.

The thing about planning for the future is that it must be practical. Car wrecks, tornadoes, and communicable illnesses are all examples of common disasters that could result in the simultaneous death of two spouses. Unfortunately, disasters causing simultaneous death are not uncommon. And if your will or governing instrument does not provide otherwise, the manner in which your property will pass will be dictated by the state.

You should make sure that your will or governing instruments continue to be in line with your estate plan in the event of a simultaneous death.

Regards,

Brenton Begley

Elder Law Attorney

McIntyre Elder Law

“We help seniors maintain their lifestyle and preserve their legacies.”

www.mcelderlaw.com

Phone: 704-998-5800

Fax: 866-908-1278

112 S. Tryon St.

Suite 760

Charlotte, NC 28202

Out of State Wills

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I am frequently asked the following question: “I have a will that was drafted for me out of state. Is it valid in North Carolina?” The answer? It depends.

   If the will was drafted by an attorney in another state, then it will likely be valid and probated-able in NC. If it was a fillable form or something you got off a website, then you’re rolling the dice as to whether it’s valid in ANY state.

   Even if you had your will drafted by an attorney, different states have different laws. While the requirements for a valid will are pretty consistent among the states, there are some differences of which to be wary.

   The general requirements for wills are as follows. Wills must be signed, witnessed, and attested. The testator (creator of the will) must be of legal age, have intent to create the will, and be of sound mind. Most states have similar definitions of these requirements, but they can differ. For example, legal age for most states is 18. However, in Louisiana, a person as young as 14 can create a will. Another example is the witness requirements. Most states require a minimum of 2 witnesses be present and observe the testator signing the will. However, good ol’ Vermont requires a minimum of three witnesses (which is surprising for a state with such a small population).

   There is also the fact that the will itself might be valid but certain provisions in the will may not be. This is especially true if you are moving from a community property state to a state that does not have community property laws. Furthermore, in some states you can disinherit your spouse. In NC, for example, there are laws that protect surviving spouses.

   Beyond validity, the will might need to be updated for practical purposes. Let’s say you moved from New York to North Carolina. You had a will drafted in NY and you named your sister who also lives in NY as your executor. Now that you have moved to NC, your will may still be valid, but your executor now lives more than twelve hours away from you.

           Moreover, when you move, you make changes. Typically, you buy or sell real or personal property, you make new relationships, you become a part of new groups, etc. Your will should be able to account for these changes. If it does not, then it should be updated to fit your new life.

           The best thing to do, if you are moving to a different state, is to have an attorney evaluate your estate plan and make sure it works for you.

Regards,

Brenton S. Begley, JD, LLM Taxation

Elder Law Attorney

McIntyre Elder Law

“We help seniors maintain their lifestyle and preserve their legacies.”

www.mcelderlaw.com

Phone: 704-998-5800

Fax: 866-908-1278

401 N. Tryon St. , 10th Floor

Charlotte, NC 28202

Guardianships

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We’re talking about Guardianships in this elder law report, because much of this week I’ve been involved in Guardianship hearings. Guardianships can be very contentious. The situations that surround Guardianships can tear families apart.

The hearings I was involved in this week were almost cathartic. Getting some of the bad blood out during the hearing, allowed for some healing to take place, but the hearings were still stressful. They’re not just stressful for me, they’re stressful for the family involved. It’s best that you avoid Guardianships, but this is about clarifying the Guardianship process for you.

There are three types of Guardianship.

  • Guardian of the Estate. This is Guardianship over money and legal matters.
  • Guardian of the Person. This is Guardianship over healthcare decisions.
  • General Guardianship. This is for both legal, financial and personal decisions such as healthcare.

 

In a Guardianship hearing, with someone in the family who is incompetent or incapacitated, the money is frozen and healthcare decisions cannot be made until someone is appointed to oversee those matters.

