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 Medicaid?

    Medicaid is a program created under the Social Security Act.  The act created a joint federal and state medical assistance program for the aged, blind and disabled. 


    Recipients under the Medicaid program do not receive payments directly from the government.  Instead, if an individual qualifies for Medicaid, the payments are made directly to his or her health care provider, such as the doctor, hospital, nursing home, pharmacy, medical testing facility, or dentist.

  • How much are attorney fees to handle a North Carolina probate? How much are fees to handle a North Carolina trust administration?

    Attorney fees for the administration of a North Carolina estate will vary from one estate to another and the capacity in which the attorney is working. If the responsibilities of the attorney are limited to assisting the executor with the estate administration process, then the North Carolina statutory law provides that the attorney’s fees must be reasonable and not exceed 5% of the estate.  Furthermore, the fees will offset the executor’s commission.  So, for example, if the executor hires an attorney to do the majority of the work, the executor’s commission will be relatively low to offset the attorney’s fees for handling the administration. 

    However, if the attorney provides legal services that are beyond routine estate administration, there is no cap on the amount of attorneys’ fees. They must simply be reasonable under the circumstances.  This might include handling a will contest or estate litigation, lawsuits brought by creditors, wrongful death lawsuits, and similar services. 

    While there aren’t many statistics available on the subject, anecdotally, attorneys’ fees tend to average between 1% to 7% of the estate.  Proportionally, smaller estates tend to pay a higher percentage in attorneys’ fees because there is a certain base amount of work that must be done no matter the size of the estate.

    Most trust and estate lawyers either bill on an hourly basis or some sort of flat fee arrangement.  With hourly billing, a set hourly rate will be established for the lawyers' time as well as any other staff members times who may work on the case.  Generally, you will be invoiced separately for additional expenses such as postage, photocopying, filing fees and the like.

    Other attorneys may agree to work on a flat fee basis, sometimes calculated as a percentage of the value of the estate.  Again, there aren’t many statistics available, but anecdotally, if the trust has been funded properly, attorneys’ fees tend to range between .5% to 2% of the estate, with smaller estates being more likely to be towards the higher end of the range.

    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.

  • Are assets “frozen” during the probate process?

    Sometimes.  In certain cases, assets are somewhat “frozen” until the probate process is finished.  The issue is that the deceased’s creditors have first priority before heirs receive distributions.  And if the executor or administrator does not properly administer the estate and settle the debts and liabilities correct, he or she may be personally liable for any mismanagement. 


    North Carolina law does permit certain statutory allowances for a surviving spouse or depending children, but these allowances are relatively small in comparison to today’s cost of living.  Currently, a surviving spouse has the right to a one-time allowance of up $20,000.  Dependent children have a right to a $2,000 allowance.

    For purposes of the allowance, North Carolina defines a dependent child as any child that is under the age of 18 years (including an adopted child), or a child under the age 22 years that is a full-time student, or a child under the age of 21 years that has been declared mentally incompetent, or a child under the age of 21 years who is totally disabled, or any other child under the age of 18 years for whom the deceased or the surviving spouse served in loco parentis (meaning “in place of a parent”).

    These allowances are referred to as the “Years Allowance” and during the probate process, they take priority over creditor claims and other heirs or beneficiaries of the estate.

  • What immediate actions do we need to take after a family member dies?

    During the first few days after a loved one passes, everything seems to go by very quickly. Your priorities need to be focused on taking care of yourself and your family. The Probate and Estate Administration process can generally wait for a couple of weeks to give you time to mourn and spend time with loved ones. However, there are items that need immediate attention. In times like these, it’s helpful to have a checklist and a notebook. Here’s what’s needed:

    1. Determine whether urgent legal action is needed.

    In some circumstances, it may be necessary to file an immediate petition with the Court. If any of the following apply, make an appointment with a qualified Probate attorney as soon as possible:

    • Minor children (under age 18) who no longer have a surviving parent or guardian.
    • The deceased owned a business.
    • Anticipating a family dispute over the Estate.
    • Other circumstances that threaten to harm the Estate or other individuals if immediate legal action is not taken.

