Charlotte Estate Planning Blog

Choosing trustees

People in North Carolina should give careful consideration when selecting a trustee option. In many cases, it may be necessary to look outside of one's own family to choose the right person to handle complicated estate matters or to have someone within a reasonable distance who can fulfill the duties appropriately.

It may also be beneficial to look outside one's immediate family if there is conflict between children. The burden that comes with being a successor trustee or co-trustee can be difficult to handle even in the best of circumstances.

How to make the role of executor easier to handle

If a North Carolina resident is named the executor of an estate, that person is responsible for overseeing and protecting an estate's assets throughout the probate process. While the job may seem overwhelming, it may be possible to do it properly by staying organized. An important step in settling an estate's affairs is to obtain a death certificate. Typically, multiple copies will be needed, and executors should order more than they think will be needed.

The next step is to locate will or trust documents that the deceased may have created. Ideally, the deceased individual would have mentioned where they were located while alive. Once they are collected, it may be necessary to file letters testamentary to show that an individual has the legal authority to manage the estate. It is also possible that the deceased put assets into a trust, which may mean that probate is not necessary.

Estate planning for everyone

Estate planning is something every North Carolina resident should do regardless of how much money they have or how old they are. If individuals have no legal provisions in place when they die, a variety of fees and court costs can be assessed on any money and other assets that may have been meant for a loved one.

The first part of estate planning is determining who will receive the proceeds of any life insurance policies and retirement accounts. The beneficiary designations should be periodically reviewed, especially after certain life changes, so that a payout is not distributed to an unintended ex-spouse.

Setting up a guardianship for your special needs child

If you have a loved one with special needs, you know that it can be financially, physically and emotionally challenging to provide care. You work hard to provide the support he or she needs, but it is prudent to think about his or her care beyond your lifetime. It is possible that your family member could outlive you, and it is smart to have the necessary legal protections in place to ensure that he or she continues to get the care needed.

There are many ways that North Carolina families can plan for the care of a loved one with special needs. One of these is to set up a guardianship, which allows one person to make decisions on behalf of the ward. There are many situations that could necessitate this step. If you are caring for an adult with special needs or your child has certain disabilities, it is prudent to take the appropriate estate planning steps to put necessary protections in place.

Estate planning is emotional as well as financial

For people in North Carolina, preparing for the future includes an estate plan. Estate planning helps to ease the life of heirs and make a family's emotional pain after the death of a loved one far less complicated, as the distribution of assets is provided for through the use of instruments such as wills, trusts and insurance. However, estate planning isn't only a financial issue that can be used to pass down real and personal property. The estate planning process can also be a time to transfer memories, thoughts and values from elders to their surviving loved ones.

The process of drawing up a will and executing trusts can lead people going through estate planning to think about the scope of their lives and the values they hold most dear. Intangible aspects of life, including memories, stories and experiences that were never shared with one's children, can also be a part of one's property. Going through the process can inspire people to spend more time with their children and other loved ones.

Estate planning and tax liability

North Carolina residents who leave property to their loved ones may not realize how taxes can affect beneficiaries when they inherit an estate. South Dakota Congresswoman Kristi Noem has come forward to warn others about how the federal government's "death tax" has affected her family. However, according to some experts, it is possible that the problem could have been avoided with a different estate planning strategy.

The will bequeathing ranch land to her family was created in 1974 and was never updated between 1981 and 1994. According to one tax expert who reviewed probate records released to a statewide database, had the will been modified in 1994 based on the law in effect at the time, the family could have possibly avoided any estate tax liability. If the will had been modified under current law, the family would likely have no liability whatsoever.

Digital assets as part of an estate plan

North Carolina residents should incorporate digital asset planning as part of their overall estate plan. This may make it easier for others to clean out, shut down or otherwise manage email accounts, bank accounts and other online properties. In some states such as North Carolina, access to electronic accounts may be governed by the Revised Uniform Fiduciary Access to Digital Assets Act, or RUFADAA. This generally allows a designated party to access electronic accounts stored in a computer, phone or cloud network.

Without designating an authorized party under the RUFADAA, it may be impossible to access an account even if the username and password is known. As with financial or other property, it may be possible to designate a beneficiary who will receive digital assets. It may also be possible to give someone permission to delete or destroy certain digital property like a photo album.

An addicted child can complicate your estate plan

Every day, 142 people in the United States die from drug overdoses. This may be your greatest fear if you have an adult child who struggles with opioid addiction. The opioid crisis is so widespread that many refer to it as an epidemic.

As you grow older, you may find it more and more difficult to make any plans for the future because of the uncertainty within your family. Family gatherings, vacations and retirement plans may be fraught with tension or go by the wayside altogether. You may also be wrestling with the choices you have for estate planning in light of the complication that one of your heirs has a drug addiction.

Cy Pres doctrine allows charitable trusts to adapt and continue

When people in North Carolina choose to form a charitable trust, they might want them to serve their purpose in perpetuity. Unlike other trusts, a charitable trust has the option of continuing its mission indefinitely. This open-ended feature on some charitable trusts, however, could result in the trust outliving the existence of its beneficiary. An educational institution closing its doors represents an example of a beneficiary ceasing to exist. In this situation, the Cy Pres doctrine sanctions the alteration of the trust so that it can continue.

Only a court can update the terms of a charitable trust under these circumstances. Otherwise, the trust simply fails. The Cy Pres doctrine, however, grants courts the ability to modify the original purpose of the trust and redirect distributions to a new beneficiary. Because charitable trusts specifically define the purpose of their charitable giving, courts would select a new purpose similar to the original intent of the trust.

The importance of keeping beneficiary designations current

People in North Carolina who are creating an estate plan should make sure they remember to include beneficiary designations. These are the individuals who receive assets such as retirement accounts and life insurance policies, which do not have to go through probate. Since beneficiary designations are separate from the documents that people often think about when planning their estates, such as wills and trusts, it is not uncommon that they often are forgotten.

Even financial professionals may forget about this crucial aspect of estate planning. One woman who advised others about beneficiary designations and other estate planning strategies in her professional life discovered only after moving an IRA that she had not changed her beneficiary for many years. When she had young children, she divorced her husband. She then appointed her father as the beneficiary on her IRA so that he would be able to take care of her children if she died. However, it was only years after her children were grown and her father had remarried that she discovered she had never changed that designation.

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