Everyone needs a Last Will & Testament

You should prepare and execute a will to protect your loved ones. Even if you don’t care about who gets the property, making end of life planning decisions will save your family and friends a great deal of grief.

A will is a basic component of estate planning. It specifies how your assets will be distributed after your death, and who will receive them. Without a will, North Carolina law will determine how your estate is distributed. Without a will, a spouse will usually get the entire estate if there were no children and the person’s parents are deceased. If there are children and/or a parent survives, the spouse’s share drops to a set amount and property is divided among parent(s), children, and lineal descendants.

Despite the importance of a will, a quick search of the Web shows that a slight majority (55–60%) of all adults in the United States do not have a Last Will & Testament. I believe this statistic is probably true because when we meet with clients, few clients tell me they have wills.

As part of any good estate plan, you need to make sure that non-probate assets have named beneficiaries. Use of payable on death (POD) accounts and in some cases, trusts, can reduce your tax exposure. Naming your estate as a beneficiary of a life insurance policy can have horrible tax consequences. Another attorney recently told me she did not know how to break the news to a family that consulted with her to handle their father’s estate that because the life insurance was made payable to the estate instead of named beneficiaries; they would owe almost half in taxes to state and federal authorities.

In the context of separation and divorce, a spouse loses the right to take under intestate succession upon a divorce and loses other rights such as the widow’s share. Also, provisions in a will in favor of a spouse are revoked upon a divorce. You should speak with your family law attorney in detail to understand how these laws affect you.

Perhaps as important as a Will is having a Durable Power of Attorney — a legal instrument that allows another person to act for you and is effective even though you may be incapacitated. When an individual becomes incapacitated — due to mental or physical disability or other reason — a trusted love one can continue to make financial decisions for them without the cost and expense of a guardianship/incompetency hearing. A Health Care Power of Attorney allows a loved one to make health care decisions for you in the event you are unable and a Living Will (also known as a Declaration of a Desire for a Natural Death) allows you to make advance health care directives.

We strongly recommend that you review your entire estate plan and have an up to date Last Will & Testament, Durable Power of Attorney, Health Care Power of Attorney, and Living Will. You should review and update these documents regularly and immediately upon a life change such as birth of a child, move to another state, marriage, separation or divorce.

Our attorneys routinely help clients with their estate planning needs and we are happy to assist you.

Disclaimer: This information is only applicable to North Carolina. We strongly recommend that you consult with a licensed attorney in the State of North Carolina concerning your estate planning needs.