    2. Locate Estate Planning documents.

    If you know or suspect that your loved one had a Will and other legal planning done, attempt to locate these documents. Often, these will be stored with “memorial instructions” that explain, for example, what he or she wanted for a funeral and burial or cremation.

    The Estate Administration process will be much easier if the original Will can be located. If you cannot locate the original documents, try contacting the attorney the Decedent may have used, as they may have copies of the documents on file.

    If there is no Will, someone will need to be appointed by the Court as the Administrator to manage the Estate.

    We cover some things to look for in the Will and how to proceed without a Will later in this guide.

    3. Make Funeral Arrangements.

    If available, use the memorial instructions to guide arrangements for the funeral. Check to see whether there is a pre-paid funeral plan in place—often there will be a small insurance policy for this specific purpose.

    Do not use the assets of the Estate (e.g., the Decedent’s credit cards) at this point. If a loved one wishes to cover the costs of the funeral, they will be reimbursed for any out-of-pocket expenses they incur. Otherwise, we recommend asking for an extension on funeral expenses. A letter indicating that there are sufficient funds in the Estate to pay funeral costs may be required. Keep all contracts and receipts from the funeral home.

    The funeral director will order death certificates on your behalf. We recommend that you order at least 10 certified death certificates from the county, though you can order more at a later time, if needed.

    4. Secure the House and Estate Property.

    The home, vehicles, and any other personal property should be secured until the Executor and/or Trustee has been appointed.

    • Arrange for the care of any pets.
    • Store vehicles in the garage, if possible.
    • Consider changing the locks on the home.
    • Take photos of jewelry or other small valuables. Consider locking them in a safe or safe deposit box for the time being.

    Do not let family members take any property of the Estate until Probate is opened, the inventory is complete, and the Executor or Administrator has approved the distribution!

    5. Begin Collecting Important Documents.

    Estate Administration is the process of accounting for the property left after someone passes away and distributing that property to those who are legally entitled to it. To do that, you’ll need a full picture of the Decedent’s financial situation, including all assets and debts. Gather and organize any bank statements, credit card statements, deeds, titles, business documents, and any other financial documents you find or receive in the mail.

    6. Begin Making Key Contacts.

    Even if you haven’t yet been appointed as executor or trustee, there are a few important contacts that you should make as soon as possible:

    • Social Security Administration: Notify the Social Security Administration of your love one’s passing. Often the funeral home may do this for you, but it is still a good idea to follow up separately to claim the $255 death benefit and any applicable benefits if there is a surviving spouse or dependent children. You can call the Social Security Administration at 1-800-772-1213.
    • If your loved one was a veteran, contact the Veteran’s Administration as soon as possible, as your loved one may be entitled to additional benefits for funeral or burial costs. In some instances, a surviving spouse or dependent children may also be eligible for continuing benefits. You can read more about VA Memorial benefits at https://explore.va.gov/memorial-benefits
    • If your loved one was receiving a pension, call the pension administrator to notify them of your loved one’s passing.

    7. Preserve Assets and Keep Accounts Open.

    Until the Probate is opened, your primary concerns should be, 1) taking care of yourself, your surviving loved ones, and the Decedent’s memorial instructions; 2) preserving value in the Estate; and 3) keeping your options open to maximize value for the Beneficiaries. Therefore:

    • Don’t close any bank accounts or roll over any IRAs, 401(k)s, or other retirement plans. You may not have authority to do so until the Probate is opened, and there may be opportunities to preserve and protect these assets for Beneficiaries.
    • Do cancel utilities and non-essential services. If no one is living at the home, cancel services such as cable television, internet service, phone service, and any magazine and newspaper subscriptions.
    • Notify the homeowner’s insurance carrier if the home is vacant. A higher premium may be required on homes that will be vacant longer than 60 days, but the alternative is the insurance company may not cover damage incurred if they were not informed the house was vacant.
    • Notify the auto insurance carrier that any vehicles belonging to the Estate will not be driven. This may reduce the premium. However, the policy should not be cancelled until after Probate is opened and the vehicle is sold or distributed.

