Estate Planning and Probate

Planning is priceless.

Our clients have a range of income levels, property, assets and family circumstances. Specific needs vary with each estate, yet our clients’ concerns are the same: they want to make good decisions regarding the distribution of their property and assets, rather than letting the default provisions of the law control what happens to their assets when they die.

All of us who participate in these engagements – attorneys, paralegals and staff – do so with empathy and compassion. Our role is to help clients have a clear understanding of the process as we prepare and execute directives on your behalf regarding your healthcare, real estate and assets. Whether you are interested in a simple will or a more complex plan, including trusts, we have the knowledge and experience to help.

I sincerely appreciate your detail and expedience of the matter to which I needed. The staff was courteous and cordial. The respect and sensitivity to my issues were evident. I truly appreciate the speed, hard work, and time put in by yourselves.

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When an individual passes away in North Carolina, a probate proceeding is initiated to determine the distribution of the individual’s property. The validity of the person’s will is confirmed (if there is one) and the executor named in the will is formally appointed. If there is no will an administrator is named to manage the assets in the deceased’s name at the time of death. The probate process empowers the executor or administrator to be responsible for carrying out the final wishes of the decedent.

Executors are expected to follow the applicable North Carolina laws when making distributions. Throughout this process, the executor must also keep detailed transaction records for accounting purposes.

Some of their duties during this process include:

  • Payment of decedent’s debts and taxes
  • Identifying the heirs of the decedent
  • Distributing property owned by the decedent
  • Collecting, inventorying and accounting for the decedent’s assets

A financial power of attorney is a legal document by which you can authorize someone to act on your behalf whether that be making important financial decisions, selling assets or settling debts. This person is called an attorney-in-fact, although the person you designate does not have to be an attorney as the name might suggest.

Even though an attorney-in-fact is legally obligated to act in your best interest, you should appoint someone who knows you and your life situation well and whom you trust. If you are married, your spouse is usually a good choice with a second person named in case your spouse is unable to serve.

A broad power of attorney document can authorize your attorney-in-fact to perform any action with regard to your property that you yourself could perform. The power can become effective immediately and endure beyond your incapacity, which is known as a durable power of attorney, or it can become effective only if you become incapacitated. The durable power of attorney document is useful for designating another person to make financial decisions for you in the event you become mentally or physically disabled. Further, it can help avoid a legal declaration of incapacity and the court appointment of a guardian.

A guardianship may be necessary if an individual loses the ability to manage his or her own affairs due to a mental or physical disability. Guardianship is a court-supervised process through which a guardian is appointed to an incapacitated individual. The proceeding is commenced by filing a verified petition with the North Carolina Clerk of Superior Court.

A guardian must always ensure the best interests of the incapacitated person by being loyal to him or her. Moreover, if possible, the guardian should try to include the incapacitated person in decision making and, if feeling overwhelmed, remember that alternatives to guardianship exist.

If the Clerk determines a guardian is necessary, he/she will decide which type of guardianship is appropriate. In North Carolina, there are three types:

  • Guardian of the estate: appointed for the purpose of managing the incapacitated individual’s property.
  • Guardian of the person: has the authority to perform duties relating to medical care and custody
  • General guardian: a guardian of both the person and their estate.

A life insurance trust is an estate planning device that allows you to create an irrevocable trust with the main purpose being for the trust to own life insurance on your life. The trust is irrevocable, and its terms cannot be changed once it is established. Because you are not the owner of the policy, when you die, the proceeds from the life insurance do not count in your taxable estate and can be distributed to your loved ones without taxes being owed.

Since the proceeds from the policy replace the money that would be paid from your estate for estate taxes, this trust is sometimes referred to as a wealth replacement trust. The trust has administrative requirements during your lifetime and a trustee must be appointed to handle the premium payments. The hassle of those requirements are often outweighed by the tax savings.

