Trying to plan your North Carolina estate? Get the answers you need to protect your family.

Jackie Bedard has compiled a list of the most frequently asked questions in response those who need help protecting their families with North Carolina estate plans.
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  • How Do I Stop Mom or Dad From Writing Checks or Making Poor Financial Decisions?

    Hope for CaregiversA frequent question at our office, particularly when a parent has dementia or Alzheimer’s, is along the lines of: I have power of attorney for my mother, but she keeps writing checks and making poor financial decisions when I’m not around. What do I do?

    While Durable Powers of Attorney are an important part of a well-rounded estate planning, they do have one major shortcoming: A Durable Power of Attorney appoints an Agent to act on behalf of the Principal (e.g., mom or dad), but it does NOT stop the Principal from still conducting business on his or her own.

    Set Up a Trust

    If the Durable Power of Attorney authorizes you to do so, you may consider establishing a trust on your parents behalf and nominate yourself as trustee. As power of attorney you would transfer your parent’s assets into the trust and then manage the trust as trustee. Only a trustee can conduct business on behalf of a trust, therefore, your parent would not be able to write checks or conduct financial transactions for any assets that are in the trust.

    We strongly recommend that you consult with an attorney regarding this option and whether you’re legally authorized to establish a trust on your parent’s behalf.

    Adult Guardianship

    The next step may be to consider an adult guardianship proceeding. A guardianship proceeding will include an incompetency hearing. If the court finds your parent to be incompetent, the clerk of court will issue an order of such finding and will appoint a guardian to manage your parent’s affairs. You can then give copies of the court order to all banks and financial institutions where your parent holds accounts to notify the bank or financial institution that your parent has been declared incompetent by the court and no longer has legal authority to conduct transactions on his or her own behalf.

    Are You Caring for an Aging Parent or Family Member?

    As a caregiver, you know better than anyone that good help and clear guidance is hard to find.

    You may be struggling to find and pay for long-term care services, hitting roadblocks and waitlists in trying to get your loved one placed in an appropriate facility, or constantly fighting with doctors, hospitals (or even other family members) because you don’t have the necessary legal or financial authority to oversee your loved one’s affairs and/or care.

    Solid legal and financial planning is your answer and can help you put an end to all of the confusion and overwhelm that you currently face.

    Our free Caregiver’s Guide is here to help. Request your copy here or call us at 919-443-3035 to discuss how we can help.

     

  • When Does a Health Care Power of Attorney Take Effect? What Are My Responsibilites?

    A Health Care Power of Attorney does not take effect until the patient's attending physician determines that the patient is no longer able to make informed health care decisions and is no longer able to clearly communicate his or her wishes to health care providers. At that time, the physician will call upon the Health Care Agent nominated in the patient's Health Care Power of Attorney to make medical and health care decisions on the patient's behalf.

    Your Role and Responsibilities as Health Care Agent

    If you are called upon to serve as Health Care Agent, you will be responsible for all decisions relating to my health care, long-term care, end-of-life care, and general well-being.

    Co-Agents

    In some instances, a Health Care Power of Attorney may nominate multiple individuals to serve jointly as co-Health Care Agents. If you are serving with a Co-Agent, then the Health Care Power of Attorney should provide specific guidance regarding how to proceed in the event that you and the other Co-Agent(s) disagree on a matter.

    Authority

    The full scope of your authority is set forth within the Health Care Power of Attorney document, but in general, authority includes:

    • Receiving medical information that I would have a right to receive;
    • Conferring with my physicians and all other health care providers;
    • Reviewing my medical charts;
    • Asking questions and receiving explanations from my health care providers;
    • Discussing treatment options with my physicians and other health care providers;
    • Consenting to medical treatments, tests, diagnostics, or similar;
    • Refusing medical treatments, including expressing my wishes regarding end-of-life care and life-sustaining treatments; and
    • Requesting consultations and second opinions.

    In some instances, you may need to consult with the patient's financial decision maker (Agent under the patient's Durable Power of Attorney and/or Trustee of my Living Trust) regarding financial feasibility of health care, long-term care, or end-of-life care.

