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Steps to Create a Estate Plan

Our Raleigh estate and elder law attorneys are committed to honoring the life, work and charity of every individual.

6 Steps for Estate Planning in North Carolina

steps to create estate plan

To create an estate plan is to execute legal documents that set out what you want done with your money and property upon your death. It also can make clear your wishes regarding medical care if you become incapacitated and cannot make your wishes known. An estate plan outlines the distribution of assets to your heirs and makes provisions for paying estate taxes and other debts.

When done correctly, estate planning is more than a set of documents. It is the final act one does for their loved ones, providing them financial security as well as a sense of your values. Regardless of your financial status or age, you have assets that constitute an “estate.”

Brady Cobin Law Group has helped countless North Carolina families plan for their future, navigate the legal system during times of loss, resolve inheritance disputes, and protect loved ones who are not able to provide for themselves. We are proud to have helped many clients develop estate plans and modify their plans to reflect changes in their lives.

Below we outline six basic steps in the estate planning process. Please contact us at (919) 782-3500 in Raleigh today to schedule a consultation with a knowledgeable North Carolina estate planning attorney to discuss how we can help you.

How to Plan your Estate in North Carolina

Step 1. How to Find an Estate Planning Attorney.

Estate planning is a legal process that is detailed, highly complex, and time-consuming therefore it is important to know how much does estate planning cost. Estate planning should address taxes and other expenses that will be assessed upon your death. The lack of proper planning can cost your survivors the money you had hoped to provide them.

A qualified estate planning attorney will take the time to understand the big picture of your family’s needs and your desires. You should select a lawyer with whom you feel comfortable discussing your wishes for the future. Contact an attorney with training in estate planning and ask about a free initial consultation. Ask about the attorney’s professional background and experience and how they charge (per hour or per task). Find out about their availability after your estate plan is finished. Lives progress and circumstances change. Make sure you are dealing with a lawyer or law firm that will be there for you and your family down the road if your circumstances change.

Step 2. Make a list of what you own and owe.

The greater part of an estate plan is how you will pass on your wealth to your heirs. To determine your net worth, add up the value of your assets (money, transferrable income, and sellable property) and your liabilities (debts, such as mortgages, other loans, credit card balances) and then subtract liabilities from assets. Determining your net worth will help your lawyer assess whether your estate will be liable for any federal or state taxes. If there is a tax liability, there are steps an asset protection lawyer can help you take to reduce or eliminate estate taxes.

Step 3. Consider whether you need a will or a revocable living trust.

Many people scoff at the idea of establishing a living trust, thinking a trust requires great wealth. In reality, a revocable living trust is simply a legal vehicle for managing assets deposited in the trust. There’s no minimum amount of money required. When planning for the transfer of assets to the next generation, we often find that a trust offers advantages over a will.

Primarily, a trust eliminates the need to go through probate, the court-supervised process of validating a will and empowering an executor to distribute assets as prescribed in the will. Probate can take a year or more. If there are problems with a will, it can become expensive, as well. A revocable living trust names a trustee who automatically takes over management of the trust’s assets upon your death in accordance with the trust document and its requirements. The trustee administers the trust and distributes assets to beneficiaries of the trust, as directed, with no court or attorneys involved.

On the other hand, you can say more with a will. Some plans incorporate both a will and a trust. A will can name guardians for underage children and provide additional instructions for how and when assets will be distributed. Wills are often used to direct and explain the distribution of personal property. If for some reason you would like to disinherit a spouse or child, you would do so through a will.

If assets from an estate are to go to underage children or an adult child with disabilities or other issues, a testamentary trust could be established to manage assets on behalf of these heirs. A testamentary trust is established in accordance with instructions contained in a last will and testament and might require that assets be used toward education and provide ongoing income. In addition to ensuring professional management of assets passed along to heirs, a testamentary trust reduces estate tax liabilities.

Step 4. Establish a health care directive.

You can also look after yourself with proper estate planning. A health care directive also called an “advance directive” or a “health care power of attorney,” lets you state the kind of medical care you want and/or who you want making decisions for you if you become incapacitated. You can state what life support measures should be taken, such as cardiopulmonary resuscitation or placing you on a ventilator.

Having a health care directive on file and, preferably, in the hands of loved ones who would respond to you being stricken, makes your desires known and enforceable. Without a plan in place, you could find yourself disabled and placed under court-supervised guardianship or conservatorship and with your family no longer having a say about you or your assets.

Step 5. Identify your beneficiaries.

Your beneficiaries are people or organizations (charities, schools) that will receive assets owned by you after you die. Property you own jointly, such as with your spouse, will automatically become the co-owners property in most cases. Other assets, such as insurance policies and retirement accounts in your name, will go to beneficiaries designated in documents that established those accounts.

Naming a specific beneficiary for each transferrable account ensures the proceeds will go to them and not be affected by a will or probate proceedings. A named beneficiary does not necessarily have to be an individual. If you plan charitable giving, you might name an organization as the beneficiary of a specific account, insurance policy, or trust. Your estate itself might be named the beneficiary of an account to ensure its proceeds are available to pay debts or taxes and/or to be divided and distributed among your heirs.

Step 6. Make your plans known and organize documents to be left for loved ones.

Estate planning is a gift you give to your family after you are gone. It relieves them of difficult decisions and, potentially, arguments at an emotional time. It will save them money that would otherwise be spent for help doing the work you have already done. But they need to know it exists for them to benefit from it.

Once you have completed an estate plan, advise your closest family members of your general plans and decisions regarding the executor of your will and/or trustees, powers of attorney, and healthcare desires. Then provide them copies or access to important documents and/or digital files.

Among the information about you that one or more family member needs to be able to quickly access is:

  • Will
  • Trust
  • Power of Attorney
  • Names of professional services providers (attorneys, accountants, financial advisors)
  • Names of employers/business partners who should be notified
  • Necessary usernames and passwords for online accounts
  • Bank accounts and credit cards
  • Mortgages, loans, and unpaid taxes
  • Vehicle titles and deeds to real property
  • Insurance policies (life, health, auto, home, etc.)
  • Pension plans and retirement accounts (401(k), IRA, Roth IRA)
  • Investment portfolios (stocks, bonds, mutual funds)
  • Safe deposit boxes and/or other secure or hidden storage of valuables
  • Funeral plans (prepayments – especially for plot(s), arrangements and whom beyond family to notify)
  • Automatically renewing medications (medication names, pharmacy and prescribing doctors)
  • Subscriptions to be discontinued (cablevision, streaming services, online accounts, periodicals, household services)

Why is Estate Planning Important

receiving counseling on estate planning

The most important step for estate planning is to decide to get it done. The need to have an estate plan in place will come, and it comes unexpectedly for people just like you every day. Take the opportunity now to plan ahead and leave clear instructions about your wishes for the distribution of your property and assets

The Brady Cobin Law Group has decades of experience in estate planning and can lead you through the steps necessary to craft a plan that protects your family’s future. Don’t wait. You’ll love having it done. Contact us today to start your estate plan.

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