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Estate Planning…But I Don’t Have an Estate?!?!

Estate Planning…But I Don’t Have an Estate?!?!

  • April 25th, 2014

When I tell someone that I am an estate planning attorney I often hear some variation of the title to this blog post. I have a sense of humor and I realize that this may simply be a witty retort, but I hear it frequently enough that I’ve come to realize that this is the genuine attitude of large portion of the public.

The purpose of this blog post is to inform you of two realities: first, if you own any property – a car, a house, or a bank account – or if you have a retirement plan or life insurance policy, then you have an “Estate.” Second, if you are a resident of North Carolina (or practically any other state for that matter), then you have a default “Plan” established by the State.

Your choice is whether you want to direct where and how your property is used after your death, or whether you prefer to leave the process to the one-size-fits-all default rules. This is what we refer to as Estate Planning – and it has a very real application in all of our lives.

For example, like myself, many clients of mine are parents of young families.  Most younger families are in the relatively early stages of saving for retirement, funding college funds, and generally accumulating wealth. Notwithstanding their financial status, Estate Planning can have a substantial long and short-term impact on their children’s wellbeing in the event of tragedy. With proper Estate Planning, parents can achieve the following critical objectives in addition to a multitude of other goals:

  • Guardian Appointments: Parents can recommend a guardian of their children in a Will, and North Carolina law accords “substantial weight” to the guardianship recommendation. Without this critical recommendation, the Clerk of Court is left to make a guardianship determination that is in the best interest of the children without the benefit of what would otherwise be the single biggest determining factor.
  • Protecting Assets for Children: Parents can pay their estate, including life insurance proceeds, retirement benefits and other assets into a Trust created under their Wills. In addition to other advantages, with a Trust these assets can be: (1) managed by a trustee of the parents choosing without unnecessary court oversight and expense, (2) used for purposes designated by the parents, and (3) paid to each child once reaching a suitable age (25 or 30, for example). Without the use of Trusts under the parents Wills, these assets can be subject to onerous court oversight and associated costs, and in any event will be paid to each child upon turning 18 years of age – an age at which few are prepared to responsibly handle money needed to fund education and support for several additional years.

If you would like to discuss other advantages or the specifics of your situation, please give me a call at (980) 228-9750. I look forward to hearing from you!