    Responsibilities 

    By serving as Health Care Agent, you have accepted a fiduciary duty to act in accordance with the patient's wishes and best interests to the best of your ability. At times, you may need to communicate and coordinate with the patient's Agent under a Durable Power of Attorney or if the patient has a Trust, the patient's Trustee.  To reduce the risk of likelihood of family discord with family members that may not agree with your decisions you should:

    • Carefully read the Health Care Power of Attorney and all supporting guidance that the patient has provided;
    • When making decisions on the patient's behalf, regularly review the patient's Health Care Power of Attorney and all supporting guidance provided;
    • Consult with the patient's attorney as needed to understand your role and seek advice regarding carrying out the patient's wishes;
    • Keep a notebook or record of all decisions made on the patient's behalf regarding the patient's health care and living arrangements;
    • Keep copies of all medical reports or similar documents;
    • Write down the names of all persons consulted with in making a decision such as health care providers, attorney, or similar.

    Potential Questions for Health Care Providers

    Every health care scenario is different. The following list is by no means exhaustive, but hopefully, it provides you with a helpful starting point:

    • How will this care option help the patient improve or feel better?
    • What do you define as a successful outcome for this care option? What is the likely success rate?
    • Can this care option be done on a trial basis and then be re-evaluated? If so, what is the appropriate amount of time for the trial? If the trial does not appear to be successful, are you willing to stop the care at that time?
    • What will this care option mean for the patient's quality of life?
    • If I were to die, how might this affect the patient's death? (e.g., would it potentially require hospitalization instead of home care?)
    • What are the potential side effects of this care option?
    • What care option do you recommend and why?

    Get Started on Your Planning & Peace of Mind

    We can guide you through the steps of creating a comprehensive health care plan and make the process as easy as possible for you and your family. A great place to start if you're looking to learn more is to attend one of our free public seminars or request our report, Estate Planning Pitfalls: The Twelve Most Common Threats To Your Estate & Your Family’s Future. If you'd like to discuss other ways to get started, call us at 919-586-8222 or complete our online contact form.

     

  • What Is a DNR? What is a MOST?

    Do Not Resuscitate (DNR) Order

    A Do Not Resuscitate (DNR) Order allows a patient  (or their Health Care Agent on their behalf) to refuse cardiopulmonary resuscitation (CPR) attempts if the patient stops breathing or the patient’s heart stops. A DNR must be obtained from a physician and is written on a special form. It is important to understand that a DNR only applies to the decision to withhold CPR and does not apply to other life-sustaining treatments. In North Carolina, this form is color-coded (large red text on bright yellow-orange paper) and should be shared with all of the patient’s health care providers and posted prominently in the patient’s place of residence, such as on the refrigerator, for Emergency Medical Services (EMS). In the absence of a DNR signed by a physician, if EMS is called, they will be legally obligated to perform CPR if the patient has stopped breathing or if the patient's heart has stopped.

    Medical Order for Scope of Treatment (MOST)

    A Medical Order for Scope of Treatment (MOST) allows a patient (or their Health Care Agent on their behalf) to set forth his or her health care and end-of-life care instructions when faced with a life-threatening medical condition. A MOST must be obtained from a physician and is written on a special form. In North Carolina, the MOST form is color-coded (bright pink paper) and should be shared with all of the patient’s health care providers and posted prominently in the patient’s place of residence. A MOST form generally provides guidance regarding whether the following treatments should or should not be administered:

    • Cardiopulmonary Resuscitation (CPR);
    • General instructions regarding scope of medical treatment and whether it should include use of mechanical breathing, intubation, and similar;
    • Antibiotics;
    • Artificial Nutrition; and
    • Artificial Hydration.

    Get Started on Your Planning & Peace of Mind

    We can guide you through the steps of creating a comprehensive health care plan and make the process as easy as possible for you and your family. A great place to start if you're looking to learn more is to attend one of our free public seminars or request our report, Estate Planning Pitfalls: The Twelve Most Common Threats To Your Estate & Your Family’s Future. If you'd like to discuss other ways to get started, call us at 919-586-8222 or complete our online contact form.

     

  • What Is a HIPAA Authorization? Why Is It Important?

    HIPAA Confidential Patient Health RecordsThe HIPAA Privacy Rule under the Health Insurance Portability & Accountability Act went into effect in 2003 and includes strict rules prohibiting health care providers, health insurance providers and similar from sharing your health information—including prohibiting them from sharing it with your spouse or family in an emergency.