You can avoid Guardianships by appointing a trusted family member or someone else you trust to be your Attorney-In-Fact, an Agent of you, through a document called a General Durable Power of Attorney. This document is general because it covers everything from real estate to bank accounts, and any legal or financial matters where someone else takes care of that for you.

With personal healthcare matters, you are appointing a healthcare agent through a document called a Healthcare Power of Attorney.

You want to be prepared

Having someone on the bench ready to take over if you become incompetent or incapacitated is essential for peace of mind. You can appoint a primary and a secondary in case the primary becomes unable to act on your behalf.

Powers of Attorney can also be set up so that two or more people can:

  • Act together
  • Separately, or
  • You can make them act together so they both know what each other is doing, for example, with mom and dad’s money.

 

Powers of Attorney are powerful if you want to avoid those contentious, gut-wrenching, family destroying situations surrounding Guardianships and Guardianship hearings.

Now, I don’t want to diminish the importance of Guardianships. They are very important. There are situations where a Guardian needs to be appointed, even a public Guardian. They will come in and take control of assets and healthcare decisions because a family member (or someone else) is taking advantage of an incompetent or incapacitated family member. The court system is there to provide an avenue where a Guardian can be appointed and clamp down and stop that.

A clerk or a judge can put a stop to that by appointing a Guardian and enforce penalties to put a stop to any form of abuse, such as elder abuse or financial abuse.

These are very important and it’s something we deal with at Guardianship hearings. However, in most cases, you can prevent those from occurring by simply having your foundational documents (General Durable Power of Attorney and Healthcare Power of Attorney) in place ahead of time.

I often see people come to my office in dire straits. They’re willing to do some planning to activate a healthcare benefit, they may need to activate a Medicaid benefit to pay for nursing home care, or a veteran’s benefit, such as Aid and Attendance Pension benefit to pay for assisted living care. But if you don’t have these Powers of Attorney in place, it can be near impossible, or very difficult to get those benefits to pay for long-term care.

It is so simple and important to have these documents in place.

With Guardianships, sometimes those options can still be explored, but to do that, you must make a petition to the courts. This is usually done through an attorney, but you must do that every time you need something. You must explain and sell to the court that it’s a good idea to use this benefit or change the assets. The courts are reluctant to use those assets when someone needs them for their care.

Guardianship can be avoided.

If you want to avoid Guardianships, protect your assets and plan ahead, contact me, Greg McIntyre at 704-259-7040 and set up a General Durable Power of Attorney and Healthcare Power of Attorney.

The elder law report can be seen every week on Friday at 10am. Next week we will be talking about Deed Planning, so tune in.

If you have questions about Guardianships, call me, Greg McIntyre and schedule a consult at 704-998-5800 for Charlotte, or 704-259-7040 for Shelby, or visit our website mcelderlaw.com and we will do what we can to help you.

 

Greg Mcintyre

Elder Law Attorney

704-259-7040

The Untold Benefits of Estate Planning REAL TALK WARNING!

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Most of the benefits of estate planning are pretty obvious. People go to an estate planning attorney because they want to determine how their property will pass after their death. What is not obvious, however, is the residual benefits of the estate planning process. Namely, the reflection on one’s life, the consideration of one’s death, and the contemplation of the future.

 

Someone once told me a story about their estate planning process that resonated with me. She and her husband worked hard, earned a decent living, and achieved a ripe age. Up to that point, they had never put anything into place, no powers of attorney, no living will, not even a will. They finally decided to have an attorney help them with their plan and they got all the necessary documents in place. Sadly, not long after, the husband suddenly passed away. The unexpected illness and abrupt death of her husband was, no doubt, very difficult for the wife as she made decisions for her husband. However, she was able to make these decisions with peace of mind because they had sat down and made their plan beforehand.

 

The main thing I took from this story was the fact that the planning process arms you with an important tool, knowledge. The thing about estate planning is that it forces you to confront your own mortality. It makes you consider what you value, who you value, and how you want to be remembered. In turn, your loved ones will have the necessary knowledge to make the appropriate decisions without struggling with ambivalence while mourning your death.

