Every adult should have an estate plan, even younger adults. North Carolina inheritance law can have unexpected consequences for people who do not have an estate plan in place, consequences which may not reflect the deceased person’s wishes regarding his or her spouse and children. Here are the benefits of having an estate plan that everyone, including young couples, should consider:
Ensuring Your Spouse Gets All of Your Estate
Under North Carolina law, if a spouse does not have a will, the surviving spouse may not receive all the deceased spouse’s property depending on the amount and kind of property owned by the deceased spouse in his or her sole name. If the deceased spouse has children, then the children may get a share, which will result in additional complications if they are minors. If the deceased spouse does not have children but has living parents, the parents may get a share. If you want to make sure your spouse receives your entire estate, you should have a will giving your spouse everything and also have beneficiary designations, joint with right survivorship ownership, and tenants by the entireties ownership (where applicable) in favor of your spouse. You can also have a living trust that names your spouse as a beneficiary.
Nominating a Guardian for Minor Children
If a couple has minor children, and both parents pass away, the state will appoint a guardian to manage any minor child’s person and property until he or she turns eighteen. You have some input over this process by nominating a guardian or guardians in your will to take care of your child if both parents pass way. While the clerk of court ultimately decides who the guardian will be, the clerk will give a strong preference to individuals named as guardians in the parents’ wills.
Creating a Trust for Children
While a guardian can manage a minor child’s property, a more flexible way to manage a child’s property is to put the property in a trust, either in your will (called a testamentary trust) or in a living trust. With a trust for children, you can determine the conditions when it is distributed, and you can also set the age when all the property is distributed to the child higher than eighteen. The trust will be managed by a trustee or trustees which you can appoint without clerk approval or supervision.
Managing Financial Assets When Incapacitated
Another consideration is giving your spouse or someone else the authority to manage assets owned in your name when incapacitated and vice versa, such as if one of you is debilitated in a major accident. A spouse can apply to be the guardian of their incapacitated spouse, but having other documents already in place before the spouse is incapacitated can allow the spouse to take action more swiftly. A durable general/financial power of attorney can allow your spouse (or anyone else of your choosing) to manage financial assets still in your name when you are incapacitated. You can also use a living trust to manage your assets while incapacitated by putting your assets in the trust and having your spouse or someone else serve as trustee if you are incapacitated.
How I Can Help
If you need estate planning advice and document preparation, please contact me at 252-497-2408 or info@jonrountreelaw.com.