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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  • 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.

     

  • What Happens If A North Carolina Decedent Dies Without a Valid Will?

    When someone dies without a Last Will and Testament, the decedent is “intestate.” The North Carolina Intestacy Laws provide specific rules regarding how an Estate will be distributed in the absence of a valid Last Will and Testament. The distribution rules under the Intestacy Laws involve several different factors, such as whether there is a surviving spouse, whether the Decedent had lineal descendants, and whether there are unborn children. If there is no spouse or lineal descendants, the Intestacy Laws then branch further out into the Decedent’s family trust—potentially to parents, siblings, or further removed relatives.

    Often, the Intestacy Laws do not distribute the estate the way that most people would expect. For example, married couples often assume that the assets would all go to the surviving spouse. However, if there are children, then part of the estate goes directly to the children. If there are not children, then part of the estate may go to any living parents.

    Properly determining the appropriate Heirs and distribution shares in an Intestate Estate is critical to the proper administration of the Estate. We strongly encourage you to hire legal assistance to ensure the proper administration of an Intestate 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.

     

  • How Long Does Probate & Estate Administration Take in North Carolina?

    Administering an uncontested probate and estate administration in North Carolina generally takes between six months to a year. The process and time involved can vary depending upon the nature and complexity of the Estate.

    If there is an Estate dispute, due to the nature of the legal system, the dispute may take months or years to resolve, which will then impact how long it takes to administer the Estate.

    In limited circumstances, a smaller estate may be administered in 90 days or less in North Carolina, such as:

    • If the surviving spouse is the sole beneficiary and the probate assets are worth $30,000 or less than the Spousal Election may be appropriate;
    • Summary Administration or Affidavit for Collection of Personal Property of a Decedent may be possible for an estate consisting only of small amounts of personal property ($30,000 if surviving spouse is sole beneficiary, otherwise $20,000 or less).

    However, it should be noted that some of these procedures for small estates may streamline the estate administration process, they also may come with certain risks. For example, with Summary Administration or Affidavit for Collection the recipient of the decedent’s assets may still be subject to the decedent’s creditors. Often, the decedent’s creditors may not be known, creating the risk that a previously unknown creditor will show up later to claim money owed. While formal estate administration can be more time-consuming, it ensures that all debts have been cleared and beneficiaries have clear right to the estate assets.

     

    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 Probate and/or Estate Administration Necessary for My Loved One’s Estate?

    It depends on the nature of the Estate. Many assets pass outside of Probate and Estate Administration. For example, assets with Beneficiary designations such as retirement accounts and life insurance may pass outside of Probate.

    Many individuals opt to use Trusts to keep assets out of Probate. However, it is important to understand that Estate Administration is still necessary with a Trust. If properly established, the Trust permits the Estate Administration to be handled privately, without court supervision.

    Even if there do not appear to be assets in the Testate Estate, if there is a valid Last Will and Testament, North Carolina law requires that it be filed with the Clerk of Court in the county in which the Decedent resided at time of death.

    If you need help determining the appropriate steps regarding Estate Administration and whether Probate is required, you should consider hiring 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's a Revocable Living Trust?

    There are many different types of trusts. One of the most commonly used is the Revocable Living Trust (also known as RLT or Living Trust). Essentially, "revocable" means you can change your mind, and make changes to the trust—including restating the entire document with new terms. Let's assume that the fancy words "your assets" just mean "your stuff."

    A revocable living trust is like a box with an open top. You can put your stuff in the box and take your stuff out at any time. When you set up the trust, you put all of your stuff, such as your home and bank accounts into the trust. Maybe a few months later, you open a new account at the bank. It can go in the trust.  Then, the following year, you take out some stock in the latest wonder company—you can put it in the trust. A few years later, you decide to sell your home and buy a new home in another neighborhood. You can take the old home out of the trust and sell it, and then when you find your new dream home, you can purchase it and put it in the trust.

    You appoint yourself as the initial trustee of the trust.  The trustee is the person that is responsible for managing the trust assets. If you become incapacitated or when you die, the trust document includes your written instructions specifying who takes over as successor trustee and what they are supposed to you with your stuff. The trust holds everything securely so that your family should not have to face the horrible prospect of probate at the time of death.  

    Additional information:

    To learn more about common estate planning issues, check out our free guide, Estate Planning Pitfalls: The 12 Most Common Threats to Your Estate & Your Family's Future, or to discuss your estate planning concerns, please call our office at 919-443-3035 or use our contact form.

  • What's the Difference Between a Testamentary Trust, Revocable Living Trust, and Irrevocable Living Trust?

    Estate Planning PitfallsThere are as many different types of trusts that may be used for different goals.  First, let’s cover some basic terminology:

    • Trust is a contract between a Trustmaker, a Trustee, and the Beneficiaries.
    • The Trustmaker (also sometimes referred to as the grantor, donor, or settlor) is the person who creates the trust instructions and transfers property to the trust.
    • The Trustee is the person who administers the trust according to the instructions provided in the trust document.
    • The Beneficiary is the person or entity who benefits from, or will benefit from, the Trust.
    • There may be more than one Trustmaker, Trustee, or Beneficiary of a Trust and the same individual may serve in more than one role. For example, the Trustmaker may also appoint himself or herself as the initial Trustee of the Trust.

    Trusts can be used for a variety of purposes, such as:

    • Providing for the future management of assets if you should become incapacitated.
    • To avoid probate upon your death.
    • To provide for the management of assets on behalf of a young or financially irresponsible beneficiary.
    • To provide for the management of an asset that is to be shared among multiple beneficiaries such as a family vacation home.
    • To limit a beneficiary’s direct access to assets, particularly if the beneficiary is a big spender, has a substance abuse problem, or other similar concern.
    • To protect assets from future lawsuits, creditors, or divorce.
    • To reduce income or capital gains taxes.
    • To reduce estate or gift taxes.

