What if there is no last will and testament? When a person passes away without a last will and testament, they are said to die intestate. In intestacy, property will be distributed according to the laws of the state where a person resided when they passed away. In North Carolina, that law is referred to as the "Intestate Succession Act". The laws are complex and the judicial system has no idea how you would want your property distributed so they employ a "one size fits all" formula. Without a will, even a creditor that you are obligated to pay can qualify as an Administrator of your estate. Administering an estate without a will is a long, expensive, and complex procedure. Having a will makes the administration of your estate go much more quickly and cheaply. The added costs involved in an intestacy are much higher than drafting a last will and testament.
Having a valid will ensures that your children from a prior marriage will receive the proper share of their inheritance and guarantee that your grandchildren and/or you favorite charity will receive the specific portion of your estate that you want them to get. More importantly, having a will is likely to reduce or even eliminate family infighting at a time when your loved ones should be reminiscing about the time that they have spent with you on earth. Everyone should have a Last Will and Testament....... "Do you have one?"
A Power of Attorney (POA) or letter of attorney is a written authorization for someone else to represent or act on your behalf in private affairs or business. This authorization may relate to a number of areas where you would need to have someone act as your agent. There are many types of Powers of Attorney, but the 2 used most commonly used in Estate Planning are the General/Durable Power of Attorney and the Health Care Power of Attorney.
A trust is a legal entity, separate from the individual who created it. A trust is governed by certain rules which are set out in an agreement—usually between two parties. One person, (the "trustor") puts money or other property into the trust. A trustee is the person who agrees to hold the property according to the terms of the agreement. The trust agreement specifies what the trustee is required to do with the property – how he is to hold it, for how long and who is to receive any benefits. Those who are entitled to receive the benefits of the trust are called the beneficiaries. You can even create a trust with yourself as both trustee and beneficiary. This is commonly referred to as a Living Trust. With a Living Trust, you are permitted to manage and enjoy the trust property during your lifetime and the agreement provides for how it should be distributed at death. You can change or cancel the trust at any time. Because the property is treated as if legally “owned” by the trust and not by you, it is not subject to a court supervised probate of your estate at death. The inconvenience and expense of legal fees and court documents are avoided simply because your property is owned by this separate legal entity even though you are the trustee and beneficiary. Additionally, and you can revise or revoke the trust at any time.
Most people believe that only the wealthy can benefit from an estate plan. That is the furthest thing from the truth. Everyone should build and protect their hard-earned money and personal items from being plundered and depleted unnecessarily. If you own a home, have minor children, have grandchildren, own a business, expect to receive an inheritance, live in a blended household or simply want to ensure that specific items actually gets delivered to a particular loved on, then you can benefit from an estate plan.
A proper estate plan is designed to give you a voice at those moments when you can no longer be heard. Powers of Attorney gives you a voice when you are alive but not physically present or to incapacitated to communicate your desires. A Last Will and Testament is designed to give you a voice after death by ensuring that your estate is handled according to your wishes and Trust instruments are designed to help you seamlessly transition between both periods of your existence.
Forward thinking so you can rest easy.