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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  • What is the Surviving Spouse “Elective Share” in North Carolina?

    When a married Decedent dies, his or her surviving spouse has a right to claim a portion of the Estate. It is referred to as the “Elective Share” because the surviving spouse must elect to claim such share by proper filing of a claim for elective share within six months of the Decedent’s death.

    Effective October 1, 2013, the Elective Share amount in North Carolina is based upon the length of the marriage:

    • If the surviving spouse was married to the Decedent for less than 5 years, the elective share amount is 15%;
    • If the surviving spouse was married to the Decedent for at least 5 years, but less than 10 years, the elective share amount is 25%;
    • If the surviving spouse was married to the Decedent for at least 10 years, but less than 15 years, the elective share amount is 33%;
    • If the surviving spouse was married to the Decedent for 15 years or more, the elective share amount is 50%.

    The Elective Share laws also include very specific definitions for determining which assets count as part of the “Estate” for purposes of the calculation.

    If you are a surviving spouse who is contemplating filing for an Elective Share, or if you are an Executor facing such a claim by a surviving spouse, we strongly encourage you to hire legal assistance.

     

    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.

     

     

  • What Is the Spousal Allowance or Dependent Allowance in North Carolina?

    North Carolina law provides for a year’s allowance for the surviving spouse and dependent children of a deceased individual.

    Under North Carolina law, the surviving spouse of the Decedent is entitled to the first $30,000 of the Intestate or Testate Estate. Similarly, a dependent child of the Decedent may be entitled to a $5,000 allowance from the Intestate or Testate Estate.

    The Court has specific forms for claiming the Year’s Allowance. A Surviving Spouse can also renounce the Spousal Allowance if he or she does not wish to claim it.

     

    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.

     

  • What Happens If a North Carolina Decedent Owns Property in Another State or Country?

    The main estate proceeding, referred to as the Domiciliary Estate Administration, will take place in the county in which the Decedent resided at death. However, if the Decedent owned property in another state, then it is possible that an Ancillary Administration may be needed in the other state. The Ancillary Administration will be based upon the laws of the state where the out-of-state property is located. Similarly, if the Decedent owned property in another country, it will be handled in accordance with the laws of the other country.

    It is important to note that although the property may be owned in another state or country, the property generally still needs to be included in the accounting of the North Carolina Estate and on the North Carolina and Federal tax returns 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.

     

  • A Family Member Is Living in the Decedent’s Home and Refuses to Leave. What Do I Do?

    If the person is residing in the home pursuant to a valid lease agreement, then you must abide by the terms of the lease agreement. Otherwise, if the home is part of the Estate, the Executor has the authority to determine who may reside in the home. If the home is part of the Trust Estate, then the Trustee has the legal authority to determine who may reside in the home. It is important to note that if the Executor or Trustee does authorize someone to live in the Estate home, even if it is a family member, the family member should pay fair market rent to the Estate, unless all Beneficiaries of the Estate agree otherwise.

    If the person is residing in the home without the proper authority of the Executor or Trustee, then they can be evicted using the same process by which a landlord might evict a squatting tenant. The eviction process is handled through a different division of the Court from the Estate proceeding.

     

    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.

     

  • Is it Okay if the Family Meets at the House After the Funeral to Distribute Household Furniture and Possessions?

    Many of our Wake County clients have family that lives all over the country and the world. Their family may have traveled from near and far to attend the funeral, which often raises the question: while everyone is here, can we meet at the house to distribute the household furnishings and personal possessions?

    Unfortunately, the answer is almost always, No. Only a legally appointed Executor or Trustee has the authority to manage and distribute assets of the Decedent. Until the Executor has been formally appointed by the Court or the Successor Trustee has been legally recognized, none of the Decedent’s possessions should be distributed.

    Even once you have been appointed as Executor or Trustee, you should proceed with caution. Often, household furnishings and personal possessions come with huge sentimental attachments and are one of the most common sources of family fighting when settling an estate.

    The Will, Trust, or Personal Property Memorandum of the Decedent may include specific instructions regarding the proper distribution of household furnishings and possessions. As Executor or Trustee you can be held personally liable for improperly safeguarding and distributing the personal property, furnishings, and possessions.

     

    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.

     

  • Should I Open My Loved One’s Safe Deposit Box?

    If the Decedent had a safe deposit box at a local bank, it is important that you do not remove any contents of the safe deposit box.  After the death of an owner, a safe deposit box must be properly inventoried by the Executor or Personal Representative according to specific procedures that generally include the presence of the Clerk of Court, a Deputy Clerk, or other Qualified Person as defined by law.

