A will is a legal document that spells out exactly how you want your assets distributed when that time comes. If you have not yet created a will or another legal document that spells out how your assets are to be distributed, it’s time for you to consult a Raleigh estate planning attorney.
If you have not established a will, the courts in this state will disperse your assets according to North Carolina’s intestacy laws. Those laws may not distribute your assets in the way you wish, which is one reason why you should create a will, with an attorney’s help, as soon as possible.
A Raleigh estate planning lawyer is often asked if a person can leave a spouse out of his or her will. In North Carolina, one spouse can partially “disinherit” the other, but there are a number of restrictions. What are your options if you have been written out of your spouse’s will?
What is North Carolina’s “Elective Share” Law?
In North Carolina, you will be allowed to take an “elective” share of your spouse’s estate. It does not matter if you were happily married or if one of you had initiated a divorce procedure – you have the right to claim a portion of your spouse’s taxable estate after your spouse’s death.
Even if your spouse named someone else as a bank account, retirement account, or life insurance beneficiary, these assets are subject to the elective share law.
What Does North Carolina’s Elective Share Law Provide?
If a will does not comply with the state’s elective share law, a spouse can take legal action to claim part of a deceased spouse’s net assets equal to the portion required by law. The percentage of net assets that are available to a surviving spouse will depend on the length of the marriage:
1. If the marriage lasted fewer than five years, a surviving spouse may claim 15 percent of a deceased spouse’s net assets.
2. If the marriage lasted at least five years but fewer than ten years, a surviving spouse may claim 25 percent of a deceased spouse’s net assets.
3. If the marriage lasted at least ten years but fewer than fifteen years, a surviving spouse may claim 33 percent of a deceased spouse’s net assets.
4. For marriages that lasted fifteen or more years, a surviving spouse may claim 50 percent of a deceased spouse’s net assets.
When the surviving spouse has been only partially disinherited, the difference between what the law requires and what the surviving spouse has actually received may be transferred directly to the surviving spouse.
What is a Marital Trust and How Does It Work?
A marital or spousal trust may be created separately from your will to satisfy North Carolina’s elective share law.
A surviving spouse is entitled to receive a marital trust’s net income each year, or if the dispersion of the income is subject to a Trustee’s discretion, trust income must be dispersed when required for the maintenance, support, and health of a surviving spouse.
Who Can Be the Trustee of a Marital Trust?
The principal of a marital trust must also be made available, at the Trustee’s discretion, for a surviving spouse’s maintenance, support, and health. Additionally, the Trustee must be “non-adverse,” which means the Trustee must be either:
1. someone who may be removed as Trustee, with or without cause, by a surviving spouse
2. a bank or trust company licensed to function as a Trustee under North Carolina law
At the time of a surviving spouse’s death, any assets that remain in a marital trust may be distributed to the original decedent’s other family members without the surviving spouse’s direction or control.
Can a Spouse Waive Elective Share Rights?
Another way to handle an elective share claim is for the spouses to execute, either before or after the marriage, a mutually agreed-upon partial or complete waiver, in writing, of a spouse’s elective share rights. The waiver may be part of a prenuptial or postnuptial agreement document.
After a marriage takes place, there is little reason for a spouse to waive completely his or her elective share rights, so most waivers agreed to after a marriage are partial waivers.
No written waiver will be enforced if a surviving spouse can prove that he or she did not agree voluntarily to the waiver or was not provided with a full disclosure of the decedent’s assets and financial obligations, unless the surviving spouse waived his or her right to disclosure in writing.
Who Can Provide Sound Estate Planning Advice?
If any of this is confusing, you’re not alone. It’s confusing to almost everyone. That’s why a married person who creates a will must be advised and guided by a North Carolina estate planning attorney who will ensure that your instructions are carried out after your death.
Estate planning is essential for anyone who has a family or owns a business. The best estate planning happens when a Raleigh estate planning attorney helps you create the financial and legal documents that satisfy your wishes and needs.
What Does Good Estate Planning Require?
Good estate planning also requires making informed decisions so that in case of your death or disability, compliance with your wishes encounters little or no legal interference.
Depending on your wishes and needs, your estate plan can be based on a last will and testament or on a revocable living trust. Another part of estate planning is the development of advance directives – healthcare and financial powers-of-attorney – for situations that arise unexpectedly.
No one can know the future, but with the right estate plan, you can be prepared. Every family needs an estate plan to protect their assets and to provide instructions for dealing with unanticipated circumstances.
What is the Role of an Estate Planning Attorney?
Estate planning lawyers in North Carolina help their clients create trusts, wills, advance directives, powers-of-attorney, and any other estate planning documents they may need.
The right attorney can answer your questions about estate planning and give you the personal assurances you need. And while it’s important to begin the estate planning process now if you haven’t already, wills and trusts cannot be created in haste.
Any estate planning document requires time, thoughtful consideration, and a comprehensive knowledge of the applicable state and federal laws. The advice, insights, and guidance of the right estate planning attorney is imperative.
If you do not have a will or an estate plan, contact an estate planning attorney in the Raleigh area to learn more or to begin planning your estate now.