Estate Planning & Administration

Estate Planning & Administration

Introduction If you ve been putting off creating an estate plan, then you re missing out on a chance to get some peace of mind. Many of our clients tell us that they feel much better after implementing an estate plan. They feel happy because they know that no matter what happens, their loved ones will be taken care of. At King Law, we help clients with basic estate planning issues such as drafting a will or a power of attorney. We also handle more complex issues, including creating trusts to avoid probate or control how your heirs use an asset after you re gone. The good news is that many people can benefit from a simple estate plan. Your first priority should be to get a few important documents in place, which we discuss in detail later in this estate planning guide. We think you ll feel a lot better once you know you have a basic estate plan to protect your family. We discuss some of the estate planning strategies everyone can use along with some more advanced estate planning strategies in the following sections of this ebook. You ll get a good idea of what you need to do to get started with your estate plan. Once you ve learned a little bit about estate planning, you may want to contact us for a consultation. Call us at (888) 748-KING or fill out our contact form to set up your initial consultation with one of our estate planning attorneys. 2 Estate Planning and Administration

The Estate Planning Documents Everyone Should Have There are four documents that everyone should have in their estate plan. These documents are just a starting point, but they can also be very powerful. They can protect your family and avoid a lot of potential legal complications. The Four Documents You Need: Completing these four documents is a great first step when making your estate plan. Each of these documents has a specific legal purpose. Simple Will If you pass away, your will states who will receive your property. North Carolina law will determine who receives your property if you pass away without a valid will. You must comply with certain legal requirements in order to create a valid last will and testament. North Carolina law requires that you sign the will in front of two witnesses and that the witnesses also sign the will. A simple will Healthcare power of attorney General durable power of attorney Living will G H L You can also name a guardian for your minor children in your will. This gives you control over who will care for your children if something happens to you. If you don t name a guardian, a court will end up making this decision. Another important provision in your will is your choice of executor. The executor is the person who administers your estate. They will need to locate your assets, notify your creditors of their right to make claims, and distribute your property according to the terms of your will. You can choose a family member or a professional as your executor. Many people only need a simple will that names their spouse or children as heirs. If you d prefer to leave property to another relative or friend, you may need to create a complex will with the help of your estate planning attorney. General Durable Power of Attorney If you are involved in an accident and become incapacitated, a durable power of attorney lets someone else manage your finances. You may give your agent the power to transfer your assets, deal with the IRS on your behalf, make gifts, or modify your existing trusts. Without a durable power of attorney, your family may not be able to access your accounts or make financial decisions on your behalf. They would need to go to court to seek a guardianship appointment, which can be a costly and time-consuming procedure. You can limit your agent s powers or give them the power to do anything you could do yourself. Choose someone you trust to manage your finances and make smart decisions. www.kinglawoffices.com 3

Healthcare Power of Attorney A healthcare power of attorney gives a loved one control of your medical decisions. Your healthcare agent can decide whether to accept or refuse treatment if you are incapacitated or unable to communicate your wishes. Your healthcare agent may have to make life-and-death decisions on your behalf. You should talk to this person about your priorities so they can attempt to carry out your wishes regarding medical treatment. You can limit the decisions your healthcare agent can make or give them the power to make any medical decision for you. They will also be required to follow the wishes stated in your living will. Living Will Your living will states your wishes regarding certain medical treatments, such as whether you wish to remain alive on life support in certain situations. This document takes the stress off your family of having to make these decisions and can prevent inter-family disputes. You may decide that you do not wish to be kept alive on life support if a doctor has determined that your condition has no chance of improving. Your living will gives the doctor instructions on what to do in these situations. You should have both a living will and a healthcare power of attorney because you can t predict every type of medical decision that may come up. Your living will covers decisions you have thought about and decided, but your healthcare power of attorney will make decisions that you had not anticipated. We believe that everyone should have at least these four documents as part of their estate plan. If you are married or have children, it s even more important that you have these estate planning documents created. 4 Estate Planning and Administration

