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By David Inabinett, Attorney at Law

Settling estates for loved ones who pass without a will (“intestate”) can be a stressful, lengthy, task intensive, and sometimes even contentious process. Unfortunately, whenever finances or precious belongings are involved, it can become a source of infighting among families, even close-knit ones. As with most important things in life, taking a few simple steps to be prepared can save your loved ones’ endless headaches. Preparing an estate plan and designating beneficiaries for any assets you may own will help your loved ones accommodate your wishes.

For most families, the rules in North Carolina are relatively straightforward. By taking inventory of your assets and speaking with a reputable attorney, you can avoid putting your beneficiaries in a tough position after you are gone. Making sure loved ones are not left with undue burdens, debts, and other financial obligations to deal with is important to us all. Even preplanning/prepaying for your funeral is a huge gift to your family. By establishing a will or trust, and properly funding or re-titling assets into that trust, you can help simplify the process for your loved ones. Additionally, planning for the possibility of incapacity due to age/health issues is imperative, so complementing your estate plan with advanced directives such as a power of attorney, health care power of attorney, and living will is critical. It is worth talking with a trusted estates attorney to make certain you have plans in place that reflect your wishes.

In preparation for meeting with an estate planning attorney, we recommend pulling the following information together:

  • Prepare a list of all bank accounts, retirement accounts, real property, and other assets you own, and identify whether there are co-owners or beneficiaries already assigned to these assets.
  • Identify the beneficiaries and provide their names, addresses, contact information, and their relationship; many financial providers now require the beneficiary’s date of birth and Social Security number.
  • Consider adding a power of attorney for situations in which you may not be able to make important decisions for yourself (injury or illness); powers of attorney may be limited or broad, i.e., a healthcare power of attorney only permits the party named to make health related decisions versus general financial decisions. Decide if your wishes include a living will, indicating a desire to withhold life prolonging treatment in the case of terminal illness, permanent coma/vegetative state, or advanced cognitive disease.
  • Make certain your estate planning documents are in a safe place and that your attorney and/or family member(s) know where to find them. You might choose to purchase a home safe or fire box or rent a bank safety deposit box if necessary.
  • Note that assets with a co-owner (jointly owned property, for example), or certain accounts and insurance policies with a designated beneficiary (such as life insurance, retirement plans, or most 401k plans), generally do not need to go through the estate, as they bypass the will and are distributed directly to beneficiaries if those are listed in connection with such accounts or policies.

If you die without a will in the state of North Carolina, an administrator for the estate will, upon request of a family member or potentially even a creditor of your estate, be appointed by the NC courts. Assets and debts will be identified, outstanding debts paid, and the remaining assets distributed based on then-current North Carolina law as to the distribution of an estate in the absence of a will. Note these choices and distributions may not reflect the actual wishes of the deceased, and may include individuals who are minors or incompetent or receiving public benefits that will be affected; it is always better to be proactive and define who you want to administer your estate and how you want your assets distributed. Being appointed administrator conveys numerous obligations to make sure the estate debts and proceeds are paid off properly. It is an obligation that is not to be taken lightly and consulting with an experienced attorney is usually the best course of action to ensure your desires and wishes for a smooth transition are followed and in a manner which is as efficient and cost-effective as possible.