    Many are under the impression that if they just add their adult children to their safety deposit box that this eliminates the need for an inventory of probate after their death, but this is not true. Just because you may have a key to the safe deposit box does not authorize you to access the contents of the safe deposit box.

    If you are a lessee, co-tenant, or deputy of the decedent’s safe deposit box, then you may have legal authority to access the safe deposit box without the presence of the clerk of court. However, the safe deposit box still must be properly inventoried and accounted for by the Executor or Personal Representative as part of the probate and estate administration process.

    If you believe your loved one may have had a safe deposit box but do not know where it is located, try contacting all financial institutions where your loved held accounts, ask family members, and ask your loved one’s attorney.

     

    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.

  • Why Do I Need a Will or a Trust in North Carolina?

    In a previous FAQ, What Happens If I Die Without A Will?, I discussed North Carolina intestacy law and who would receive your property if you were to die without a will. 

    Distribution of your estate without an estate plan is probably not what you would want to happen. The following are my Top 9 Reasons Why You Probably Shouldn't Rely On the North Carolina Intestacy Statues to Carry Out Your Wishes When You Die.

    #1 If You Have Minor Children, the Intestacy Laws Do Not Provide a Means of Appointing a Guardian to Care For Your Children

    When it comes to your children, I’m sure you take precautions as to who cares for them.  You ask around for recommendations of a reputable babysitter.  You research their school districts, teachers, coaches, etc.  So why would you want to leave it to the courts to decide who cares for your children after your death?

    #2 If You Have Minor Children, I Do Not Recommend You Leave Property To Your Children Outright

    Under North Carolina law, children are not allowed to own property.  As such, if property passes to a child directly, either under a will or under the intestacy laws, the courts will appoint someone to manage the property on behalf of your child.  This process can be time consuming, frustrating and costly.  The person appointed must file an annual accounting each year reporting (to the penny) all money into and out of the children’s accounts.  While this might seem like a reasonable protection, the result is that it often binds the hands of a surviving spouse or guardian that is caring for the children, for example, making it difficult to handle such day to day responsibilities such as paying mortgage, utilities, educational expenses, etc.  It is instead recommended that you include a trust for minors in your will or have a separate trust agreement to provide for the management of the children’s property.  Such a document can be drafted to protect your children while still allowing flexibility to the surviving spouse or guardian.

    #3 Problems Frequently Arise In Blended Families

    In families with step-parents or step-children, certain family members that you do or do not want to be included may not receive the treatment you would like.  For example, if you are a step-parent that would like some of your property to pass to your step-children but you have not legally adopted the step-children, the step-children will not receive anything via intestacy.

    #4 Couples Who Don't Have Children Usually Want Their Spouse To Receive Everything

    In my experience, most married clients without children want to leave everything to their spouse.  However, under the intestacy laws, their parents would actually receive a substantial share of their possessions.

    #5 Unmarried People May Not Wish to Leave Everything To Their Parents

    Again, in many instances, unmarried persons would instead prefer to leave assets to their siblings, nieces and nephews, a friend, or a charity. Please note: North Carolina State Law does not recognize the concept of a "common law" marriage.

    #6 The Intestacy Distribution Scheme Does Not Include Charitable Gifts

    Many clients, even if it is only a small amount, like to leave a gift to charity.  The intestacy distribution scheme does not allow for such.

    #7 Heirlooms and Sentimental Possessions May Be Sold

    Often people have special family heirlooms, family vacation homes or other sentimental possessions, that they want to ensure remain in the family and are not sold upon their death.  If the property passes through intestacy, there is a greater likelihood that such property may be sold.  Having a valid will can ensure property treatment of such sentimental property.

    #8 Equal May Not Be “Fair”

    The intestacy statutes lean towards equal division of property to those within the same generation.   For example, equal division among parents if you property passes to your parents, or equal division among children if your property passes to your children.  The reality, for many, is that an equal distribution may not be a “fair” distribution.  For example, parents with adult children often use wills to leave unequal amounts to their children due to particular circumstances.  The parents may choose an unequal distribution because during lifetime they spent disproportionally more money putting one child through graduate school.  Another common reason is that one child may have stayed close to home and taken on the caretaker role as the parents aged.

    #9 Special Circumstances Will Not Be Factored In

    There are many, many reasons why intestacy will not fit most people’s wishes.  Intestacy statutes are drafted with a “one size fits all” mindset, and just like one size fits all T-shirts, the intestacy laws often end up fitting very few people properly.  The laws cannot take into account each person’s particular circumstances, so special situations will not be adequately resolved under the intestacy laws.  Such special circumstances might include the need to provide for a special needs child, a pet, a business ownership interest, a close friend, charity, and so on.