    Trusts are not one-size-fits-all. Trusts must be customized to carry out the individual Trustmaker’s wishes.

    Testamentary Trust

    The formal name for a Will is a Last Will and Testament. The term “Testamentary Trust” is generally used to refer to a Trust that is written into a Will and does not take effect until after the Trustmaker dies. For example, if you have minor children, you might specify that if your children are still below age 25 when you die, the assets of your estate should be held in trust for your children. You can amend or revoke a Testamentary Trust by changing your Will. However, after your death, a Testamentary Trust usually becomes irrevocable (see below).

    Our Heir Safeguard Testamentary Trusts are a popular tool for leaving assets to beneficiaries protected from future lawsuits, creditors, or divorce.

    Revocable Living Trust

    A Living Trust is a Trust established by the Trustmaker that becomes effective while the Trustmaker is living. A Revocable Living Trust is a Living Trust in which the Trustmaker has retained the power to modify or revoke the Trust at any time.

    Revocable Living Trusts are a common estate planning tool for avoiding probate.  A Revocable Living Trust may also provide several other benefits such as leaving things to your beneficiaries protected in the event that your spouse remarries, or protecting your beneficiaries from future lawsuits, creditors, or divorce.

    Irrevocable Trust

    Many people think that an Irrevocable Trust is a trust that cannot be changed or modified, but this is wrong. An Irrevocable Trust is a trust that contains at least one provision that the Trustmaker does not have the power to modify by himself. It’s possible that the Trustmaker may have retained several powers including the power to change the beneficiaries of the Trust.

    As stated above, a Testamentary Trust generally becomes irrevocable after the Trustmaker’s death. In certain circumstances, an Irrevocable Trust may still be modified by court order or by following specific provisions under the Uniform Trust Code. Such irrevocable trusts are a popular tool for leaving assets to a beneficiary protected from financial immaturity or irresponsibility, or future lawsuits, creditors, or divorce.

    An Irrevocable Living Trust refers to an Irrevocable Trust created while the Trustmaker is living. The most common reasons for using an Irrevocable Living Trust include asset protection and tax planning.

    Want to Learn More About Wills & Trusts?

    Feeling overwhelmed trying to sort out your options? Many of our clients have told us that they felt overwhelmed when they first began planning, but with our help, we helped them make sense of the options and design a plan to fit their goals. We've empowered thousands of Wake County-area residents to take control of their future with their estate planning and long-term care planning solutions.

    To get started, register for one of our upcoming seminars, download our free guide, Estate Planning Pitfalls: The 12 Most Common Threats to Your Estate & Your Family’s Future, or call us at 919-443-3035.

  • What is a Living Trust and Why You Might Want One?

    Probate can be a time-consuming and often costly process when administering your estate if you have a will. What if there were a way to specify when and how you want your children to receive their inheritance, who will manage it while they are younger, all while avoiding the tedious probate process?  That’s where a Living Trust comes into play.

    A Living Trust is a set of instructions from you designed to authorize someone you designate as “trustee” to administer your trust estate in the event of you become incapacitated or in the event of your death.  Assets that are titled to a Living Trust generally do not have to go through Probate—thus avoiding many of the unnecessary costs and delays associated with the probate process.

    However, there are other reasons besides avoiding Probate to have a Living Trust, including protecting beneficiaries from future creditors, lawsuits, divorce, or disability, or providing for the continuing administration of the estate for a minor beneficiary. In addition, privacy and reduced costs of administration are often additional advantages of a Living Trust.

    There are many different types of Living Trusts that may be used for different purposes. 

    Additional Information:

    To learn more about common estate planning issues, check out our free guide, Estate Planning Pitfalls: The 12 Most Common Threats to Your Estate & Your Family's Future, or to discuss your estate planning concerns, please call our office at 919-443-3035 or use our contact form.

  • Does a Will Avoid Probate?

    I often find that often people have heard horror stories about probate or that it’s important to “avoid probate” but they aren’t even sure what probate actually is or why people want to avoid it.

    Technically “probate” refers to the proving of the will (i.e. that there is a will and that the court has determined that it is valid) and then separately there is the administration of the estate (i.e., the actual handling of the assets of the estate).  Most people refer to these collectively as “probate.” Thus, as you might have already inferred, a will does not avoid probate.  In fact, having a will is a one-way ticket to probate.

    When the court is involved in overseeing the administration of your estate (i.e., the probate process), this can cause things to get bogged down and add unnecessary fees.  The executor of your will must be legally acknowledged by the court before the executor can even begin handling your estate.  And then there are a variety of tasks, accountings, and filings that are required as part of the probate process—all while the court babysits your executor, which tends to slow things down.

    It’s not uncommon for the costs of probate, between court costs, legal fees, executor commissions, appraisals, and so forth, to cost 2-5% of the probate estate, and the process can take anywhere from several months to a year or longer to complete.

    That means that your family could wind up spending 9 to 18 months or longer dealing with the court, spending 2-5% of the estate on probate costs, and because this is a court process, everything—your will, what you owned, who is receiving what, etc. becomes a matter of public record for any nosy person to see.

    That is why you hear about people wanting to avoid probate. We help families look at their specific circumstances and estate planning goals and determine whether planning to avoid probate should be part of their planning.  

    To learn more about common estate planning issues, check out our free guide, Estate Planning Pitfalls: The 12 Most Common Threats to Your Estate & Your Family's Future, or to discuss your estate planning concerns, please call our office at 919-443-3035 or use our contact form.