A quick breakdown on estate planning from a Charlotte lawyer

If there’s anything we’ve learned in 2020, it’s that life can be unpredictable. Creating an estate plan is one way you can prepare for the future, no matter how uncertain it may seem right now.

It’s not super fun to think about what happens when your life ends, so it makes sense why many people put off creating a Will. “I’ll deal with that when I’m older or have kids,” is something I like to tell myself when I think about the fact that I don’t have any kind of plan in place. It’s like putting off going to the doctor. I know I should do it, but I don’t want to.

While creating an estate plan might not be the most exciting item to tackle on your to-do list this summer, it’s a pretty important thing to have locked down.

I talked to Mary Kay Baynard, an attorney at James, McElroy & Diehl, to get a lesson in estate planning 101. It turns out, estate planning is a lot more than just who gets your stuff when you die. Here’s everything I found out.

When most people talk about estate planning, they’re talking about a Will.

Estate planning sounds fancy, but it’s basically just an examination of your financial and family situation, and then a collection a collection of documents to help the people who survive you navigate your assets and leftover responsibilities in the event of your passing as well as allow others to manage your affairs in the event of your incapacity. Included in that collection of documents is what Baynard calls “A Last Will and Testament.”

“This is the legal document that directs how your assets pass at your death,” she says. In addition, you’ll appoint an executor. The executor is the person who will be responsible for gathering all your assets and distributing them according to your Will. This could be a spouse, child, or sibling.

If you have minor children, your Will would also name whoever you’d want to serve as the legal guardian. The guardianship naming is mostly a suggestion. The final decision would be made by a judge in a guardianship hearing, according to Baynard.

Depending on your family and financial situation, your Will might also include a Trust.

Baynard says, “This will allow your assets to be managed and controlled by a trustee until your beneficiaries reach an age when you are comfortable with them managing those assets on their own.”

If you don’t have a Will, it’s all left up to the state.

Thats right, “Absent a Will with such directions, all assets without a beneficiary designation will pass to those individuals determined by North Carolina law,” says Baynard.

Things can get complicated when it comes to life insurance and retirement accounts.

In addition to your estate planning documents, you’ll want to make sure the correct beneficiaries are named on your individual life insurance and retirement accounts.

Baynard says many people think that these types of accounts are governed by the Will but that’s not the case. “For any asset that has a beneficiary designation, the beneficiary designation controls who receives that asset, not your Will,” she explains. 

Estate planning documents typically include Powers of Attorney.

“Under a General Power of Attorney, you appoint an agent to manage your financial affairs in the event you do not want to do so yourself or in the event you are incapacitated,” says Baynard. She also says you can appoint an agent under Health Care Power of Attorney (this is a separate document) to make health care decisions in the event you’re unable to do so.

It’s also worth noting that the agent under a power of attorney is only able to act while you’re alive. Once you’ve passed, the responsibilities would lie on the executor of your estate, but you can appoint the same person to both positions.

There’s also something called a “Living Will”.

Baynard explains, “this document addresses end of life decisions, such as withholding or withdrawing life prolonging measures.” For example, if you’re in an accident and declared legally braindead, this document would inform medical providers whether you’d want to be kept alive through a feeding or breathing tube or if you’d rather pass naturally.

In addition to a Living Will, there’s also a HIPPA form you can include in your estate plan that would allow health care providers to release your health care information to those you name in the document, despite federal privacy laws.

Creating an estate plan isn’t a super difficult process.

Getting started is pretty easy. “The estate planning process usually starts with the completion of a questionnaire, which sets out the nature of your assets and includes space to provide to whom, how and when your estate should be distributed,” says Baynard. “Generally, drafts of documents can be drawn from the information provided in the questionnaire and then sent to you to review.”

Basically, you fill out a questionnaire and the attorney can start drawing up your plan. Then, once all of the documents are finalized, Baynard says “There will be an in-person meeting where the documents are executed in compliance with North Carolina law.” She says on average, it takes about 2 months, from start to finish, with little hands-on time needed from the client.

There’s no “right time” in life to create an estate plan.

“Anytime you have any assets and you want to direct who gets what, you’ll want to have a will,” says Baynard. You don’t need to wait until you have a family or you’ve reached a certain stage in life.

Some of the documents could be relevant during your life. Baynard says, “The reason we try to go ahead and get all of these documents in place when the Will is done is that if someone becomes incapacitated and say, in a coma or has dementia, it is too late for them to execute a document stating who they want to make decisions for them.” Basically, it’s important to have a plan in place no matter what your current circumstances are.

Along with estate planning, JMD offers a service called Estate Administration as well.

Estate administration is a service that helps people navigate the legal process of settling the estate of a loved one. It can be a stressful, emotional time so Baynard helps clients submit documents to the courts and make the whole experience run as smooth as possible.

In addition to the documents above, Baynard recommends keeping a notebook or folder with important information.

The notebook or folder should include:

• The location of your original estate planning documents.
• A list with addresses and phone numbers of anyone you name in your Will, people who you would like notified of your death, and any people who help you (your accountant, cleaning service, vet, manager of your rental properties).
• A list of all accounts in your name, including retirement and insurance information, with numbers and contact information for each of them
• A list of expenses you pay by electronic transfer and contact information for each.
• A list of passwords and information for online accounts, as well as for your computer.

If you’re interested in creating your own estate plan, JMD can help. Learn more about the process here.

This content was created in partnership with James, McElroy & Diehl, P.A.

The articles on this website are for informational purposes only and do not constitute legal advice. We hope that you will find the articles informative; however, you should contact an attorney to obtain advice with respect to any specific legal issue or problem, and should not act based upon the information contained in these articles.