If you don t have a lot of assets or complex estate planning goals, these documents may be all you need. We offer a package of services that includes all of these documents, along with guardianship provisions if you have minor children. Our Essential Plan Package makes sure your bases are covered and your family is protected. If you need a little extra planning or protection, we offer two other estate planning packages that include extra documents and updates. These packages are a great way to take care of all of your estate planning needs in a quick and cost-effective manner. How to Protect Property Using a Trust When you own property, you can do whatever you please with it. You can use it, sell it, or even let it go to waste because it s your property. Say you want to leave property to someone, but you re not sure that this person is mature enough to own the property yet. You want to create some rules for how they use the property to make sure they don t waste it. This is a great situation to use a trust. For example, think about your children s toys. Your kids probably think they own the toys, but you may set some restrictions on how they can use them. They may only be able to play with the toys after doing their chores or homework. A trust operates in a similar fashion. It s like attaching a set of instructions to a piece of property. If you want to leave property to a minor child, you can use a trust to make sure they don t waste the property. You might create a trust that says the property can only be used for the child s college education expenses. A person in charge of managing the trust called a trustee has to follow the instructions you ve created. If there are funds left over in the trust, you may decide that the child can use them however they wish once they ve reached age 25. You would include this provision in the trust documents. Once the child reaches age 25, they would receive the property outright. They could use the property how they wished. That s one simplified example of when a trust can be a good tool. There are many other situations where a trust can be helpful. Revocable Living Trusts Another commonly used estate planning tool is a revocable living trust (RLT). Some common reasons to establish an RLT include the following: 1. Organization of a person s financial affairs prior to his or her death. 2. Continued management of a person s assets in the event of his or her incapacity (i.e., a similar function to the Durable Power of Attorney). 3. Bridging the gap between a person s incapacity and estate administration after his or her death. 4. Avoidance of some of the problems associated with probate of wills and administration of estates. www.kinglawoffices.com 5

Avoiding probate is a big reason people use an RLT. An RLT avoids probate because your property is owned by the trust, so technically there s nothing for the probate courts to administer. Your successor trustee will gain control of your assets and distribute them exactly according to your instructions. A will doesn t take effect until your death, and is therefore no help to you during lifetime planning, an increasingly important consideration since Americans are now living longer. An RLT can help you preserve and increase your estate while you re alive, and offers protection should you become mentally disabled. There so many other types of trusts to consider gun trusts, pet trusts, special needs trusts, and life insurance trusts, to name a few. The important thing when using a trust is that it matches your estate planning goals. What to Expect During the Probate Process Probate is also known as estate administration. It is essentially a court process after a person s death that determines how the person s probate assets will be distributed. Probate is the public process of: Filing and validating a will in court Paying all the debts and taxes of the deceased person Dividing up the assets according to the will or North Carolina law The probate process begins with determining whether or not the decedent wrote a will, and locating it if one exists. If there is a will, the person named as the executor or personal representative in the will must qualify with the court in order to be officially named as executor. If there is no will, North Carolina law or Clerk of Superior Court determines who can qualify with the court as executor of the estate. The probate process will take at least several months to complete. Once all the assets of the estate have been identified and valued, creditors of the estate must be notified. Creditors are given three months to make their claims against the estate. Some estates may take much longer to get through probate. This is particularly true of very large estates that may have to deal with estate tax issues. You may not be able to avoid probate entirely, but you can take steps to remove some assets from probate. Probate avoidance is done to maintain privacy (probate is a matter of public record), reduce probate costs, and avoid delays in transferring assets. Several types of property do not go through probate, including: Assets held as joint tenants with right of survivorship. Assets held as tenants by the entirety between husband and wife. Life insurance proceeds and retirement plans and IRA proceeds, unless the estate is named as the beneficiary. Assets held in certain types of trusts. Your choice of executor is another important aspect of the probate process. The executor will need to complete many different estate administration tasks over the course of several months or more. 6 Estate Planning and Administration

You may choose a family member or loved one as executor, but make sure they willing and able to take on this position. They will already be dealing with an emotional loss, and probate administration can add to that stress. It s also helpful if your executor has some financial or legal knowledge. You can choose an attorney that handles estate administration as your executor if you don t want to select a family member for this role. King Law Offices: Helping You Provide for Your Family s Future We hope this ebook has given you an idea of some basic estate planning concepts and how they can be used to care for your loved ones. If you re ready to take the next step, our estate planning attorneys can sit down with you and get to know more about you and your family. Schedule a consultation today by calling us at (888) 748-KING. You also fill out the contact form on our website and someone from our office will get in touch with you shortly. We know that every family situation is unique and that every person has their own estate planning goals. We offer our estate planning packages to clients that are a good fit for these services. But if you need a customized estate plan, we can help with that too. We have multiple King Law office locations to serve clients throughout the Upstate of South Carolina and Western North Carolina. We look forward to working with you and helping you provide for your family s future. www.kinglawoffices.com 7

We work as a team with each client to identify the essential information for each case and to develop a strong legal strategy with a continued focus of bringing our clients to a better place. Serving North and South Carolina 888-748-5464 www.kinglawoffices.com