By Attorney Kelly Jesson
National Estate Planning Awareness Week was adopted in 2008 to help the public understand what estate planning is and why it is important for all people, not just the uber-rich. An “estate” does not necessarily mean something like the Biltmore Estate. Everyone has an estate, even small or insolvent estates. Estate planning is more than money – estate planning allows you to gain control and peace of mind over difficult and unpredictable situations. We have previously written about the difficulties caused by dying without a will in North Carolina and the pitfalls of the probate process in North Carolina; however, many of the “worst-case” scenarios can be avoided with proper planning. Let us help you plan for emergency scenarios and protect your business and personal assets for the benefit of your loved ones through estate planning.
Unfortunately, COVID-19 has shown us that there are no guarantees, but it has also highlighted what is most important to each of us: family. Estate planning allows you to plan for what happens when you pass away, including naming a trusted person to handle your final affairs, name guardians for minor children, and distribute your assets according to your wishes. In addition to planning for death, our office drafts durable and health care powers of attorneys, where you can name agents to make both financial and medical decisions for you if you are incapacitated and cannot communicate.
There is no reason to wait to do planning, and as we age and the pandemic continues to be a part of our “new normal,” you should get a plan in place before it is ever needed. If you do become incapacitated or ill, it may be more difficult or impossible to get documents in place, as you must have testamentary capacity to create valid estate planning documents.
Some of our clients delay estate planning because they do not have any friends or family members they trust to serve in fiduciary roles. In some circumstances, members of the firm may serve in these roles for the client if the client feels comfortable. It is better for you to take control and name someone yourself than to have the government appoint someone in an emergency or when you pass away.
National Estate Planning Awareness Week is a great time for you take CONTROL! Please call Jesson & Rains if you have questions about getting your estate plan in order or updating an existing estate plan. While You Build, We Protect.
By Attorney Kelly Jesson
North Carolina has a procedure whereby the surviving spouse can claim an “allowance” when their spouse dies, allowing them to obtain, free and clear of any creditor claims or expenses, their deceased spouse’s singularly owned personal property up to $60,000 less any liens or encumbrances. Any jointly owned property will automatically become the surviving spouse’s and is excluded from the $60,000 cap. If a deceased spouse had real estate only in his name, the surviving spouse could not use the spousal allowance to get the real estate and would then have to resort to the probate process. The spousal allowance law applies whether or not the deceased spouse had a will.
The benefits of the spouse allowance statute are clear. Example: you and your deceased wife own a house jointly and own joint bank accounts, but she had a car in only her name worth $30,000 and a stock account in only her name worth $20,000. She also had a $20,000 Macy’s credit card bill in only her name. You can go up to the courthouse with proof of her death and proof of your marriage, fill out a fairly simple form, pay $20, and leave being able to transfer those two items to you directly. There is no need for a costly and time-consuming probate proceeding. Additionally, Macy’s will not be paid.
It is very important to note that a surviving spouse only has one year to file a claim for the allowance. There are no exceptions to this rule. If the deadline had been missed in the above example, the stock would likely have to be sold to pay the Macy’s debt. Also, there is a $5,000 child’s allowance available for children under the age of 18 or certain children over age 18. Finally, government entities may not recognize the state statute, so debts like taxes may still be owed.
If you or a loved one need assistance with the probate process, please give Jesson & Rains a call!
By Tony Cline
We say this over and over again: everyone needs a will to direct who gets their property when they die and avoid the default inheritance laws of this state. But the truth is, for some people, dying without a will and having their assets go to their “intestate heirs” is okay by them. However, in a country where families are having fewer children, and people are making the decision to cohabitate without getting married, the number of people who will leave behind no intestate heirs will only increase in the future.
If you die without a will and with no intestate heirs, your assets will “escheat” to the state, meaning that all of your property, real, personal, and intangible, will become the property of the state of North Carolina.
If you have no intestate heirs and do not want the state to take your assets, you must have a will. Even a simple will can prevent escheat by naming the desired recipients for your property. Oftentimes, people without intestate heirs will choose a charity, which they prefer over the government. Even if you currently have intestate heirs, there is no guarantee they will survive you, so naming backup beneficiaries can help prevent escheat. If you need assistance with drafting a will, call Jesson & Rains PLLC for assistance.
By Meg Abney
Cryptocurrencies like Bitcoin have gained popularity with investors for years, and around 16% of Americans now report that they have invested in or traded cryptocurrency (crypto). Most of these cryptocurrencies use decentralized networks based on blockchain technology—essentially a ledger that is enforced by a large network of computers.
However, the decentralization that makes crypto so popular also means that failure to plan for death or incapacity can prevent your loved ones from accessing your digital assets. Taking advantage of the blockchain now shouldn’t mean blocking loved ones from inheritance in the future. Read on for some estate-planning tips to help protect your assets.
What happens to my crypto when I die or become incapacitated?
Like funds in a bank account, cryptocurrency remains wherever it was stored, usually in a digital wallet or with a third-party holder. But unlike a bank account, your executor or agent under a Power of Attorney cannot simply request access to these funds upon your death or incapacity. Instead, you will need a method to provide your executor or agent with your keys and seed phrases. Failure to do so could mean that your loved ones never see these funds.
Can I just leave my crypto in a will?
Yes, but your executor will still need to gain access to it, and remember that your will becomes public record, so you should not include any sensitive information regarding your cryptocurrency. A simple way to communicate this information is by drafting a separate “access plan” that you keep with your will that describes your digital wallets, passwords, keys, and seed phrases.
