It is not easy to think about estate planning, though it is important for most adults to make sure that their affairs are in order in case sudden tragedy strikes. Planning helps loved ones avoid painful legal battles and helps ensure that your wishes are followed. Most states have similar laws, though North Carolina differs in some details.
Planning often begins with a will that spells out how you want estate assets divided. If you are a parent, your will can establish custody of minor children. You will need to identify a personal representative, or executor, in your will who will ensure that debts are paid and assets are distributed. North Carolina wills can be typed, handwritten, or oral, though the latter two forms take longer to be established as valid. Typed or oral wills require two witnesses. Having an estate planning attorney review the will can ensure that it is in proper order.
Probate is the legal process that ensures the estate's debts are paid before assets are divided. Probate is not required in North Carolina if there are no assets, though heirs sometimes will open a case anyway to make sure that all debts are paid. Estates valued at less than $20,000 can go through an expedited process. You also can avoid probate by taking steps such as creating trusts, property transfers, and joint ownership while you are alive.
Power of Attorney
Granting someone power of attorney allows that person to take care of your affairs if you cannot. The document can be narrow, limiting powers to routine finances, or broad, allowing assets to be bought or sold. Either way, you should make sure that the person you appoint is aware of your general wishes.
Health Care Issues
Advance directives set up procedures for making health-care decisions if you are unable to speak for yourself. In North Carolina, you can create two types of advance directives: A living will that spells out what type of lifesaving or extending measures you agree to and a medical power of attorney designating a health-care agent to make decisions for you if you are incapacitated.
Whether you want to be buried, cremated, donate your body to science, or something else entirely, you should spell out those wishes in your will or in a letter of final instructions. If you want to be an organ donor, register and make sure loved ones are aware of your decision. Paying for final services in advance can be convenient for loved ones but prepaid funeral plans have not always covered costs after inflation. North Carolina has laws that spell out how these plans must be set up and what must be done with the money.
Federal estate taxes come into play only for estates worth more than $5.25 million in 2013. This means most people will not have to worry about this. All business owners, no matter how small the enterprise, should create a succession plan that will keep things running smoothly after your death. If your spouse or children would struggle financially after your death, consider a life insurance policy to help replace the lost income. Other items to think about: How will your beloved pets be cared for? Do you want to leave money to a favorite charity or college?
This article is a broad look at issues to consider when planning your estate. Consult a North Carolina estate planning attorney for questions about your specific situation.