Why Should I Make an Estate Plan?

Why should I make an Estate Plan?

Navigating Estate Planning in North Carolina: Key Considerations for Protecting Your Legacy 

Here at Triangle Legal, we understand that planning for the end of life is an uncomfortable topic for many. In fact, more than 67% of U.S. Adults lack a valid will. Failing to plan your estate, however, can have serious consequences. In North Carolina, without a proper estate plan, your assets will be distributed according to North Carolina's intestacy laws, which may not align with your personal wishes. This can lead to delays, increased costs, and even disputes among your loved ones. Additionally, without directives, important decisions about your healthcare and finances during incapacity will be left to the courts or family members, who may not know your preferences.

Estate planning is an essential step in ensuring that your assets are distributed according to your wishes, your loved ones are cared for, and potential legal conflicts are minimized. In North Carolina, as in other states, proper estate planning requires understanding state laws and the tools available to craft a comprehensive plan. 

Estate planning goes beyond simply drafting a will. A well-structured plan provides clarity, avoids probate delays, and ensures that your healthcare and financial decisions are managed if you become incapacitated.

Brief Overview of Key Components of Estate Planning in North Carolina

1. Last Will and Testament

A will is the cornerstone of any estate plan. It allows you to:

• Specify how your assets will be distributed.

• Name an executor to manage your estate.

• Appoint guardians for minor children.

Under North Carolina law, an attested will must be signed by the testator (you) and witnessed by at least two individuals to be valid.

2. Trusts

Trusts are versatile tools that can help you:

• Avoid probate;

• Protect assets from creditors;

• Provide for minor children or individuals with special need; and

• Minimize estate taxes.

Revocable Living Trusts are popular in North Carolina because they allow you to manage your assets during your lifetime and specify their distribution after your death. Unlike wills, trusts do not become part of the public record.

While both trusts and wills are critical estate planning tools, they serve different purposes. A will is a public document that becomes effective after death, primarily guiding the probate process and appointing guardians for minor children. In contrast, a trust provides privacy, takes effect immediately upon creation, and can bypass the probate process. Trusts are particularly beneficial for managing assets during your lifetime and ensuring seamless distribution after death, while wills are essential for addressing specific directives not covered by a trust. Combining both can create a comprehensive estate plan.

3. Durable Power of Attorney

A Durable Power of Attorney ensures that someone you trust can manage your financial affairs if you become incapacitated. North Carolina’s laws governing powers of attorney are detailed in the Uniform Power of Attorney Act.

4. Health Care Power of Attorney and Advance Directive for a Natural Death (“Living Will”)

 North Carolina recognizes the Health Care Power of Attorney and Living Will. These documents enable you to:

• Appoint a trusted individual to make healthcare decisions on your behalf; and

• Outline your preferences for end-of-life care, including life-sustaining treatments.

These documents help your family or designated health agent make decisions about your health in the event of incapacitation. North Carolina recognizes the statutory form for a Health Care Power of Attorney. 

5. Beneficiary Designations

You may designate beneficiaries with your accounts that you hold with third parties. This means that you can designate the ownership of the accounts to pass automatically to someone you select upon your death with your bank or investment account brokerage. Ensure that your beneficiary designations on retirement accounts, life insurance policies, and other payable-on-death accounts align with your overall estate plan. These assets pass outside of probate and directly to the named beneficiaries.

6. Estate Taxes

North Carolina does not impose a state estate or inheritance tax. However, federal estate taxes may apply if your estate exceeds the federal exemption limit, which is $13.61 million million per individual in 2024.

7. Probate Process

In North Carolina, probate is managed by the Clerk of Superior Court in the county where the deceased resided. While some assets, like jointly owned property and trust-held assets, bypass probate, a will typically requires probate to validate its terms.

Steps to Start Your Estate Plan

1. Assess Your Assets and Liabilities: Inventory all your properties, accounts, and debts.

2. Define Your Goals: Determine how you want your assets distributed, who will manage your affairs, and any special provisions you’d like to include.

3. Contact Triangle Legal: Estate planning can be complex, especially with changing laws and tax considerations. Our team can ensure your plan meets legal requirements and reflects your wishes.

4. Review and Update Regularly: Life changes such as marriage, divorce, the birth of a child, or acquiring significant assets warrant an update to your estate plan.

Conclusion

Estate Planning is one of the most important steps you can take to protect your family and legacy. Addressing these matters proactively ensures your wishes are honored and your loved ones are spared from making difficult decisions in the midst of grief. While it may be challenging to think about, proper planning provides peace of mind for both you and your family.

Here at Triangle Legal, our team can guide you through the estate planning process. Estate planning is an investment in your family’s future and peace of mind. By addressing the legal requirements and leveraging the tools available under North Carolina law, you can ensure that your legacy is preserved and your loved ones are protected. Give us a call or text at (919) 590-3647, our experienced attorneys at Triangle Legal are here to help.

This article was prepared by Triangle Legal for educational purposes only and is not intended to be a comprehensive statement of the law or legal advice. North Carolina laws change frequently and could affect the information in this article. For legal advice, you may contact an attorney at our law firm via phone/text at (919) 590-3647.