Common questions in these coronavirus times about estate-planning documents
November 1st, 2020 by admin
Perhaps it is a sign of the times, but more people ask these days what happens if they do not have estate-planning documents in place if they get seriously ill or they pass away.
If you do not have a will, North Carolina statutes define who gets your property, and it is not going to track what your wishes are.
If you do not have a will, you are not alone. One recent national study estimates that nearly 60% of adults have no estate-planning documents in place at all. Without a will, you are going a long way to assuring a bit of a legal mess.
If you have minor children without a will, they will inherit and get their share when they turn 18. But in your will, you can provide a minor trust to be sure your children get their share only after college or necessary career training (21-25).
Do not be thrown off by the word “trust.” Think of a trust as a bucket. You do not have to have significant assets to have a trust. A routine account with the appropriate wording that the account is in the trust will generally work.
If you have joint accounts with your spouse or one of your children, do you need a financial (aka durable/general) power of attorney (POA)? Your spouse/child can sign on joint accounts, of course. But there are several matters on which the law requires you or your POA agent to sign, and the law does not name an agent if you do not have a POA. If you are not competent mentally, there is generally no one to handle all your financial affairs without a valid financial power of attorney.
Many planners recommend that you review your estate-planning documents every three years, although this time may be a little shorter than necessary in my experience, unless there have been significant changes in your circumstances or relative tax and estate planning laws.
If you have an attorney who prepared your documents, or with whom you have a professional relationship, ask them to review your existing documents as a courtesy. If your planning documents are 10 years old or older, however, they likely should be updated to take full advantages of changes in the law which can save you expenses or complications when a life event occurs.
If your financial POA was executed before 2018, it likely should be updated. A major change in the laws occurred then relative to this important document. The flexibility of your agent to handle your affairs seamlessly, especially regarding long-term care options and expenses, has been enhanced considerably.
Advance directives are healthcare powers of attorney (hcpoa) and end of life directives (aka living will). The law provides who your hcpoa agent is if you do not name your own, which can create challenges about who makes decisions you are not able to make for yourself. The attorney expense to prepare these is modest, but if your assets are very limited and your health care choices are uncomplicated, ask your attorney preparing your other documents to provide to you contact information for hospice (now Trellis.) (336-768-6157.) It can provide to you simple but N.C. compliant legal forms for advance-directive documents without charge. (The signing of these documents by Trellis has been complicated by the coronavirus restrictions, however.) Ask the attorney preparing your other documents for a courtesy review of the executed Trellis forms if you wish. But experience shows Trellis health care documents are generally sufficient for the needs of some clients. (But stay away from “legal” forms on the internet.)
Remember: An informed choice is a smart choice.
The next column will discuss when (and if) you need a revocable (so-called living) trust.
This article was originally written by Mike Wells and published by the Winston-Salem Journal. To read the original article, visit the Winston-Salem Journal online here.
Tags: Law
Posted in: WS Journal Articles