You may wonder, “Who needs a will?” thinking you have plenty of time. However, a will is a fundamental element of estate planning. It’s essential to understand why you need one. Yet many people put off creating a will for far too long, often because they don’t realize just how crucial it is.
According to Investopedia, “Failure to prepare a will typically leaves decisions about your estate in the hands of judges or state officials and may also cause family strife.” (1)
Having a legally-sound will in place can provide peace of mind. If anything should happen, your wishes regarding your legacy and estate are straightforward. A will gives you the right to name your executor, beneficiaries, and guardians for any children. There is good reason why creating this legal document remains a priority for any legal adult who owns any amount of assets.
This blog will look at why having a validly executed Last Will & Testament is so crucial — no matter who you are or how much you own!
When Should I Write My Will? Your Essential Legal Document
Now is the time to ensure your last wishes are fulfilled. A legally binding Last Will & Testament is an essential document that allows you to designate essential matters. Some crucial part of a will include naming who will manage your estate when you die, how it will be distributed, and in what proportions.
According to Forbes, “When a member of your family dies there’s a lot of emotion involved, and I have seen families split apart over a spoon,” says Tim Estes, CEO and founder of Estes Financial Services in Fort Worth. Two sisters wanted possession of a single spoon that had been in their family for generations. “One sister got the spoon, and the other didn’t. They haven’t spoken for 15 years.”
Drawing up a comprehensive Will is vital for ensuring your property and assets pass according to your wishes after death — something everyone should consider regardless of their monetary value or tangible belongings. While many people view creating a valid Will as intimidating, in reality, it can provide much-needed peace of mind and security.
Creating Security for Family Members
Creating a basic will can also provide financial security and protection for your loved ones. By drafting this legally binding document now, you can state clearly how you want things handled in terms of who gets what upon death according to the laws in North Carolina.
At its core, having a legal will ensures that your wishes are honored by governing powers rather than the state making all decisions about your estate! If you don’t have a will, your estate passes to heirs based on a complicated legal system of the state’s laws called “intestate” law.
Intestate laws do not work like you would expect, either. Many married couples assume that their spouse would inherit everything. However, when you die intestate, your spouse may receive a certain amount. However, after that, often one-half of money and property passes to a surviving parent instead of a surviving spouse.
Sometimes an adult child will inherit one-third of the estate over a spouse after the spouse receives the first $30,000.
Other strange ways that intestate law works relate to bloodline and decision-making reasoning you would never choose for your loved ones.
The legal process of intestate law will also likely leave out other family members. And a trusted friend who has been an essential part of your life will not receive a dime!
Dying intestate can leave many assets in the grip of state law that makes no sense to your loved ones.
Naming Guardians for Minor Children
Another advantage of having a will is that you can designate who will take care of any minor children should something happen to you. This is especially important if both parents are deceased and do not have a plan for the child’s guardianship.
Having your wishes written down clears any potential confusion or disagreement between family members, particularly if they are unable to agree on who gets custody of the minor children. The other benefit is knowing your chosen guardian will handle all decisions regarding the welfare of the minors with love and care — instead of leaving it up to chance or court decisions.
Even if you only have one child and are a married couple, you can’t predict an accident that could leave your child an orphan. When you go ahead and name a guardian and talk with that person about your choice, your child stands a better chance of having a good care situation if the unexpected happens.
Giving Direction to the Probate Court
Your last will and testament lets the probate court know exactly how you wish to leave property or other personal items and assets. The probate process appoints a personal representative to handle your estate. With a will, your named executor becomes the personal representative. When you name an executor, you choose the person who will pay your creditors and debts and then distribute the remaining assets and money to your heirs.
The probate process is an expensive and lengthy court process your family would most likely like to avoid. However, without a will, things are even worse. Your family members may suffer from unmet expectations and feel upset with how the state divides up property without your input.
When most people learn about how a will can help distribute specific assets and take care of a family member or dependent children you choose, they see the importance of writing their own will.
