It’s surprising how many people with a lot of wealth die with no estate plan, not even a simple will.
Still, stories of how a famous entertainer, or some other wealthy American, left no estate plan will make the national headlines occasionally.
Wealthy residents of the Charlotte area may put off estate planning for the same reasons other people do. No one really want to think about his or her own death, and estate planning can involve an upfront investment in both time and money.
With no plan, North Carolina law dictates how property gets distributed
As is the case with other states, North Carolina has laws which determine how property will be distributed in the absence of an estate plan. These are often called laws of intestate succession.
These laws apply only to a person’s probate estate. Property in a trust, retirement accounts and proceeds from life insurance pass to beneficiaries outside of the probate process. But this is only true insofar as these documents have been correctly set up and beneficiaries properly named.
Likewise, certain jointly held real estate and other property may include what are called survivorship rights. A person with survivorship rights will automatically receive the property in question after his or her co-owner dies.
Spouses, children get favorable treatment
When there is no plan for the probate estate, a person’s surviving spouse and children receive the most favorable treatment.
Assuming a North Carolina resident dies with 2 children, for example, the spouse will get one-third of the land held in the probate estate. The spouse is also guaranteed the first $60,000 worth of personal property as well as one-third of any remaining balance.
The idea is that the person’s children, or the children’s direct descendants, will get the rest of the property.
When a person has fewer than 2 children, the surviving spouse is entitled to more of the probate estate. He or she will take the entire estate if the person dies with no children and no surviving parents.
While this is an overview, intestate succession can be complicated and confusing. This is one reason why it is best for people to avoid this outcome, especially if they want greater control over what happens to their wealth when they die.