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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  • 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.

  • I’m worried about how the cost of a nursing home or long term care will impact my family and assets, should I be?

    Yes, it’s a valid concern.  A recent study by the University of California noted that about 70% of individuals the live to the age of 65 will wind up needing long term care during their remaining lifetimes.  And on average, women require an average of 3.7 years of care and men require an average of 2.2 years of care.  Further, it's estimated that about 20% of individuals that live to the age of 65 will wind up needing long term care for 5 years or longer!

    Currently, the average cost of nursing home care exceeds $75,000 per year in North Carolina.  Even home care or assisted living facilities can average $45,000 per year or higher.  Thus, nursing home and long term care costs can rapidly deplete one’s assets.

  • Can a child or other family member conduct planning on behalf of a parent or loved one?

    Yes.  Generally, if the parent or senior family member is competent and able, then they should be the person to undertake the planning.  However, it is common for them to have their children involved in the planning process.

    If your parent or family member is not competent or able to undertake the planning themselves, then you will need to either have a Durable Power of Attorney to act on his or her behalf or, initiate a guardianship proceeding asking a judge to appoint you as guardian of your loved ones.

    In some instances, even with a Durable Power of Attorney, a guardianship may still be required because the Durable Power of Attorney does not authorize the planning transactions proposed.

  • 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.

  • Why is it important to legally name guardians for my minor child? Can’t I just tell my family what my guardian preferences are?

    Ultimately, if you were to die while your children are still minors, the courts would name guardians for your children.  It’s important that you make your wishes clearly known by legally documenting your choice of guardian.  Only you know best what your hopes and dreams are for your children and you know your family far better than a judge.

    It’s especially critical that you nominate guardians to avoid family feuds that can be extremely stressful for your children and expensive and time consuming for the rest of the family.  It’s not uncommon that more than one grandparent, aunt, uncle, etc. will step forward petitioning to become guardian of the children. 

    Furthermore, it’s critical that your nominations be legally documented to avoid any confusion or family disputes.  One of the most egregious stories that I’ve come across was of the Barber family in California.  The Barbers were a young couple with three young boys.  During a family road trip, they were involved in a fatal car accident in which both parents died and the boys survived. 

    In the months that followed, more than one family member stepped forward petitioning to be guardian of the boys and things spiraled out of control pretty quickly with some pretty nasty accusations being made.  The court was at such a loss trying to sort things out that the boys were in foster care for months.

    Before all was said and done, the case dragged on for months, there were 9 attorneys involved and thousands of dollars spent on litigation and to this day, we still don’t know for sure what the Barbers preference would have been.

  • Should my minor child’s guardian be the same person as my child’s trustee?

    This is a common area of discussion and there are a couple of schools of thought on the subject.  Neither one is necessarily right or wrong.  Instead, as a parent, you need to take into account the various factors and your family members.

    In choosing guardians, the number one factor you should be considering is who is the best person to love and raise your child?  But while that person might be great with children, he or she might not be great with money, so it might be sense to place that responsibility with someone else that is better suited.

    Similarly, it can be prudent to separate the responsibilities.  This can create some checks and balances and ensure that guardians do not abuse their responsibility by having too much control and access over the assets as well.  Furthermore, there may be many times when the trustee might be making financial decisions for the benefit of the child that also benefit the guardian, so there is a conflict of interest. 

    For example, what if your guardian already has children and needs a larger vehicle or to add on to their home?  What about family vacations or a new computer or sending your child to summer camp?  While it can be argued that these transactions would be for the benefit of your child, the guardian would also be benefiting from them. 

    Thus, it may make sense to separate the responsibility of raising the children from the responsibility to manage their finances, or at the very least, consider naming a co-trustee to work alongside the guardian. 

  • Is the court required to follow my appointment of guardian?

    Technically, no.  This surprises many parents—what’s the point of making guardian nominations of the court is not required to follow them?  Ultimately, the courts job is to determine what is in the best interests of the child.  This means that in almost all cases, the judge will defer to your guardian nomination assuming that you knew and understood what was in the best interests of the child.  But, the law does give the judge discretion to override your nomination if he or she feels that the guardian you selected is unfit to serve as guardian.

    While at first this might frustrate you as a parent, the reality is that it’s meant to protect your child.  Let’s say, for example, that you nominated a sister to be the potential guardian of your children.  At the time you made the nomination, she was married, had a great job and was a great role model for your child.  Now a few years have passed and you are in a car accident and never updated your guardian nominations.  In the years since you chose your sister as guardian, she has lost her job, her marriage fell apart and she developed a severe alcohol problem.  If that were the case, wouldn’t you want your judge to have the discretion to override your guardian nomination?

  • If my child’s other parent and I are not together, how does that impact guardianship?

    Ideally, you should talk to your child’s other parent about the importance of naming guardians, and if possible, attempt to come to an agreement about who should raise your child if something happens to both of you. But what if you don’t feel your child’s other parent is fit to raise your child? The fact is, the child’s other parent will usually have first opportunity to be the child’s guardian if you are gone. Typically, the courts will only deprive a parent of his or her parental rights in extreme situations. However, if you have concerns about that other parent’s ability to do that, then consider writing a detailed letter explaining why you feel that the other parent is unfit to raise your child. At least your concerns will be raised to the judge who will make the final decision of selecting a guardian for your child. Bottom line, name who you want to have as guardian for your child, even if it’s not the other parent.

  • What should I do if there is a certain family member that I do not want trying to get custody of our children (and their money)?

    You can’t choose your family.  If there is someone that you know you would never want raising your children, then we can help you clearly document then using a confidential exclusion of guardians.  The person doesn’t have to know today that they’ve been excluded.  But if they ever do try to challenge your guardian nominations, it’s one more tool in the arsenal that we can bring forward to a judge to clearly make your intentions known and why you felt the individual was not a suitable candidate to serve as guardian.

  • What is a Children’s Safeguard Plan?

    If you’ve been reading through our Frequently Asked Questions, you’ve probably gathered that there are a lot of common mistakes made by parents of young children when it comes to their estate planning.  It’s also been our experience that most estate plans don’t really adequate address the unique concerns of young parents.  So we’ve assembled a collection of tools to fill in the gap.

    First, we make sure you don’t fall victim to some of the common mistakes that parents make when choosing guardians. 

    Second, we make sure we have nominated emergency guardians and authorized them to make medical decisions for your children in a time of crisis. 

    Third, we supplement this by providing you tools to leave some detailed guidance about how you would actually want your children raised—your parenting style, values, hopes and dreams for your children.

    Finally, there are a couple of additional tools that round things out such as guidance on creating a family emergency plan.