You accumulate assets and property throughout your lifetime. Through trust and estate planning, you can arrange for the transfer of your assets and property at death and/or during your lifetime to the persons or charitable organizations that you want to benefit, in the manner desired, while minimizing taxes and other costs. Estate planning involves identifying your wishes and concerns, formulating a plan to carry out those wishes and address those concerns, and drafting the necessary documents to effectuate the plan.

Do I Need An Estate Plan?

Yes. The reasons for creating an estate plan are numerous. By creating an estate plan you can ensure that your assets are transferred to the intended beneficiaries; prevent state law from controlling who receives your property after your death; name a guardian for minor children; provide for the management of assets until a beneficiary reaches an appropriate age/maturity level; minimize the possibility of confusion/disagreement after death; and name responsible parties to ensure your wishes are carried out.

Creating an estate plan can also reduce the financial burden on your family and friends by planning to minimize taxes and to allow for an efficient administration of your estate. In addition, once created, it is important to remember to review your estate plan on a regular basis, or on the occurrence of a major life event such as divorce, the birth of a child, or a significant change in financial circumstances. Schedule a consultation with an elder law attorney with The Van Winkle Law Firm.

Estate Planning Process

Initial Meeting

The estate planning process begins with an information gathering meeting between yourself and an estate planning attorney with The Van Winkle Law Firm. During this meeting, the attorney will ask questions related to your background, goals for your assets and property, and financial situation. It’s important to be honest and provide complete information as the attorney uses every detail to create the best estate plan for your specific situation. Information gathering is an essential aspect of successful estate planning. In order to make the initial meeting as time efficient and cost-effective as possible, The Van Winkle Law Firm will send you a personal information worksheet to complete and return prior to the initial meeting.

Estate Plan Development

Once your attorney has a clear picture of your circumstances, goals, and wishes, they will begin developing the estate plan based on this information. Depending on your circumstances the creation of an estate plan may involve the creation of numerous documents including, but not limited to, Last Will and Testament, Revocable Living Trust, General Durable Power of Attorney, Health Care Power of Attorney, Living Will, HIPAA Release form, and certain types of Irrevocable Trusts. During this process the attorney may also recommend:

  • Income and Estate tax minimizing or saving strategies;
  • Strategies to make your estate administration less burdensome on your family and loved ones;
  • Future changes, such as the need to alter documents in the event of a marital change, or those related to the ages for children/grandchildren;
  • Techniques to allow for a smooth business succession plan; and
  • Updating beneficiary designations on your qualified retirement plans, bank accounts, brokerage accounts, and life insurance policies, so that the beneficiary designations are consistent with your estate planning goals.

When all necessary documents have been drafted and approved, the plan can be executed as needed.

What Is The Difference Between A Will & A Trust?

A will is a legal document that gives you control over who receives what assets and personal property after your death. A trust is an agreement between yourself and another person, the trustee, who will oversee the management of assets based on your instructions. Trusts are usually revocable living or irrevocable and an estate planning lawyer with The Van Winkle Law Firm will help you decide if one is applicable to your situation.

Typical Estate Planning Documents

The documents required for estate planning are particular to each individual set of circumstances. That said, it is typical for a person to need the following documents for a complete estate plan, including the Last Will and Testament; General Durable Power of Attorney; Health Care Power of Attorney; Living Will; and HIPAA Release Form.

The Will

In many circumstances, the Last Will and Testament, or Will, is the cornerstone of an individual’s estate plan. North Carolina recognizes four types of Wills, which include attested written wills, holographic wills (i.e. handwritten), nuncupative wills (i.e. oral), and joint wills. Of these, the most common and the most recommend is the attested written will. In many cases, the Will is the essential estate planning tool that allows individuals to transfer their assets to intended beneficiaries in the manner so desired.

A Will also allows you to name a guardian of minor children, name the individual(s) to execute your estate plan and may reduce the administrative barriers on your beneficiaries after death. Even if you have a Will, it is important to update beneficiary designations on assets such as qualified retirement plans and life insurance policies. Even if you have a Revocable Living Trust, it is still necessary to have a Will in order to catch and then pour over any assets that were not placed into the name of the Trust during your life into the Trust upon your death.

The Living Will

Also called an advanced health care directive, this document states what medical treatment you wish to receive — or not — if you lose the ability to make the decision yourself, such as with incapacitation. Specifically, the Living Will allows you to declare your wishes for three possible medical conditions, which include an incurable or irreversible condition; unconsciousness, when it is unlikely that consciousness could be regained; and advanced dementia or similar substantial and irreversible cognitive loss.

