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

Jackie Bedard
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Attorney, Author, and Founder of Carolina Family Estate Planning