3 Things Everyone Should Know About Estate Planning

What Estate Planning Is

Every estate planning attorney generally has to dispel a common myth about estate planning during their initial consultation with prospective clients. Many Greensboro, NC residents are under the false impression that estate planning solely involves drafting a will. That couldn't be further from the truth, though. 

While executing a will, or signing it, so it is valid, is certainly an essential component of the estate planning process, drafting other documents such as the following is also critical:

• Financial power of attorney
• Health care power of attorney (proxy)
• An advance directive, such as a living will
• Beneficiary designation form

Even funding a trust is part of the estate planning process. For example, those individuals approaching age 65 or families with special needs children turning 18 will often fund an irrevocable trust to preserve their eligibility for Medicaid benefits. Setting up trusts may be ideal for tax or other reasons in North Carolina. A prospective trustor doesn't need tremendous wealth for an estate planning lawyer to help a Greensboro resident fund a trust. 

1. Knowing When To Plan Your Estate

Every estate attorney at our Greensboro, NC law firm of Ivey, McClellan, Siegmund, Brumbaugh & McDonough, LLP has heard prospective clients relay similar reasons for putting off drafting a will or other estate documents. They said they didn't think they were old or wealthy enough to need them. They often realize that's not the case once they witness the hoops someone close to them has to go through because an incapacitated individual or decedent never took time to draft estate planning documents.

There's no such thing as being too young to draft estate planning documents. When most minors turn 18, their parents cease to have any say over them. One situation that matters is if that adult child were to suffer life-threatening injuries in a car accident, for example. A parent of someone 18 or over wouldn't have the legal standing to tell doctors how their child would want them to proceed unless their son or daughter had appointed them as a health care proxy. 

As for the excuse of not having enough wealth to engage in estate planning in Greensboro, there needs to be a plan for what becomes of your assets, no matter what you have. Otherwise, the probate court will divvy them up per North Carolina intestacy laws, which often means that assets go to your closest relatives first, such as a spouse, children, and parents. 

If you have a girlfriend or boyfriend, for example, that you want to inherit your assets over these relatives, then you must put those preferences in writing in a will for the court to uphold your wishes. 

Also, it's important to know that cars, houses, family heirlooms, and digital accounts, like social media ones or photo dropboxes, are all assets you may leave to someone via your North Carolina will or place in a trust. You may, therefore, have more assets than you realize.

2. Knowing When To Review Your Estate Planning Documents

Ask almost any Greensboro estate planning attorney what insight they think is most important for clients to know. They will quickly tell you it's the importance of not only drafting these critical documents but regularly updating them too. 

You shouldn't ever let more than five years lapse without reviewing your estate documents to ensure they still align with your preferences. However, if a change in life circumstances, such as one of the scenarios below happens, then you will want to take the time to update your estate planning documents immediately:

• Marriage
• The birth of a child
• Divorce
• After death of heirs or beneficiaries

Getting married or finding out you're pregnant may be the impetus to start estate planning if you haven't done so already. 

While North Carolina intestate succession laws will likely apply, leading to your spouse inheriting your estate without a will in place, it's still important to memorialize your final wishes in writing. Doing so will save your family extra work upon your passing. 

Additionally, drafting a will or revisiting an existing one as an expecting parent not only allows you to detail your plans to leave behind certain assets to your child but also gives you an opportunity to appoint a guardian that you would want to have care for your son or daughter if something happened to you. 

Some other reasons why revisiting your estate plan matters include updating your:

• Medical treatment preferences if you became unable to voice them yourself
• Beneficiary designations on retirement plans and life insurance policies

3. What Makes for a Valid Will Varies by Jurisdiction

Another misconception our Greensboro estate planning attorneys have learned is that area residents are often confused about what constitutes a valid will in North Carolina. 

Know that each state has its laws surrounding what requirements must be met for a probate court judge to deem a will valid. Here in North Carolina, those basic requirements are that the testator (person executing their will) must:

• Be of testamentary capacity (sound mind)
• Sign the document oneself or have someone else do so at their direction while in their presence
• Have two witnesses also sign this legally-binding document

North Carolina probate law allows testators to handwrite their own will without the assistance of a Greensboro estate planning lawyer; however, there are risks in doing so. The attorneys here at Ivey, McClellan, Siegmund, Brumbaugh & McDonough, LLP keep up with changes in relevant laws that may affect the validity of a will and other estate planning documents, leaving them to be challenged in court. Working with a lawyer minimizes the chances of legal exposure.

It's also important to note that if you recently relocated to the Greensboro area from some other part of the country, you shouldn't assume that a will that was valid in another state is also valid here in North Carolina. It's always best to have an estate planning attorney review your will and any other documents to ensure they will stand up in a court of law when the time comes for them to need to do so. Our law firm can provide you with some reassurances on this end.

Whether you've recently considered estate planning for the first time or it's been a while since you last revisited your documents, we hope that the details we've shared above will serve as an impetus for you to take charge of yourself and your loved ones' futures. Reach out to Ivey, McClellan, Siegmund, Brumbaugh & McDonough, LLP to schedule your initial consultation with an estate planning attorney in Greensboro to discuss your situation to ensure your final wishes are upheld.