 

For example, the woman above was presented with the difficult choice of determining whether to take her husband off of life support. This is the sort of choice that is not ever easy to make no matter how much you plan ahead. Nonetheless, she made her choice and her mind is at peace because they had the opportunity to have the difficult conversation and convey their wishes to each other anything happened.

 

The lesson I have learned from her story and stories like hers is that planning is important and there is no time like the present. Death is inevitable but seldom predictable. You can be healthy one day and struggling for life the next. The only guarantee is that one day you will meet your end, you just don’t get to know when that will be. So, have the difficult conversation, face the void –if only for a bit—and make a plan so that your loved ones don’t have to bear the burden themselves.

 

Brenton S. Begley, JD, LLM Taxation
Attorney with McIntyre Elder Law

Who Do You Trust?

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Who Do You Trust?

A common theme that permeates estate planning is the need to have a clear idea of who you unconditionally trust. When you create a will, you must appoint an executor; when you create a trust, you must appoint a trustee; and when you create a power of attorney, you must appoint an attorney in fact. It is important to give thought to whom you think can ethically carry out their fiduciary duty in the manner that closely mirrors your wishes.

The Who

Trust is only one of the considerations that must be weighed in choosing a fiduciary. Another important consideration is capability, namely whether the person appointed has the skills to effectively carryout their responsibilities. This is especially poignant if you have a complex estate plan, a large estate, a large amount of debt, or a large number of heirs.

Many of us would automatically defer to appointing our spouses. This is a reasonable approach, considering they have intimate knowledge of your wishes, and have likely intertwined their estate plan with yours. But you must consider that many of the fiduciary duties that spring from an estate plan arise from the death of the planner. Thus, the process of acting as a fiduciary can be made extremely difficult for those who were close to the decedent.

That is not to say that you should avoid appointing a spouse or loved one. Many times, they can more than adequately fulfill the role. You simply must consider the gravity of what you are asking these individuals to do. Before appointing a fiduciary, you should speak with your loved ones to determine whether they are up for the task.

The What

            What are these fiduciary powers that you are granting? How do they affect your estate plan?

  • Executor: this individual carries out or executes the wishes set forth in your will. This process starts by filing the will at the courthouse, which begins the probate process. They will then pay off debts of the estate, distribute property of the estate, and provide an inventory and accounting of the estate.
  • Trustee: trusts can have many different functions; however, the role of the trustee remains essentially the same. It is the person who is trusted to manage the assets in the trust, to make decisions in the best interest of the trust, and to ensure that the directions set forth in the trust instrument are carried out.
  • Attorney-in-fact: this could either be your fiduciary for financial and legal purposes or for medical purposes. This individual will act as youand carry out your wishes when you are unable or incapable of doing so on your own accord.

 

These individuals could all be the same or separate people. However you chose, the appointed fiduciaries play a critical role in ensuring that your wishes come to fruition.

The How

Not only should you consider who you will appoint as your fiduciary, you need to consider how. Specifically, you should consider who will be the primary and who will be the backup.

There are many reasons why you should consider appointing a backup or secondary. It may be that the primary is unable to carry out their duties because of death, incompetency, or physical inability. It also may be that the primary is in a compromising emotional state resulting from the death of a loved one. Either way, it is important to have someone that can step into their shoes and fulfill the role.

The Conclusion        

You should take some time to consider who you want to be your fiduciary. They should be trusted and capable individuals who are up for the task. You should also consider who you would like to appoint as an alternate, they should know that there is a significant likelihood that they may be called upon to fulfill the role as fiduciary, for whatever reason.

If you would like to appoint a primary or secondary fiduciary, you should contact a qualified Estate Planning Attorney to assist you in drafting or updating your estate plan

Brenton S. Begley, JD, LLM Taxation

                                                                    Attorney with McIntyre Elder Law

What Happens if You Die Without a Will?

in Articles by Greg McIntyre Comments are off

 

What Happens if You Die Without a Will?

