Don’t Leave a Mess for Others to Clean Up

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If something happened to you tomorrow, would your loved ones be able to take care of business or easily wrap up your affairs? There are many steps that you can take now to make the process go smoothly for your family when the time comes, such as ensuring that you have good legal documents, creating a financial roadmap, discussing funeral arrangements ahead of time, as well as reviewing/changing beneficiary designations.

To begin, probate is the process through which the Clerk of Superior Court authorizes the executor to transfer property from the decedent to those who are supposed to receive it, either by will or intestacy.  If you die without a will, then North Carolina will probate your property differently than most expect. Your spouse will receive a portion of your money or property, and your children will also inherit amounts that the state deems appropriate. This amount varies from one family to another. Since this is contrary to most people’s wishes, it is important that you see an experienced Elder Law attorney to draft a will to avoid intestacy.

Additionally, probate fees can be expensive, even for modest estates. By using revocable trust based planning, you can avoid large probate costs, which are based on a percentage of the estate.  Even simple trusts allow you to avoid probate costs. Make sure that you have good documents in place when the time comes.

Another important step is to create a road map detailing how to gain access to your financial accounts.  Many people today deal with financial institutions electronically, paying bills and managing bank accounts online. If you no longer receive statements in the mail, or if your loved ones are not intimately familiar with your financial information electronic banking creates a huge problem for those responsible for preparing an inventory and making sure your bills are paid or stopping inappropriate charges after your death. For these reasons, it is important to leave family members a list of your accounts, usernames, and passwords so that they can gain access when the time comes.

It is also a good idea to discuss funeral arrangements with loved ones, such as whether to be cremated or buried, so that your family knows your wishes ahead of time.  Your will is the wrong place to do this type of planning, as most people are already buried by the time the family examines the will.

Lastly, be sure to revisit your beneficiary designations on life insurance, IRAs, 401ks, etc. to make sure that they are still current. Oftentimes, a spouse is listed as the primary beneficiary but we fail to put our children as alternate beneficiaries. After a divorce it is particularly important to change those designations, because your beneficiary designation (even to your ex-spouse) will prevail over your Will. If your spouse predeceases you, and no alternates are listed, the assets will be paid to your estate and be subject to your creditors and court probate fees. Assets left to a beneficiary are not subject to creditors and constitute a protected transaction. For this reason, make sure that your beneficiary designations are up to date.

Contact an experienced Elder Law attorney today so that your loved ones will be able to easily handle your affairs at your passing. Be sure to return if there are any major changes, and then update your plan every 3-5 years.  Contact W.G. Alexander & Associates today!

Attorney Bill Alexander discusses these issues and more every Tuesday morning on W.G. Alexander & Associates’ radio program, “Asset Protection Today,” on TalkRadio 850 WPTK (AM). Be sure to listen tomorrow  from 9:00-10:00 AM.  To listen to last week’s show, please visit WPTF’s on demand show blog by clicking here.