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.
  • Page 9
  • 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.

  • Do I Need a Trust for My Minor Children?

    Without proper planning, the default for your children is that the courts will name a financial guardian to manage the assets and accounts on behalf of your children while they are minors and then the accounts will be turned over to your children on their 18th birthday.  Outright.  No strings attached.  Does that seem like a good idea to you?  Most parents don’t think so. 

    Take Control of Your Children's Financial Future

    First, establishing a trust puts you in control—rather than a judge that doesn't know you and your family. A judge may not understand the nuances of your family dynamics, nor your wishes as a parent. With a trust, you get to decide who you feel would be equipped to manage your children's inheritance while they are underage. If you are divorced, this is especially important—do you really want your ex managing the assets?

    A trust also provides greater ease and privacy upon death.  A living trust plan will permit your family to avoid the time-consuming and expensive probate process and ensure that funds are more readily available for your children’s care.  In addition, probate is a matter of public record—meaning that any nosy person or opportunist can review the court records and see what you owned and who is receiving it—leaving your financially immature children as sitting ducks for scammers.

    Establish Guardrails to Protect Your Children

    You can also specify the terms for how you want your children to receive things, how the trust funds should be used, and how much access and control you want your children to have.  So, for example, you can specify that you don’t want your children to have access to the funds until age 21, 25, 30, or older.  While they are under the specified age, the trustee you named will manage the accounts on the child’s behalf and can spend them for the child’s benefit—such as paying for care and educational expenses.

    Protect Your Children from Future Lawsuits, Creditors, or Divorce

    Depending on the design of trust, you can protect your children’s assets.  By leaving the assets to your child in an asset protection trust, you can protect your children's inheritance from their future potential lawsuits, creditors, bankruptcy, and divorce. As your children become older and more mature, you can determine how much direct access and control you wish them to have over the trust. Now, if your children are quite young, this may seem too far off to think about, but consider that if you do pass away prematurely it may be all the more important to protect your children's future financial security. Clients often ask whether they can just leave it up to their children to protect their own assets, but due to how the trust and asset protection laws work, you are able to provide your children with better asset protection than they could create for themselves.

    Protect Your Children from Accidental Disinheritance

    Finally, a trust-based plan can protect your children if your surviving spouse ever remarries so your children are not accidentally disinherited.  Here's an example of how accidental disinheritance happens:

    Bob and Mary are married. Bob has two children from his first marriage. Bob and Mary have one child together. Having been married a long time, Bob and Mary have the majority of their assets titled jointly and their estate planning documents provide that when the first spouse dies, everything will pass to the surviving spouse, and then when the surviving spouse dies, the estate is to be divided equally between the collective 3 children.

    When Bob dies, everything passes to Mary. Several years later, Mary remarries. She and her new husband, John begin building a life together. Ten years later, Mary dies. Due to a variety of factors regarding how Mary handled the assets during the marriage, marital rights, and such, a majority of Mary’s estate passes to John. John has no obligation to leave anything to Bob and Mary's children, and therefore they are “accidentally” disinherited.

    With the proper trust provisions, Bob and Mary could have avoided this situation and ensured that the children could not be disinherited this way.

    Give Your Family the Gift of Protection and Peace of Mind

    Don’t leave your children unprotected. Give yourself and your family peace of mind that they will be protected and cared for in the event of a tragedy. Contact us online or call our office at 919-443-3035 to get started or read more about estate planning to protect minor children in our Children’s Safeguard Planning Guide.

     

  • How can I protect my children's inheritance from lawsuits, creditors, bankruptcy and divorce?

    Did you know that it’s relative easy for you to leave your assets to your children so that they are protected from future lawsuits, creditors, bankruptcy and divorce? 


    For example, let’s say one day your child causes a bad car accident in which a person is left permanently disabled.  A few months later, a lawsuit is filed against your child for hundreds of thousands of dollars—your child’s entire inheritance. 

    Or, maybe your child receives his inheritance at age 25 and he or she is married.  A year or so later, the marriage is in shambles and his wife files for divorce and walks out the door with half of everything—including your son’s inheritance.

    Wouldn’t you feel better knowing that when that lawsuit or divorce came along, your child’s inheritance would be protected from it?  This is something we can accomplish with appropriate trust planning provisions.