In those conditions, this form allows you to declare whether health care providers either may or shall withhold life-prolonging measures and whether you would still want artificial nutrition despite withholding other life-prolonging measures. This form also allows you to specify whether your Health Care Agent has the authority to override what you've said in your Living Will. The format of the Living Will is governed by North Carolina law. Your attorney can assist you in preparing more specific written instructions about your medical choices, in your own words.

Revocable Living Trust

A trust isn’t required in an estate plan but can provide many benefits to you and your survivors if you use the right type of trust for your situation. Depending on your circumstances and goals, it may be appropriate to create a Revocable Living Trust. A Revocable Living Trust serves many of the same estate planning functions as a Will, in addition to a number of benefits, which include allowing for the avoidance of probate for any assets titled in the name of the trust during your lifetime; privacy; flexibility; the potential for a less burdensome administration after death; and continuity of management of assets in the event of your death or incapacitation. For more information about a Revocable Living Trust, contact an attorney at The Van Winkle Law Firm.

General Durable Power Of Attorney

The General Durable Power of Attorney will authorize the individuals, or entities, you name to act on your behalf if you become incapacitated during your lifetime, or simply for convenience if you wish to have assistance in handling your affairs. In contrast to the Health Care Power of Attorney, the General Durable Power of Attorney allows these individuals, or entities them, to manage your day to day affairs, finances, and to make non-medical decisions on your behalf.

Specifically, it will enable payment of bills, the filing of health insurance claims, collecting monies owed to you, the filing of income tax returns, and performance of other acts on your behalf in the event that you cannot manage your own affairs. Because of the breadth of responsibility, the Agent acting under a General Durable Power of Attorney is typically given, it is important to carefully consider who you would wish to designate. Normally it is advisable to name several alternatives.

Health Care Power Of Attorney

The Health Care Power of Attorney is a document that authorizes desired individuals to make decisions for you related to medical treatment and other personal services. This document is important to ensure that difficult decisions can be made — in accordance with your wishes — when you are unable to make those decisions yourself. This authority is granted only if you are unable to make or communicate decisions yourself.

Under such circumstances, your Health Care Agent would select the physician(s) and hospital where you would be treated and would be authorized to grant consent for medical treatment. In addition, if desired you may limit the scope of your Health Care Agent to make decisions. The Health Care Power of Attorney also allows you to specify your wishes in regards to burial, cremation, organ donation, and other end-of-life matters.

Other Important Estate Planning Considerations

Estate Planning should not be “one-size fits all” process. An attorney with The Van Winkle Law Firm can assist you with creating a customized plan that is both consistent with your goals and concerns, and also appropriate based on the type and scope of assets in your estate. One important consideration in this process is whether your assets would be considered a Probate Asset or a Non-Probate Asset.

Probate Assets

Probate assets are those which will need to pass through the court-supervised process — known as Probate — of paying off debts, expenses, and claims after your death, and then distributing your assets to the beneficiaries named in your Will or in accordance with North Carolina law if you die without a Will. Probate assets are assets held in your individual name which are not designated to go to a specific beneficiary upon your death.

This would typically include vehicles, individual bank or investment accounts, and business interests. If you have a significant amount of probate assets it may be advisable to consult with an attorney at The Van Winkle Law Firm to consider whether it would be appropriate to employ probate avoidance techniques. However, it should be noted that it is not always desirable to avoid probate.

Beneficiary Designations

This type of will alternative allows the owner of an asset, such as a life insurance policy or retirement plan, to choose who would receive a percentage of the asset at the time of the owner’s death. Assets with a beneficiary designation are usually non-probate assets but without a designation or naming the estate as the beneficiary, the asset is subject to tax implications.

Revocable Trusts

Revocable trusts are frequently used individually or jointly and allow the property owner to transfer assets and property into a trust. During the owner’s lifetime, they have control over the trust and can make changes as they see fit. Upon the owner’s death, the distribution process for assets and property is similar to that of a will.

Non-Probate Assets

Non-Probate assets are those which typically do not need to pass through the court-supervised process of Probate in order to be distributed to your specified beneficiaries. Non-Probate assets typically include qualified retirement plans (i.e. IRA, 401k) to which you have named a beneficiary on the account itself; life insurance policies where you have named a beneficiary of the policy; and assets held in a revocable or irrevocable trust.

Non-probate assets also include bank or investment accounts where you have named a “transfer on death” beneficiary and assets held with others as tenants by the entirety or jointly with a right of survivorship. Because the disposition of these assets is generally not governed by the provisions in your Will, it is important to ensure that the beneficiary designations, title, and/or trust are up-to-date and consistent with your wishes.