Prepare a letter of last instruction including:

• Location of personal documents, financial papers and accounts
• Names, addresses and phone numbers of family and close friends
• Personal and financial professionals who need to be notified of your death
• Names of people you wish to receive special things
• Preferences for services and disposition of the body, as well as any information about prepaid funeral plans or location of cemetery plot you may own

Have you looked at your will in the last 5 years or after a major life event; such as the birth of a child or grandchild, purchase of property, death or divorce?

• Name personal and/or financial guardian for dependents if appropriate
• Choose executor and/or trustee for your estate plan.
• Prepare information about Financial records so an executor can take over immediately
• Have you recently reviewed beneficiary designations on insurance and retirement accounts?
• Are there conflicts between your will and the titling of assets? Use appropriate form of ownership: It influences the way your estate is valued and how property is transferred.

A living will expresses your wishes concerning life-sustaining procedures in case of terminal illness and/or imminent death. A durable power of attorney for medical decisions grants power to a person you choose to make health care decisions if you are unable to do so. Who will handle finances if you are unable to do so? A durable power of attorney for finances grants powers to decide who will get what and when.

Probate is the process by which an individual’s property is distributed to his or her heirs. An individual can name his or her heirs by Will or the laws of intestate (an individual who dies without a Will) will govern who receives the property if no Will is found.  

The person who opens the estate, if there is a Will, is called the “Executor”. In a case where a person has left no Will, close family members have the right to apply to be the estate’s “Administrator”. If no close family member applies to administer the estate in the first 60 days after a person’s death then any individual, including a creditor of the deceased, can apply to open the estate.

Probate is simply the process of listing assets of a deceased individual for the Clerk of Court (by the Executor of the Will for the deceased individual) and using those assets to pay the valid debts of the estate. Once the debts are paid the assets are then distributed to the rightful heirs.

In North Carolina, land passes immediately to the heirs upon a person’s death. This means that if real estate needs to be sold early on in the estate administration it can be as long as the rightful heirs and the Administrator or Executor of the estate sign the Deed. There is no such thing as land being “tied up in probate”. Because of the way our probate laws are structured land can always be sold any time as necessary.

Probate fees in North Carolina are relatively modest. The fee for estates in excess of $10,000 is $ 40.00 plus $4.00 per each $1,000 of personal property (i.e. not real estate) held by the estate. The fees max out at $6,000. Thus in order to pay the maximum fee one would have to have an estate of $1.5 million dollars in personal property.

There are many assets in the average estate which are not subject to probate, fees or administration. These include pension plans, annuities and life insurance policies. All of these assets are ones in which a beneficiary is designated by the owner and the proceeds of all these assets pass outside the estate, thus the fees mentioned above are not payable on insurance proceeds or pension accounts. For many people these items make a majority of the value of their estate.

Your estate plan should be an ongoing process, not a one-time event. Your plan should be reviewed and updated as your family and financial situations change over your lifetime.

Estate planning does not have to be expensive. If you cannot afford a complex estate plan currently, start with an estate plan that you can afford. A younger family or single adult may want to have a living will, life insurance and powers attorneys appointed for their children. As your estate continues to grow you should continue to review your estate plan and make the necessary changes.

Some additional topics and items that should be addressed in your estate plan are the following:

• Provide instructions for who you want to receive certain assets
• Provide instructions as to the amount you would like each heir to receive
• Provide instructions for when you want an heir to receive assets
• Provide instructions for any charitable donations you wish to make

Some estates require additional planning due to the types of assets involved or the value of the estate. If the value of your estate exceeds the estate tax exemption amount, you should consider working with a qualified advisor(s) who may recommend one of several advanced estate planning techniques.   One, or more, of these techniques may minimize your estate and gift tax liability within the framework of your overall estate planning goals and objectives. Some of the most common advanced estate planning techniques include the following:

• Family Limited Partnership (FLP) / Family Limited Liability Company (FLLC)
• Irrevocable Life Insurance Trust (ILIT)
• Qualified Personal Residence Trust (QPRT)
• Private Annuity
• Private Foundation
• Charitable Remainder Trust (CRT);
• Charitable Lead Trust (CLT)
• Grantor Retained Annuity Trust (GRAT)
• Grantor Retained Unitrust (GRUT)
• Grantor Retained Interest Trust (GRIT)
• Legacy Trust
• Dynasty Trust