 “The responsible thing to do is to make sure you have a will in place before you pass.” I am sure just about every adult in the US has been told that statement. But why is it important to have a will? What happens if you do not have a will executed before your death?

Testate vs Intestate

If you have spent enough time around attorneys, you have probably heard these terms before. But these terms are not frequently thrown around in common parlance and can be confusing those without the letters “JD” by their name. If a person dies testate, it simply means that a valid will has been executed. Of course, dying intestate—as the prefix would suggest—is the inverse, meaning that the person has died without executing a valid will. Either way, when a person passes the assets and belongings left behind becomes their “estate”.

Testacy

An individual who executes a will is called a “testator”. If an individual or testator dies testate, their property will pass according to the provisions set forth in their will. This will allow individuals to preplan and make general and specific devises of their assets to their heirs upon their death. The will, if validly executed, will be recognized by the jurisdiction in which the testator resided before their passing.

After the testator has passed away, the executor of the estate—which the testator named in the will—will file the will with the clerk of court. This will begin the legal process of fulfilling the testator’s wishes as set forth in his or her will, called “probate”.

During the probate process, the executor will distribute the assets of the estate to the beneficiaries named in the will. They also have fiduciary duties to pay debts of the estate and to provide an accounting of the expenses, income, distribution, and payments of the estate.

The defining characteristic of dying testate is having a say in where your property goes, having a trusted individual execute your wishes, and having the ability to protect your heirs.

Intestacy

The estate of a decedent who passes away without a will passes through “intestate succession”. Intestate succession is determined by the intestacy statutes of the applicable jurisdiction. The statutes will pass a percentage of the estate to lineal descendants based on their position in the family tree.

In North Carolina, property that passes through intestate succession goes “per capita at each generation”. This means that the property goes in equal shares to each surviving descendant in the nearest degree of kinship. Depending on the structure of the family tree, the estate can pass to one or two descendants or splinter into many fractional shares. If there are no takers of the decedent’s assets, the property will “escheat” or pass to the state.

Upon the passing of the decedent an estate administrator will be named. Just about anyone can apply to be the estate administrator. The administrator will act in a fiduciary capacity and will distribute the property in the estate based on the intestacy statutes.

The defining characteristic of intestate succession is that the decedent has no say in who will carry out his or her wishes, has no say in where his or her property goes after their death, and has no ability to insulate their heirs from the possible legal downsides of inheritance.

What does this mean for you?

The biggest factor for individuals determining whether to execute a will is whether they want to dictate how their property will pass after they are gone. If you have any desire to have a say in who gets your property after your death, then you should consider creating a will.

It is also important to review your will if you have one to make sure it is valid and covers all the property you own. In North Carolina, if you have property that is not covered by your will it will pass through the intestate succession statutes. A common mistake among individuals is thinking that a fillable will, that they print from the internet, will be a sufficient means of passing their property and protecting their heirs. There are legal requirements that are necessary to executing a will and there is no guarantee that a pre-filled form will satisfy those requirements.

Lastly, it is important to have a detailed and comprehensive will with provisions that anticipate future events. Here at McIntyre Elder Law, we do our best to put safeguards in place to protect whomever may be taking under the will. That’s why all of our wills include protections for heirs who qualify for means tested benefits from the government. We want to make sure that those heirs can receive their inheritance without it disqualifying them from their benefits.

In Conclusion

A will is important because it gives you control over your assets and property and allows you to adequately plan for the future of your loved ones. Not only does it give you the opportunity to plan ahead, it also relieves your loved ones of most of the stress and frustration of settling your affairs after your passing.

If you are thinking about creating or modifying a will, find a qualified Estate Planning or Elder Law attorney to assist you.

 

Brenton S. Begley, JD, LLM Taxation

Attorney with McIntyre Elder Law

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