Using Legal Documents to your Advantage

Legal documents, such as wills and powers of attorney, can help you control and protect your property. However, most fail to use their legal documents to their advantage. Many fail to realize that their legal documents don’t work the way that they expect or intend with their overarching estate plan. If done correctly along with proper planning, your legal documents can keep your family in harmony after your death.

First, we recommend that our clients have wills. Without one, the state will distribute your property in a way that you may not like at your death. Many assume that without a will, their spouse receives everything at their death, and then their children would inherit equally. However, under state law, a portion of your wealth will go to your spouse and a portion to your children if you do not have a will. Under current law, there are additional factors to determine how much your spouse will receive, such as how long you have been married and whether you have children together.

People often think that a last will and testament trumps every other document. While a will is important, this is generally not the case. For example, many husbands and wives own their property jointly. When a husband and wife own a home in North Carolina, the survivor normally will own the house as stated on the deed. This is the case regardless of what their Wills say. Likewise, if you leave everything in your Will to your spouse but designate your children as beneficiaries of your life insurance policy, your children will receive the life insurance. This is true regardless of the language in your will. Finally, if you have a joint account at the bank with one of your children, that child is entitled to half or all of the account. This is the case even if your Will leaves your assets to all of your children equally, because your contract with the bank trumps the will.

Legal documents are important for all stages of life. Parents with young children may have concerns about who would take care of their children in the event of a catastrophe. Creating a good plan involving a trust can control who will act as a guardian, where they will live, who will manage and invest their money, as well as how the money will be shared among the children. If a couple dies and leaves no instructions, the court must make these decisions for them, appoint a guardian, and put their money into a custodial account. The children will get the money when they are eighteen (an age at which they will likely spend it all). These are the kinds of pitfalls that proper planning can prevent.

As you grow older, you may need entirely different documents to help you maintain independence for as long as possible. Some of the documents that we prepare to help people stay in control are called powers of attorney. Both health care powers of attorney and financial powers of attorney help keep you in control, as your agent typically lacks authority to make decisions as long as you’re able to make them yourself. You get to choose the agent that you wish to make these decisions and can pick an agent that is likely to do exactly what you would want. You can give as much or as little control to your trusted agent as you wish. If you lack these documents and get to a point where you can’t make decisions, then a judge must decide who will act as your agent. It’s especially important to have a properly drafted general durable power of attorney as you reach your 70s, as without one, it’s not possible to do asset protection planning. However, most families have statutory powers of attorney, which give limited authority to the agent to make only limited decisions. These are better than no documents at all, but they do not provide asset protection. Few people have documents that allow a trusted agent to protect their property in the event that they cannot do so for themselves.

If you or your loved one needs assistance with your legal documents, or if you have questions about government assistance programs such as Medicaid or Veteran’s Benefits or other Special Needs programs, consider W.G. Alexander & Associates – we offer a unique blend of asset protection, Elder Law and estate planning. You can also attend our free seminars, learn more through our website at, or call us at (919) 256-7000. Also, every Tuesday morning at 9 am, you can listen to our radio show, “Asset Protection Today,” on Talk Radio 850 WPTK (AM) with Attorney Bill Alexander.