“Estate Planning” sounds like a complicated process designed for wealthy people, but really it’s just about getting your affairs in order in case you die or become incapacitated. It’s just a matter of planning for the end of life. As unfortunate as it is, none of us know for whom the bell tolls and you might be next. There are many issues related to planning for the unexpected.
Ask yourself these questions.
- Have you thought about who will take care of you and make your medical decisions if you are in an accident or have a medical event that renders you incapable of caring for yourself?
- Have you pondered who will inherit your savings, any retirement funds, your antiques, your digital assets, even the photo albums on your coffee table?
- Have you considered who should have control of your financial decisions before your death if you become incapacitated and who, if not the same person, should be in charge after your death.
If you haven’t thought this through, it’s time to make a plan. It can be as easy or as complicated as you choose.
Estate Taxes
In NC, you don’t have to worry about estate taxes unless you own more than $20,000 in assets. Federal law sets the bar at 11.58 million, so most of us don’t really have to worry about taxes taking our money when we die.
Probate Court
Estate taxes may not be an issue for you, but if you have more than $20,000 in assets with no will in NC, your private affairs will be made public knowledge before a probate court. Also, with no will, your family and friends could end up in probate court fighting over your assets. AND, part of your estate assets will go to paying for lawyers and other fees associated with probate court costs. Making an “End of Life Plan” or “Estate Plan” just makes sense.
Let’s look at the important documents you’ll need to draw up to have peace of mind.
Critical Estate Planning Documents
1. Last Will & Testament
In NC, a last will and testament is a legal document that you draw up to provide instruction for the distribution of your estate to your beneficiaries. You must be of sound mind to draw up a will, so it is important to do this before anything unexpected happens.
2. Living Trust, if applicable
A Living Trust is a legal framework that holds your assets and helps reduce tax load. You appoint a trustee who manages the trust and then gives the assets to the beneficiaries at the time and in the amounts you specify in trust documents. This is not a necessary part of every estate plan.
3. Advance Directive (“Living Will”)
An advance directive is a written record of your medical choices. In NC, this document allows you to express your wishes for future health care so that you can guide decisions about your care if you are incapacitated. This is not a legally required document but may be helpful to medical staff as they know your wishes.
4. Durable General Power of Attorney
This document is important for planning your financial matters if you become incapacitated or declared incompetent. Who would you want to designate to act on your behalf in transactions including your real and personal property? Once you pass away, this document and the powers it grants are removed and the Durable Power of Attorney is null and void.
5. Healthcare Power of Attorney
A Healthcare Power of Attorney is naming the person, called the agent, whom you designate to make and/or communicate medical decisions if you are incompetent or incapacitated. This person can also nominate a potential guardian if you are eventually declared incompetent. This document needs to be in place BEFORE you need it. If you hold off and think it is not relevant to have this and you become incapacitated, it is TOO LATE to make any decisions.
This agent that you name is also in charge of the disposition of your remains. Your agent makes decisions about whether you wish to allow an autopsy, donate organs or donate your body to science, or have cremation or burial.
6. Disposition of Remains
Families often don’t understand the laws involved in planning a funeral. Some 15% of families have pre-planned for the end, but for those families who have not planned, there is often a struggle with the available choices.
Legally in NC there are 4 ways of Disposition to choose from:
- Burial: With this type of burial, a shroud or organic casket is used to bury the body in a green cemetery. There are no chemicals in the ground and no embalming. There is also no cemetery vault. This is a popular option in the Triangle as it is environmentally friendly.
- Cremation: 65% of the triangle population prefers cremation. With cremation, legal documents are important. You must have an authorized person sign the cremation authorization. A surviving spouse is authorized to sign. If you do not have a surviving spouse, your grown children can legally sign, but they ALL have to agree to cremation and ALL sign the authorization for cremation. If some children are not available to sign or refuse to sign, there can be disagreements over what should be done. Having the Healthcare Power of Attorney cuts through any problematic issues as your agent knows your wishes and carries them out.
- Anatomical Donation
- Entombment
Start Your Plans Today
The important thing to remember is that estate planning is for everyone. This is planning that is done for end of life and is not just about your assets. We all have desires and wishes for what will happen if we are incapacitated or declared incompetent. We all have thoughts about how we would like to be buried or whether we would choose to be cremated. Make those wishes known before it is too late.
If you have any questions about how to start your estate and funeral planning, contact an attorney who specializes in estate planning and talk with your local funeral director about their pre-planning options. Estate and end of life planning is easier with an expert to guide you through the legal forms and the choices you need to make.
Check out our WEBINAR REPLAY
Learn more about estate and funeral planning with Joe Smolenski, Renaissance Funeral Home Owner and Director and our own Adam Hopler, Estate Planning and Litigation Attorney as they discuss the importance of making plans for end of life situations.