    You Can Do Better!

    Every day we are working with families in the Raleigh-Durham-Cary area to put together plans that preemptively address not only who gets what stuff, but how to carry on your values when you no longer can through services including:

    • Asset Protection to help protect the inheritance your heirs receive from potential divorce, lawsuits, or creditors;
    • Long-term care planning, to make sure you and your spouse can have the best life possible in your later years;
    • Children's Safeguard Planning, if you have minor children, to make sure they don't end up in Child Protective Services if something happens to you unexpectedly; and
    • Special Needs Planning, to make sure your loved ones are cared for when you no longer can provide for them.

    With Estate Planning, things can go very right... or they can go very wrong. For more information on how Carolina Family Estate Planning can help you get it right, call our office at 919-443-3035 to discuss next steps, contact us online, or reserve your seat at an upcoming seminar

  • Should I Notify the Bank or Close the Decedent’s Bank Accounts?

    There are several inaccurate myths pertaining to the administration process that should be addressed.  Many people are under the mistaken impression that when someone passes away, the family should race to the bank and immediately close all accounts.  Not only is this unnecessary (and depending on the circumstances, you may not even be legally authorized to do so) but doing so may cause an adverse tax consequence and can cause significant problems with the proper administration of the estate. 

    It may, however, be prudent to notify the bank of the Decedent’s death. If notified, the bank will typically block any further charges to the account from expenses that may be on direct debit or online bill pay. This can prevent the account from going into overdraft status and getting charged overdraft fees by the bank.

     

    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.

  • How Do We Pay for My Loved One’s Funeral or Cremation in North Carolina?

    Losing a loved one is hard—and stressful. Often of the first worries that arises is tending to your loved one’s final arrangements and figuring out the best way to pay for the funeral or cremation.

    First, review your loved one’s important papers to determine whether he or she may have a prepaid funeral or cremation or some sort of burial life insurance policy or similar.

    In the absence of any prepaid arrangements or burial life insurance, you’ll need to determine an alternate way to pay for funeral and final expenses. Generally, you will not yet have access to the Decedent’s estate to pay the funeral home. The most common option is for one or more family members to advance the costs of the final arrangements to be reimbursed by the Estate later. Other options for paying final arrangement-related expenses include:

    • A funeral loan which is later paid off from the Estate;
    • Assigning a life insurance policy (see caution below); or
    • Occasionally, a funeral home will agree to delay receipt of payment until the Decedent’s accounts can be accessed, if accompanied by an attorney letter and proof that the Decedent’s estate has sufficient assets to pay for the final arrangements.

    You should exercise caution if you are considering assigning a life insurance policy to pay for final arrangements. Generally, with such an arrangement, the life insurance company will disburse all the funds to the funeral home. Then, once all the final arrangements have been paid for, the funeral home will refund the remaining funds to the Decedent’s Probate Estate. But there’s a problem with this—normally, when the life insurance hasn’t been assigned, the proceeds pass outside of the Probate Estate and go directly to the Beneficiaries named on the policy. As such, the proceeds from a life insurance policy normally are not subject to the creditors of the Estate. If the funeral home refunds the remaining life insurance proceeds after payment of final arrangements to the Decedent’s estate, then those funds now become subject to the creditors of the Estate.

     

    Tending to your loved one’s final arrangements and affairs can be overwhelming. 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.

     

  • What Legal Duties Does an Executor or Personal Representative Have in North Carolina?

    Executors and Personal Representatives of an estate have many legal duties under North Carolina law, including duties to ensure the proper administration and management of the assets of the estate during the probate process.  

    Duties of North Carolina Executors and Personal Representatives include:

    • Locating the decedent’s will
    • Gathering information about the decedent’s assets
    • Taking certain measures to safeguard the assets and property of the estate
    • Act in the best interests of the estate
    • Handle all required court filings in an accurate and timely manner
    • Prepare exact accountings of the estate’s assets
    • Properly notify known and unknown creditors
    • Handle all local, North Carolina, and Federal tax filings and liabilities
    • Identify and appropriate pay or reject all claims against the estate
    • Handle administrative expenses of the estate
    • Properly allocate and distribute assets to the estate’s beneficiaries
    • Retain records and receipts for all estate receipts, expenses, and distributions
    • Properly close the estate when administration is complete

    While being named Executor can be an honor—your loved one trusted you with the responsibility of settling his or her final affairs—it also comes with a lot of responsibility and risk. An Executor or Personal Representative breaches fiduciary duty is personally liable for such breach—meaning that if you mess up, it comes out of your own pocket, not the estate’s pocket. This is why is it is a smart decision to hire a probate lawyer to assist you.

     

    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.