    While the law is well intended to protect our privacy, it has come with the tradeoff of creating cumbersome burdens for family members who may receive the ‘silent treatment’ from hospitals and doctors that will not speak to them.

    When you visit your doctor, you may be asked to sign a HIPAA form including naming an emergency contact. Many think that this is all that is required, but unfortunately, those forms give you a false sense of security. Those forms only apply to that specific hospital or doctor and some may expire after a certain period of time.

    For example, a while back we had a couple visit our office to update their planning. The wife had recently undergone surgery at Rex Hospital. When she had entered the hospital for her treatment, she signed the appropriate forms, including a HIPAA Authorization that Rex was authorized to communicate with her husband. Due to some complications that arose, the woman ended up being transferred from Rex Hospital to Wake Med. When her husband attempted to talk to the doctors and hospital staff at Wake Med they refused to speak with him. The forms that the woman had signed before the surgery were specifically for Rex Hospital and did not apply to Wake Med.

    In addition to issues with hospitals and doctors, HIPAA also can rear its ugly head when dealing with insurance and billing matters. If your Durable Power of Attorney or Trustee needs to contact the hospital with a question about a medical bill or if they need to change your health insurance plan, they also can get stone-walled by the HIPAA privacy rule.

    In addition to a thorough Health Care Power of Attorney and Living Will, we recommend that all adults have a standalone HIPAA Authorization that clearly authorizes your health care providers to communicate with your Health Care Agent, your Durable Power of Attorney, your Trustee, and any other family members or close friends you wish to name.

    Get Started on Your Planning & Peace of Mind

    We can guide you through the steps of creating a comprehensive health care plan and make the process as easy as possible for you and your family. A great place to start if you're looking to learn more is to attend one of our free public seminars or request our report, Estate Planning Pitfalls: The Twelve Most Common Threats To Your Estate & Your Family’s Future. If you'd like to discuss other ways to get started, call us at 919-586-8222 or complete our online contact form.

     

  • What is a Stretchout Protection Trust (a.k.a., IRA Trust or Retirement Plan Trust)?

    Supercharge Your IRAA Stretchout Protection Trust that is specifically designed to receive your retirement accounts for tax efficiency and asset protection. A Stretchout Protection Trust is separate from your Will or Living Trust. During your lifetime, you remain the owner of your retirement plan, but you name the Stretchout Protection Trust as the beneficiary of the account upon your death.

    Frequently, the Stretchout Protection Trust will be designed to match the distribution pattern of your Will or Living Trust, but the Stretchout Protection Trust is designed precisely to comply with the IRS rules. This will ensure that your beneficiaries remain eligible for the Inherited IRA “stretchout” option.

    In addition to ensuring your beneficiaries get the most out of their “stretchout” option, a properly structured Stretchout Protection Trust can provide several powerful protections. If someday your child goes through a divorce, the retirement accounts are completely protected. If your child is sued or files for bankruptcy, the retirement accounts are protected. If your child dies, the Trust ensures that the funds remain in your bloodline and continue on to your grandchildren.

    If your child or beneficiary is a minor, you can specify who should serve as Trustee while they are young. Plus, rather than your child gaining full control of the account at age 18, you can choose the age your child gains access to the account.

    If your beneficiary is disabled or has special needs (or becomes disabled in the future), the Stretchout Protection Trust can qualify as a “Special Needs Trust” so that the assets don’t count against your beneficiary when he or she is qualifying for Medicaid, SSI, or similar government benefits. This built-in protection allows the inherited money to be spent on allowable expenses, typically things not covered by Medicaid or SSI, so that your beneficiary has a better quality of life while still receiving their important medical benefits.

    Discover How to SUPERCHARGE Your IRA and Maximize Your Family’s Future

     

  • Should I Name My Estate or Living Trust as the Beneficiary of My IRA or Retirement Plan?

    Supercharge Your IRAIf you read our previous articles on the power of IRA and retirement plan "stretchout" planning and what happens to your IRAs and retirement plans upon death, you might think that a positive solution would be to name your estate as your beneficiary so that the executor you’ve chosen can manage your retirement plans for you.  You chose them because they're responsible and you trust them, so what’s the harm, right?

    Unfortunately, the IRS rules require that if you designate your “estate” as the beneficiary of your retirement account, then the retirement account MUST be distributed according to the 5-year distribution rule. There is no Inherited IRA “stretchout” option.

