The Role of Wills in Your Estate Plan
Estate planning on your own can result in unexpected pitfalls, but having the right information and working with a professional who knows the ins and outs of estate planning wills is certain to streamline the development of an air-tight estate plan that ensures your loved ones are taken care of and your assets are distributed according to your wishes after death. The expert estate planners at Craig Associates, PC, are here to help you understand the components of estate planning.
Understanding Estate Planning and Wills
We almost always recommend a trust instead of a will to secure your financial legacy, as the only way to avoid probate (which we explain further down) is if you have a properly funded trust. For more information, register for one of our free estate planning seminars or call us at (828) 258-2888 for more details.
What is Estate Planning?
Estate planning is arranging the management and disposal of your estate during your life and upon your passing. Your estate plan may include some or all of these components:
- Powers of appointment
- Property ownership
- Joint tenancy with rights of survivorship
- Tenancy in common
- Tenancy by the entirety
- Powers of attorney
The Importance of Estate Planning Wills
Estate planning wills are legal documents that specify how you want your property and assets distributed after your death; simply put, who gets what and when. Having estate planning wills allows you to name an executor who will oversee the distribution of your assets and manage other responsibilities associated with your estate. Without an estate planning will, North Carolina law will determine how your assets are distributed, which leaves your family hanging in the balance and your personal wishes a moot point.
Components of a Comprehensive Estate Plan
Estate Planning Wills
Estate planning wills give you control when you are no longer here to speak for yourself and take care of your family. Making sure your hard-earned assets are handled how you want is certainly important, but estate planning wills can also be used to name a guardian for your minor children. A parent’s death is particularly hard on young children and, with this step, you can ensure your children will be taken care of by a person you trust. We understand that these scenarios are hard to think about, however, not having estate planning wills in place can easily increase the extent of real-life issues your children will have to endure without your help. If a guardian isn’t named and both parents die, the court will appoint a guardian.
Trusts: Revocable and Irrevocable
Trusts can be revocable (the trust-maker can change or cancel them) or irrevocable (the trust-maker cannot change or cancel them without the beneficiary’s permission). A trust allows the grantor (the person who creates the trust) to protect their assets from taxes, lawsuits, etc., provide for their loved ones, and potentially avoid probate.
The Role of Beneficiary Designations
Beneficiary designations stand separate from your estate planning will; you can designate beneficiaries in individual life insurance policies, retirement accounts, and certain bank accounts. With each of these asset types, you should plan periodic checks on named beneficiaries to ensure they go to the person or entity you want to receive the asset when you pass away.
The Power of Attorney
A power of attorney (POA) legally appoints a person you choose to manage your property and make financial or medical decisions should you become unable to do so.
Living Wills and Healthcare Directives
A living will, or a healthcare directive, gives you control over your emergency and end-of-life medical care, in case you become unable to communicate your decisions. A living will provides the comfort of knowing your healthcare provider and family knows your wishes should a situation like this arise.
Creating Estate planning Wills
Why Do I Need Estate Planning Wills?
If you pass away without a will—known as dying intestate—state laws determine how your property is distributed and this will likely not be in your personal best interest. Estate planning wills ensure your wishes are fulfilled after your death and your family is cared for in the way you envisioned.
What Should Estate Planning Wills Include?
Estate planning wills should clearly state how you want your property and assets distributed after your death and name who is in charge of making sure your wishes are exactly carried out. Estate planning wills should also name a guardian to care for your children if they are under 18 years old.
Choosing an Executor for Estate Planning Wills
The role can be demanding, so choosing someone who is fully capable of handling these responsibilities is crucial. People often choose a spouse, a family member, a close family friend, or a third-party executor (to lessen the burden that their death—especially if sudden—will bring).
Trusts and Wills
The Differences Between Estate Planning Wills and Trusts
Estate planning wills and trusts serve different purposes and have different benefits. Estate planning wills outline who will receive your property and other assets after your death and appoint a legal representative to ensure your wishes are carried out. A trust, on the other hand, can bypass probate, which can save a significant amount of time, money, and the court process.
Why Would You Choose a Trust over a Will?
Trusts allow your beneficiaries to get the goods as quickly as possible, keep your business private (trusts do not become public records like wills), and can help minimize estate taxes.
Navigating the Probate Process
The Role of Estate Planning Wills in the Probate Process
The probate process begins after a person dies; the will is validated, their assets are identified and inventoried, their debts and taxes are paid, and the remaining assets are distributed as their will (or the state, if there’s no will—yikes!) directs.
How to Avoid Probate with Estate Planning Wills
Careful estate planning can help avoid the probate process by establishing a revocable living trust, designating jointly-owned property, or detailing beneficiaries on your accounts.
Updating Estate Planning Wills: When and Why?
Life Events That May Require Changes to Estate Planning Wills
You’ll need to change your will after life events, such as marriage, divorce, childbirth, or beneficiary death. Don’t worry—changes to estate planning wills are typically quick and easy to make.
Keeping Estate Planning Wills Up-to-date
Aside from life events, it’s a good idea to review your will every few years to ensure your estate planning will still aligns with your wishes and financial situation.
Estate Taxes and Estate Planning Wills
Understanding Estate Tax
The estate tax, also known as the “death tax,” is a tax on transferring a deceased person’s estate before distribution to the heirs. Estates valued below the exemption amount set by law do not require payment. North Carolina does not currently have an estate tax; however, some estates may still be subject to federal estate tax if the value exceeds a certain amount.
Estate Planning Wills in Asheville
Don’t leave the future of your assets and loved ones to chance; secure your legacy and provide your family with true peace of mind. Contact Craig Associates, PC at (828) 258-2888 to schedule a consultation with experienced estate planning attorney, Chris Craig, today. Still wondering if it’s worth it to hire an estate planning attorney? Don’t take our word for it, read reviews from actual clients!