    Do not attempt to use the Decedent’s power of attorney to pay bills or perform any other function. Powers of attorney become void upon the death of the maker. Continuing to use a power of attorney after death could be considered as fraud.

    8. Open the Estate with the Court.

    In some cases, it may not be necessary to Probate the Estate. However, in most instances, it will be necessary for practical purposes. For example:

    • Unless the property is in a Trust, you cannot change the title to real estate without opening Probate.
    • Often, financial institutions will not discuss details of the deceased’s accounts until an Executor or Administrator has been appointed by the Court.

     

    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 many death certificates should I request from the funeral director?

    We generally recommend that you order about 10 certified death certificates. You can always order more if they are needed. The funeral director will order these on your behalf.  You are going to need them for a variety of purposes, such as for the probate court, taxing authorities, life insurance companies, banks and other purposes.  Yes, there is a small cost per certificate, but the convenience of having plenty of copies available is well worth it.

     

     

  • What are the first steps to take to take after the death of a loved one?

    Once you are ready to roll up your sleeves and start getting to work, the following tasks should be completed:

    • Locate estate planning documents
    • Look for any “memorial instructions”
    • Arrange for the care of any pets
    • Remove any plants and perishables
    • Secure the house
    • Make funeral arrangements
    • Schedule an appointment with an attorney to discuss the estate or trust settlement process
    • Don’t close any bank accounts or roll over any IRAs, 401(k)s or other retirement plans
    • Don’t drive the decedent’s car (unless you are the surviving spouse and the car was owned jointly with rights of survivorship)
    • Don’t remove any household furnishings
    • Don’t pay any of the decedent’s bills
    • Don’t use the decedent’s credit cards
    • Don’t contact life insurance companies
    • Don’t use any Power of Attorneys
    • Begin making an inventory of the deceased’s assets and liabilities and make note if any of them are time sensitive

  • Is there anything I need to do before meeting with the funeral director?

    Yes, check to see whether there is a pre-paid funeral plan in place. This is typically purchased in the form of an insurance policy. Information on a pre-paid funeral plan may be included among any “memorial instructions” found with the decedent’s estate planning documents.

  • How should I pay for the funeral expenses?

    First, be sure to carefully review the deceased’s important papers and records to determine if pre-need funeral planning has already been undertaken or if he or she owns any burial plots. 

    If there is not a pre-paid funeral in place, then there will be an issue with how to pay the funeral expenses.  Most of the funeral directors will want to see payment of the funeral expenses at the time services are rendered. 

    Frequently, a family member or other loved one will pay the costs of the funeral  and later be reimbursed from the deceased’s estate for any out of pocket expenses they incurred.

    Also, if the deceased was a veteran, he or she may be entitled to certain memorial benefits, such as a U.S. flag.  In very limited circumstances, the veteran’s benefits may also include monetary benefits.

    If you're involved in a North Carolina probate or estate administration, or if you want to make sure your own estate is protected, please call us at (919)443-3035. Ask about a free phone assessment, or contact us online. At the end of your assessment, you'll know the next steps to take, and we'll connect you with resources that can help. There is no obligation to you. The assessment is completely free.

  • Is it okay if the family meets at the house after the funeral and distributes the household furnishings?

    We do not recommend allowing anyone to remove personal property and household furnishings.  Often there are specific distributions of personal property and household furnishings in the estate plan that will need to be made before any remaining household furnishings are distributed. 


    In fact, we recommend that you consider changing the locks to the deceased’s home as quickly as possible.  You’d be surprised at some of the stories we’ve heard of family members being surprised to discover that a child or sibling entered without permission and helped themselves to various items that “the deceased would have wanted them to have.”  If you are the executor or trustee, it is your duty and obligation to ensure that the property is properly handled and distributed to the correct people at the appropriate time. 

  • Can I continue to pay bills and take care of things using a power of attorney?

    In a word—“NO”!  Powers of attorney become void upon the death of the maker. Thus, continuing to use a power of attorney after a person has died could be considered fraud.