    Likewise, if you think that you'll be able to name your Living Trust as the beneficiary of your retirement plan, you’ll also run into similar problems. The IRS rules for qualifying for the Inherited IRA “stretchout” option are extremely specific, and a Living Trust typically will not qualify. Thus, if you name your Living Trust as the beneficiary of your retirement plan, your family will again be stuck with the mandatory 5-year distribution option upon your death, causing the account to be prematurely taxed thereby losing the benefit of tax-deferred growth.

    Discover How to SUPERCHARGE Your IRA and Maximize Your Family’s Future

     

  • How Much Will It Cost to Administer My Loved One’s North Carolina Estate?

    This is a common and reasonable question, but it can also be a difficult one to answer without a more detailed look at the situation. A common rule of thumb is that total probate and estate administration costs tend to end up in the range of 2-8% of the estate. And while it might be tempting to think that a smaller estate will be on the lower end of that range, it often is an inverse relationship—for smaller estates, a large percentage may be spent on probate expenses because there are certain expenses and tasks that need to be handled even though it’s a smaller estate.

    Here are some factors involved in the costs to administer a North Carolina probate:

    First, depending upon the nature of your loved one’s estate, there are likely to be several professionals involved, including attorneys, accountants, and financial advisors. It is also common to involve appraisers for real estate or other property. And in some more complicated estates, it may be necessary to hire auctioneers, surveyors, business appraisers, or other professionals.

    When hiring a professional, the Executor or Trustee should have a formal written engagement agreement with the professional that outlines the scope of services being provided by the professional.

    Need Some Help? How We Do Things:

    We understand people don’t like dealing with uncertainty and would prefer transparency. We try—when permitted— to quote such services on a flat fee basis, considering the nature of the Estate and what actions we expect will be needed to complete the Administration process.

    In other instances, we may be required to work on an hourly billing basis—either because the rules in the county where the Estate Administration is occurring do not allow for flat fee billing, or because there are too many “unknown” factors for the law firm to be able to properly establish an appropriate flat fee rate. Occasionally we may recommend a hybrid of the two with part of the work to be completed on a flat fee basis and part to be completed on an hourly billing basis.

    Carolina Family Estate Planning is available to help you with the estate administration process. Our process begins with an initial consultation that we call the “Information Gathering Meeting.” It’s an opportunity for you to gather some information about the law firm and our Estate Administration process while we gather additional information from you about your loved one’s estate. During the Information Gathering Meeting, we’ll give you a broad overview of what to expect during the Estate Administration process. Generally, near the conclusion of the Information Gathering Meeting, or shortly after the Information Gathering Meeting, we will provide you with a flat fee quote for assisting you with the Estate Administration process or a recommendation that the Estate Administration be handled on an hourly billing basis.

     

    Losing a loved one is hard. The days and weeks after a loss are often fraught with grief, questions, and unfortunately, family complications. It’s a terrible time to try to think through a legal process clearly. It’s often a challenge just to know where to start. Maybe you’re not even sure what questions to ask and whom to ask. How do you know you’re getting good advice and doing it right? You could probably use some help. Our Understanding Estate Administration guide can help. This guide will give you an overview of the probate and estate administration process in plain English. Request your free copy here.

     

  • Do I Need to Hire a Probate Lawyer to Help Me with the North Carolina Estate Administration?

    Ultimately, it depends on the nature of the Estate and your goals. We find that there are few truly “simple” estates—and those that are “simple” are generally ones that have less than $50,000 in total assets (including the value of the home). The more assets that are at stake, the more work there is to do, the more legal requirements involved, and the more decisions that need to be made.

    Most people have little to no experience with settling an Estate, which results in a “you don’t know what you don’t know” hazard. Unfortunately, the Estate Administration process is fraught with potential landmines for the ill-informed and the Executor or Trustee is held personally liable for complying with the law—meaning that if you make a mistake, you could be held responsible by a Court to correct the error, and if such error caused financial harm to the Estate, you would have to reimburse the Estate from your personal savings to correct the error. Therefore, many Executors and Trustees hire a law firm to assist them with the Estate Administration process. By hiring a reputable law firm to assist you, you limit your liability exposure by shifting your liability to the law firm’s professional malpractice liability.

