Estate planning is much more than creating a will. In North Carolina, the best estate planning is conducted when a Raleigh estate planning attorney works with you to create the detailed legal and financial documents that clearly express your instructions and desires.
One of the most important parts of estate planning is determining how to divide and distribute your property and assets when that time comes. The people with the right to inherit are called “heirs,” but what if you do not have a spouse, children or any other obvious heirs?
North Carolina estate planning lawyers come across such situations frequently. Clients without spouses or children are often unsure what they should do with the property and assets that they will leave behind, and that can make estate planning somewhat difficult.
What Does It Mean to Die Intestate?
Many people who do not have heirs avoid estate planning entirely, but if you die with no will or estate plan – that is, if you die “intestate” – you will have no say over what happens to your property and assets after your death.
Putting your assets in the right hands also includes naming beneficiaries for assets such as your 401(k) plan, bank accounts, and life insurance policy – assets that are not dealt with in the probate process.
Moreover, if you leave behind no will, a North Carolina probate court will divide your estate’s assets and property based on the state’s intestate succession laws, and the court may designate someone you do not even know as an administrator to manage your estate.
What is Probate and How Does the Probate Process Work?
Probate is the legal process that inventories and evaluates an estate’s property and assets, pays the estate’s taxes and outstanding debts, and distributes the remainder of the estate according to the deceased person’s will (if that person left a will) or according to North Carolina probate laws.
There are several good reasons to take steps to avoid probate. The probate process can tie up property and assets for months or even longer than a year. Probate can also be quite costly, and those legal expenses can substantially reduce an estate’s value.
The most straightforward way to avoid probate is to create a living trust with an estate planning lawyer’s help. The property and assets that you transfer into a living trust will not be part of your probatable estate at the time of your death.
If You Have No Heirs, Who Should Inherit Your Assets?
When someone has no heirs, that person’s estate planning attorney may encourage the person to determine what he or she is passionate about and name one or more appropriate charities to receive the estate’s properties and assets.
In fact, almost anyone can be named to inherit your properties and assets – except for the attorney who drafts your will or estate plan – and it is always preferable to designate an heir yourself instead of allowing a probate court to do that for you.
You may name any legitimate charity you choose. Many estate planning clients with no heirs want to start their charitable giving while they are still here to see the benefits. These clients have options that include creating a charitable remainder trust or a private foundation.
What is a Charitable Remainder Trust?
After thoughtful consultation with your Raleigh estate planning attorney, if you decide to create a charitable remainder trust, your attorney can help you create it and will guide you through these steps:
1. Verify that the charity of your choice is approved by the Internal Revenue Service.
2. Transfer the assets you are giving to the charity into your charitable remainder trust.
3. Appoint the charity as trustee of your charitable remainder trust.
These steps will put the charity in charge of managing or investing the property and assets in the trust.
How Does a Private Foundation Work?
Unlike a charity, a private foundation usually offers donations, called grants, to other charities, and it typically does not engage in its own charitable operations. Private foundations may make grants to fund a charity’s general operating costs or to fund a particular charitable program.
A private foundation is usually created by an individual or a family with a tax-deductible gift. The foundation is then overseen by a board of trustees or directors. The trustees or directors may be paid for their work, and they control the foundation’s properties and assets.
After you make your choices with the guidance of a Raleigh estate planning lawyer, you will only need to review your estate plan every three to five years unless there are major changes in your life or if your relationships with the chosen charities or individuals have changed.
When Should You Start Planning Your Estate?
No one knows what tomorrow may bring, so the time to start planning your estate is now. The best estate planning takes time, work, and thoughtful consideration, but having a good estate plan is preferable to having no plan at all.
Establishing the right estate plan gives you control over your estate that you would not otherwise have, and a good estate planning attorney can make the process easier.
What Else is Part of a Good Estate Plan?
If you have no heirs, along with specifying what will happen to your property and assets at the time of your death, your estate plan should also name someone to make important decisions on your behalf in the event that you become incapacitated.
Your attorney can help you to create:
1. A durable power of attorney for finances: This is a legal document that authorizes a person you name to manage your legal and financial affairs should you become incapable of managing those affairs yourself.
2. A durable power of attorney for healthcare: This is a legal document that authorizes a person you name to make medical decisions on your behalf should you become incapable of making those decisions yourself.
3. A living will: This is a legal document which spells out which life-prolonging medical treatments you prefer and do not prefer to receive when you become unable to express those preferences.
Why is an Estate Planning Lawyer’s Help Essential?
Estate planning really is for everyone, but the laws that govern probate, inheritance, and estate planning are designed to cover a wide variety of people and situations. That makes these laws lengthy, complicated, and difficult for even the most intelligent person to read and understand.
However, a good North Carolina estate planning attorney will be able to offer you sound and reliable guidance that reduces your estate taxes, ensures that your instructions are followed when that time comes, and achieves full compliance with North Carolina state law.