Estate planning is a task many people put off by telling themselves that only the ultra-wealthy need to plan for the distribution of their assets after their death. This couldn’t be further from the truth. Anyone over the age of 18 can benefit from having a will—including parents with minor children, people living in blended families, and those who want to support a favorite charity.
Benefits of a Will
A will is a legally binding document that leaves instructions for after your death. Key reasons to make a will include:
- Control the distribution of your assets. If you die without a will, your property is distributed according to North Carolina’s intestacy laws. This means your closest living relatives get your property. Typically, this is your spouse or your children. If you are unmarried and have no children, your parents, grandparents, siblings, aunts, or uncles may have a claim to your assets. If you have no living relatives, your property reverts back to the state. A will lets you determine who inherits what.
- Leave specific items to charity. You can use your will to leave antiques or other valuable personal items to the charity of your choice.
- Name a guardian for your children. If you have minor children, your will names a guardian for them. Without a named guardian, the court will step in to decide whom your children must live with.
- Name an executor for your estate. The executor carries out the provisions in your will. A trusted family member or friend is normally selected for this task. If you don’t name an executor, the court will appoint someone.
What a Will Can’t Accomplish
Although a will is the foundation of an estate plan, it can’t handle every goal you may have. Your will can’t:
- Name someone to handle your medical or financial decisions if you are incapacitated. Power of attorney documents should be created to give the person or persons you select the authority to make decisions on your behalf if you become too ill or injured to handle your own affairs.
- Provide funeral instructions. Since wills aren’t read until several days or weeks after your death, this is not the place to leave funeral instructions. You should create a separate document with guidelines for your memorial service and provide your executor with its location.
- Reduce estate taxes. There are steps you can take to minimize estate taxes, but this is far more complex than simply creating a will. You need to work with an experienced estate planning attorney to create a strategy personalized for your unique needs.
- Avoid probate. The probate process is time-consuming and expensive, but often unavoidable if a will is your sole estate planning tool. A revocable living trust helps ensure that assets are not considered part of your probate estate, although they will still be part of your estate for tax purposes.
- Put conditions on gifts. If you want to leave money to heirs for a specific purpose, such as providing college funds for your grandchildren, a will is not suited to this task. There is no one who can legally enforce conditional gifts made with a will, so creating a trust is the better option.
- Provide for a loved one with special needs. If you are worried about who will care for your child, grandchild, or other loved one with special needs, setting up a trust is the best way to ensure they have an income for expenses after you are gone.
- Make a large ongoing gift to a charity. If you want to make multiple payments to charity, such as a yearly donation to fund an organization’s specific program or event, a charitable lead trust is the best way to accomplish this. After a predetermined period of time, the remaining assets in the trust can then be transferred to one of your heirs.
Creating an Estate Plan That Fits Your Needs
Although online resources have led to an increase in the popularity of DIY estate planning, this approach carries significant drawbacks. For example, one-size-fits-all templates don’t recognize the complexities of blended families that include stepchildren or half-siblings. Additionally, templates may not account for the unique laws of each state or be updated regularly to reflect the latest legal changes.
An experienced estate planning attorney can help you create a comprehensive estate plan that protects your assets, minimizes your tax liability, avoids probate, and ensures your loved ones will be provided for when you are gone. An attorney can also review a previously created estate plan to make sure no updates should be made to accommodate changes in your assets, family structure, or personal wishes.
Legacy Lawyers is committed to meeting the estate planning needs of North Carolina residents. Review our calendar of upcoming seminars and workshops, then call our office in Wilmington or fill out the contact form on this page to schedule a free 15-minute consultation with a member of our legal team.