    In addition, the role of Executor or Trustee can be incredibly time-consuming. Even a modest estate can require 10-20 hours per week of your attention, depending on what phase of Estate Administration you are in. This is a lot of work and responsibility to take on—particularly at a time while you are grieving the loss of your loved one and trying to meet your other day-to-day responsibilities such as family obligations and “day job” requirements.

    We often find that when an Estate has more than $50,000 in total assets, the costs of hiring professional legal assistance are worth the savings in time, energy, hassle, headaches, and liability protection. In some instances, your attorney may even be able to spot monetary savings to the Estate, such as tax savings opportunities or opportunities to negotiate a discount on settling claims of the Estate.

    Losing a loved one is hard. The days and weeks after a loss are often fraught with grief, questions, and unfortunately, family complications. It’s a terrible time to try to think through a legal process clearly. It’s often a challenge just to know where to start. Maybe you’re not even sure what questions to ask and whom to ask. How do you know you’re getting good advice and doing it right? You could probably use some help. Our Understanding Estate Administration guide can help. This guide will give you an overview of the probate and estate administration process in plain English. Request your free copy here.

     

  • Will I Get Paid for Serving as Executor or Trustee?

    Unless the Will provides otherwise, under North Carolina law, Executors or Administrators may claim a commission of up to 5% of the Estate assets and receipts, as approved by the Clerk of Court.

    Trusts should provide specific guidance regarding compensation. Frequently, the Trust might state that the Trustee is entitled to “reasonable compensation” for their work in serving as Trustee.

    If the Trust does not provide any instruction regarding compensation, then the North Carolina Uniform Trust Code provides guidance regarding trustee compensation and reimbursement of expenses.

    A Few Caveats:

    It is important to understand that any such commission or compensation received is taxable income to you that you will be required to report on your personal tax return.

    If you hire a professional to complete most of the work, then it may not be appropriate for you to claim a commission or compensation, or at the very least, the amount of such commission or compensation should be reduced accordingly.

    Given that (1) most Executors or Trustees are family members and are also Beneficiaries of the Estate, (2) most Executors or Trustees hire professional legal assistance; and (3) any such commission or compensation must be reported as taxable income, we find that many Executors or Trustees opt to waive commission or compensation.  However, each situation is unique. Your attorney can provide you with guidance as to whether it may be prudent to claim a commission or compensation.

     

    Losing a loved one is hard. The days and weeks after a loss are often fraught with grief, questions, and unfortunately, family complications. It’s a terrible time to try to think through a legal process clearly. It’s often a challenge just to know where to start. Maybe you’re not even sure what questions to ask and whom to ask. How do you know you’re getting good advice and doing it right? You could probably use some help. Our Understanding Estate Administration guide can help. This guide will give you an overview of the probate and estate administration process in plain English. Request your free copy here.

     

  • Can I Be Reimbursed from the Estate for Travel or Other Expenses Relating to My Loved One’s Funeral?

    When a loved one dies, a common question is along these lines: “My mother just died and I’m the Executor. I’m flying to North Carolina with my wife and children, and my sister and her family are coming too. Can I pay for all the travel, lodging, food, and similar expenses from the Estate or from my mother’s checking account? That’s what she would have wanted.”

    While this might sound like a reasonable request, as Executor, you must proceed with caution. As Executor or Personal Representative, you are personally liable for the proper management and spending of the estate assets—meaning that if you make a mistake, it comes out of your own pocket to fix it.

    An Executor or Trustee can be reimbursed for reasonable travel expenses incurred to properly administer the Estate including to clean up the Decedent’s home. This also includes costs associated with final arrangements such as burial or cremation, and a funeral or reception. However, unless the Will or Trust has a specific clause indicating otherwise, paying for other family members’ travel expenses from the Estate is generally not permitted.

     

    Losing a loved one is hard. The days and weeks after a loss are often fraught with grief, questions, and unfortunately, family complications. It’s a terrible time to try to think through a legal process clearly. It’s often a challenge just to know where to start. Maybe you’re not even sure what questions to ask and whom to ask. How do you know you’re getting good advice and doing it right? You could probably use some help. Our Understanding Estate Administration guide can help. This guide will give you an overview of the probate and estate administration process in plain English. Request your free copy here.