Working with legal estate planners can help you write a will that expresses your last wishes and allows the right person to distribute your estate.
Ensure Your Will Is Valid in North Carolina
Another way to create disputes in your family is by writing a will that is invalid or easily contestable. When the will’s validity is called into question, all sorts of issues crop up.
Probate is a public process. Unsavory businesses or individuals may submit fraudulent claims for your estate assets. Greedy family members may even contest your will and tie up your assets in court for years on end.
You must be at least 18 and of sound mind to write your will. There are three kinds of wills that North Carolina deems valid.
Attested Written Will
An attested written will is signed by you and attested to by at least two competent witnesses. There are three requirements for your attested written will to have validity.
- You must sign the will or have someone else in your presence sign the will for you.
- You must let the attesting witnesses know that the will is yours by signing it in their presence or by acknowledging to them your previous signature.
- The attesting two witnesses must sign the will in the presence of the testator but need not sign in the presence of each other.
Holographic wills must meet these three requirements:
- You must write the entire will in your handwriting (however, if other words or printed matter also exist on the page, it’s not a problem for the validity of your will.)
- You must write your name in your own handwriting
- No witnesses needed for a holographic will
A nuncupative will is an oral will that you speak out loud. A person’s assets may be willed through speech in an emergency situation. However, oral wills must meet these requirements for validity in North Carolina:
- You must orally speak your last wishes in your last sickness or in imminent peril of death. You must then not survive your sickness or peril.
- You must declare that this is your last will and testament before two competent witnesses whom you specially request to bear witness to your spoken wishes. Your witnesses must be there with you together when you speak your last will and testament.
Obtaining professional advice from an estate attorney can make all the difference when making your will and estate plan.
Name Beneficiary Designations for Assets That Pass Outside of the Probate Process
While most assets pass to heirs through your will, other assets do now. The following financial instruments pass outside of your will. So it’s crucial to keep up with who you’ve named with beneficiary designation.
- Life Insurance: If you have a life insurance policy, you must name your beneficiary or beneficiaries to receive the proceeds of the policy upon death.
- Retirement Accounts: Assets in retirement accounts such as IRAs, 401(k)s and other employer-sponsored plans are passed outside of the will and go directly to named beneficiaries.
- Jointly Owned Property with right of survivorship: Property you own jointly with a right of survivorship passes to the surviving joint owner.
- Jointly owned bank accounts with right of survivorship: Bank accounts you own jointly with a right of survivorship pass to the surviving joint owner.
Avoiding Estate Taxes and Probate
You may worry about an estate tax on your assets when you pass away. However, North Carolina does not have a death tax. And unless you have millions, you won’t need to worry about a federal estate tax either.
However, it is possible to avoid the public process of probate for your loved ones. Working with an estate planning attorney to create a trust can avoid probate court entirely.
A trust holds your assets under another name. Because your trust owns your assets, probate court has no jurisdiction over them. Instead, a trustee that you name handles your estate. Pour-over wills allow any assets you’ve left out of your trust to “pour” into your trust at the time of your death.
Talk with your attorney about creating a trust that can help avoid probate, create contingencies for your heirs, or help you plan for long-term care. Trusts are versatile legal instruments that an estate planning legal professional can help you with.
Our Experienced North Carolina Estate Planning Attorneys Can Help
No one wants to think about their own mortality, but legal documents like wills help ensure that your last wishes are carried out.
Creating a Last Will & Testament provides security and direction for your loved ones should something happen to you. It helps protect them from potential pitfalls associated with probate court proceedings or misunderstandings between family members when it comes to the division of your assets.
At Hopler, Wilms, and Hanna, our estate planning attorneys in North Carolina have experience with wills and trusts and powers of attorney, health care directives, and other estate planning tools. Our attorneys can help you plan for your future and provide peace of mind for yourself and your loved ones.
Contact us today to get started. We look forward to discussing your estate plans and helping you protect what matters most.