Today I wanted to get back to the basics and do a quick post on estate planning 101. Estate planning in North Carolina is different than in other states. Sometimes, with all the news and information that is floating around out there, people forget the basics about what estate planning is, why they need an estate plan, and how to go about getting one.
Estate Planning in North Carolina… What is it?
An estate plan is, at its core, a set of legal documents that can be used to protect you and your family in the event of your incapacity or death.
When we are talking about an estate plan, we are usually talking about the following documents:
- Will (aka Last Will and Testament)
- Living Trust (for trust-based estate plans)
- Health Care Power of Attorney
- General Durable Power of Attorney
- Living Will aka Advanced Directives
These are the basic documents that go into many estate plans. But here at The Hart Law Firm, we don’t stop there. There are some additional documents and services that we include with our estate plans, which include:
- Temporary Emergency Guardianship Forms (for clients with minor children)
- HIPAA Authorizations
- Medical Authorizations for a Minor Child
- Funding Instructions, Forms, and Templates
- A Legacy Conversation
So now that you know what an estate plan is, let’s dig into why estate planning is necessary.
Why Do You Need an Estate Plan?
I’ve written entire blog posts on why estate planning is important. And depending on the stage of life you are in, estate planning may serve a different purpose for you than it would for other people in a different demographic.
Here are just a couple of the ways that an estate planning may help you.
If You are a Parent of Minor Children
If you are a parent with minor children at home, and you don’t have an estate plan in place, you are putting your kids in serious jeopardy.
This is because not only do they run the risk of being taken into protective custody with someone they have never met and don’t know if you (and your spouse) became unable to care for them, but there are also financial and legal considerations to leaving an inheritance to a minor child.
Many parents leave their spouse as the primary beneficiary and their kids as the secondary beneficiary on their retirement plans and life insurance. But if a minor child were to receive a sizeable inheritance, there is a good chance that much of this would be eaten away by the process of having this money looked after by the courts so long as they are a minor child.
And not only that but as soon as they turned 18, the money would be deposited directly into their bank account with no supervision. I don’t know about you, but if I received a large inheritance when I turned 18 I can’t say for sure that I would still have that money today.
If You are a Business Owner
If you are a business owner, an estate plan is an absolute must. You need to develop a business succession plan to assist in transitioning the business in the event that something would happen to you.
An estate planning attorney can help with this.
A business succession plan will typically involve a buy-sell agreement to ease the transition of the business, as well as some sort of life insurance to compensate your beneficiaries for the value of your business.
You also need to plan for what would happen in the event of your incapacity. Do you know who would take over the business? Could it continue to run in the event that you are unable to run it? These are difficult questions to answer, but an estate planning attorney can help.
Are You Getting Ready to Retire?
As people get older, the likelihood that they can purchase long-term care insurance will decrease substantially. This is because the premiums will become too expensive, or you will be outright denied for coverage.
At this point, you may want to start thinking about how to safeguard your assets so that they would not be eaten up by the cost of nursing home care, should you need to be placed in a nursing home.
This is where Medicaid planning comes in. And the thing about Medicaid planning is that you need to start early. When you apply for Medicaid to assist with the cost of nursing home care, you can only have $2,000 in assets to your name.
How you get to that point requires the assistance of a lawyer to help you plan how to give away or otherwise transfer your assets out of your name and into a trust or other non-countable entity so that you can still control your assets and where they go, but they will not get spent down just so you can qualify for Medicaid.
So hopefully this brief overview gives you a better understanding of why you need an estate plan, and what could happen if you don’t plan.
How to Create an Estate Plan
Well, thankfully, this is the easiest part!
We make it easy for clients to meet with us through a no-cost wealth planning session. During that meeting, we will go over your personal situation, address any potential issues with your current plan (or lack thereof), discuss what would happen in the event of your incapacity and death, and start to plan out an alternative future with a plan in place.
If you like what you hear, and we are able to answer all of your questions, then we can start the process of creating a plan that uniquely serves the needs of your family in your personal situation. If you are happy with your current situation, then you walk away with no obligation.
It’s just that easy.
How to Get Started
To schedule your no-cost wealth planning session, you can call our office at (919) 460-5422 or fill out our online contact form.
We are currently booked out about 2-3 weeks, so the sooner you call, the sooner we can start the process of helping you to create your estate plan and protect your family and children, your business, and your wealth!