A living trust is a legal document established during your lifetime for the purpose of managing your estate. Similar to a will, when properly drafted living trusts have several advantages including tax benefits and the avoidance of probate. A living will is also usefully for maintaining privacy as it circumvents the probate process and therefore is not part of the public record. A revocable living trust can be modified as necessary or completely revoked.

Typically, the grantor, the individual creating the trust, also functions as the initial trustee during their lifetime. In the event you become incapacitated, your living trust can designate a successor trustee to help manage your assets for your benefit. At death, the successor trustee will administer the trust per your instructions outlined in the document.

Since a living trust avoids probate administration, the expense of estate administration and court costs can be minimized. Further, unlike a will, the administration of a living trust by your successor trustee is not supervised by the court. This will save your loved ones the expense and time related to estate administration.

If you have minor children, your living trust can be prepared to provide for them at a specific age or to distribute their share of the estate when they are deemed mature by the trustee.

When you have a loved one with a disability, proper planning for their care is essential. A special needs trust is a planning tool that allows for families to ensure their loved one will receive the care he or she requires.

Generally, the main goal of a special needs trust is to maintain a special needs individual’s eligibility for means-tested government assistance, including Medicaid and Supplemental Security Income (SSI). Anyone with loved ones on these programs knows how important it is that they maintain their eligibility. If a special needs person has too many assets, they will be unable to qualify for the benefits.

Special needs trusts come in two different types – First Party and Third Party trusts. The main difference between the two is who is funding the trust. With a First Party Special Needs Trust, the special needs individual’s own assets are the funding the trust. In contrast, someone else’s assets are used when funding a Third Party Special Needs Trust.

A properly drafted Special Needs Trust allows a trustee to carry out the purpose of the trust and make sure proper administration is followed. The trustee should have a good awareness of governmental benefits and what types of purchases are allowed under the programs. Typically, a trustee will use the funds in the trust to pay for services for the beneficiary, including, but not limited to, education, caregiving and medical services.

As North Carolina is increasingly popular as a retirement destination, we have seen an increase in estate and trust-related litigation over the past decade. Legal disputes related to wills, estates and trusts must be handled with tact, empathy and forthrightness. Our estate and litigation attorneys collaborate to provide efficient and effective representation in these matters and are deeply experienced in litigating disputes over guardianships and conservatorships, disagreements over power of attorney, joint bank accounts, beneficiary designations and living wills. Whether you’re a trustee or a beneficiary, if you face a controversy regarding the distribution of an estate our team of attorneys will work to protect your rights.

BHSPA attorneys stand ready to assist you in circumstances which include:

  • Will caveats and contests
  • Probate abuse / fraud
  • Probate accountings
  • Breach of fiduciary duties
  • Power of attorney abuse / fraud
  • Personal representative abuse / fraud
  • Removal of personal representatives
  • Guardians and guardianships
  • Conservators and conservatorships
  • Joint bank account litigation
  • Trust litigation

A last will and testament is just one aspect of a comprehensive estate plan that might also include the naming of a financial power of attorney, the establishment of trusts and a healthcare proxy. A will is a legal document that expresses a person’s binding decisions concerning the disposition of assets owned in his or her name alone at the time of death. The document also states your preference for who will manage the distribution of your assets. Additionally, your will can nominate a guardian for any minor children who survive without a legal parent to care for them. If you do not name your preference for guardian, the courts are legally obligated to determine the appropriate guardian.

A properly drafted will is a binding legal document that gives you and your family peace of mind and predictability in the event of your death. Alternatively, if an individual passes away in North Carolina without a will, state laws will dictate how your assets are distributed. In these cases, people are said to have died intestate.

A codicil is an amendment, or supplement, to a will. Rather than drafting a new will, a modification is made to an existing section or article of a previously valid will. The procedure for signing and executing a codicil is the same as a will. After the codicil has been signed and properly completed in accordance with state law, it stands as a separate legal document which adds to, omits from, or otherwise alters the will.

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