What is the best way to plan for the future of my crypto?
While everyone’s situation is different, establishing a living trust is one of the best ways to ensure that your digital assets are not lost after your death. Some distinct advantages of establishing a trust for your cryptocurrency include:
With a living trust, you continue to maintain control over your cryptocurrency during your lifetime. After death, your successor trustee administers your trust according to your instructions. Setting up a trust involving cryptocurrency can be complicated, so it is best to consult with an experienced estate planning attorney. Please call Jesson & Rains if you have questions.
By Associate Attorney Danielle Nodar
There are plenty of things new parents need to tackle on their to-do list to provide the best environment and future for their child. However, one big thing that often gets overlooked is planning for the unexpected with estate planning. Some of the factors new parents should keep in mind when considering estate planning are:
1) Naming a Guardian for Minors
One of the most important considerations a parent can make is naming a legal guardian for their minor children. A guardian is the person who will assume responsibility for all aspects of your child’s care if they are under eighteen when you pass away. This person will make all medical decisions, educational decisions, and step into the role of the parent in the eyes of the law.
In North Carolina, the only way a parent can designate a guardian is through their Last Will and Testament. A guardian named in a will is usually appointed by a court unless the person is unfit or incapable. Without a named guardian in a will, a court chooses the guardian based on its determination of what is in the best interest of your child. This may result in loved ones arguing over your children or the guardian being someone you would not have chosen.
2) Managing Inheritance for Minors with Trusts
If you leave assets outright to a minor child, those assets will be kept in a custodial account to be managed by a surviving parent or legal guardian. The adult in charge will manage the money for the child’s benefit until the child turns eighteen or twenty-one and inherits the remaining assets outright. Even when a child reaches the age of majority, many parents worry about a child’s ability to manage finances on their own, especially if it is a large amount of money being inherited. To have more control over your child’s inheritance, many parents set up a trust for the benefit of their children. Parents can create a trust with either 1) a revocable living trust, which is a separate trust agreement that is funded by the parent with their assets during their lifetime or 2) a testamentary trust, which is created in a will and only goes into effect at the death of the parent.
Both types of trusts allow the parents to name a Trustee to manage any inherited assets for children until the child inherits outright at a later age, such as twenty-five, for example. The Trustee will manage the assets and make distributions of the funds for your children’s health, education, maintenance, and support according to the terms of the trust. You can determine how much discretion you give the Trustee is managing the trust, and you can also provide them with clear guidelines of what are permissible expenses.
3) Updating Beneficiaries on Financial Accounts
If you have accounts that allow you to name a beneficiary, such as life insurance, retirement, or investment accounts, those funds will automatically go to the named beneficiary, even if your will names different beneficiaries. If you are creating or updating your will to include children, it is important to review your beneficiary designations to make sure that those assets will go where you want them to and that your plan works with both your will and beneficiary designations.
4) Updating Your Living Documents
Another key part of estate planning is naming who would make legal or medical decisions for you in an emergency where you cannot make those decisions for yourself. By naming agents under a healthcare power of attorney and durable power of attorney, you can ensure that if you become incapacitated, someone you trust can access your funds to care for you and your child and make medical decisions for you until you recover.
5) Considering Life Insurance
Many new parents consider life insurance to ensure funds are available for your children’s needs if they pass away while their children are still young. There are many factors to consider when looking into life insurance but finding a trusted insurance professional to assess your family’s specific needs is the first step in the process. Finally, if you do create a trust for your child, you can name the trust as a beneficiary of the life insurance policy, which would allow those funds to be used by the Trustee for your child’s benefit according to the trust’s terms.
If you have questions about how to create or update your estate plan to best protect your family, please call Jesson & Rains!
By Attorney Kelly Jesson
We previously wrote about the importance of keeping good business records in order to avoid personal liability for business debts. However, did you know that certain business records can act as estate planning tools?
Your interest in your business, whether an LLC interest or corporate stock, is personal property that you can leave to a family member when you pass away. Unfortunately, it will go through probate unless you transfer it to a trust or enter into a transfer-upon-death (TOD) or joint with rights of survivorship agreement with your heir. The court collects a fee based on the amount of personal property that goes through probate, so if your business is worth some money, you want to avoid this.
What if you have a business partner? Perhaps you don’t want to do business with his/her spouse or child if your partner passes away? That’s where an operating agreement or a shareholder’s agreement comes in handy—in either of these agreements, the owners can agree that if one of them passes away, the other will buy out their interest. This is helpful for the survivor, who will remain in control of the company, and this is helpful for the deceased owner’s family, who will get a sum of money. These agreements (also called buy-sell agreements) are oftentimes funded with life insurance, to ensure that there is liquid cash available to pay the family.
In either of these agreements, the owners can promise the other not to transfer their business interest to third parties while they’re alive, which is also helpful for control purposes. The parties can agree to buy the other out when other “triggering events” happen, such as a partner’s bankruptcy or divorce. You don’t want one of these events to cause the forced sale of all or part of the business. It is important to put a plan in place to prepare for the unexpected (that frequently happen).
If you or someone you know needs assistance putting an operating agreement or shareholder agreement in place, or incorporating their business into their estate plan, please give Jesson & Rains a call! We offer flat fee packages for these formation documents. We also offer flat fee annual plans that include preparing annual meeting notices and minutes, filing annual reports with the Secretary of State’s office, and other legal services. More information can be found here.
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