NORTH CAROLINA ESTATE PLANNING BASIC UNDERSTANDING
CHERYL K. DAVID
North Carolina Estate Planning and Elder Law Attorney
Knowing Not Only Why Estate Planning Is Important, But Why It’s Important for You to Begin Planning
as Soon as Possible, Will Help You as You and Your Attorney Go About the Estate Planning Process
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Estate planning is one of those
areas of the law that very few
people have direct experience
with. It’s also an area that deals
with some potentially
uncomfortable topics and
questions, many of which people
can be reluctant to think about.
Combining these two factors means that there aren’t a lot of people who
have a good idea of what estate planning is all about, much less understand
why it’s so important.
In this first of two discussions on foundational estate planning topics, we
are going to take a look at some essential issues that everyone should
understand. Knowing not only why estate planning is important, but why
it’s important for you to begin planning as soon as possible, will help you as
you and your attorney go about the estate planning process. If you
understand what is going on and why, you will be much more likely to get
more out of the process than you would if you are a passive participant.
ESTATES AND ESTATE PLANS
The first concept about estate planning that everyone should understand is
that everyone has an estate. Whether you are a young adult who is just
starting out in life, raising a family, nearing retirement, or anyone else, you
have an estate whether you realize it or not.
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A lot of people are surprised to learn this because they incorrectly equate
the term “estate” with the idea of a large home or extensive land holdings.
In legal terms, an estate is not a large piece of property. Rather, it’s the
property left hind by a deceased or incapacitated person.
Let’s say, for example, that your grandfather is diagnosed with Alzheimer’s
disease. He quickly loses his ability to make choices, express himself, and
manage the property he owns. That property is known as his estate. If his
condition worsens and he should die, the property he leaves behind is
known as his estate.
Estate planning, therefore, is simply a process in which you look ahead to
the future and make decisions about how you want your estate to be
handled.nt differences.
ESTATE PLANNING ISSUES
Every capable adult has the ability to make an estate plan. You can, for
example, make choices about how you want to leave inheritances, who you
want to manage your estate after you die, or who you would like to manage
your affairs in the event you become incapacitated. However, you have to
make each estate planning choice in a legally recognized manner.
CHOICES
Let’s use the example from above. Your grandfather, who now has
Alzheimer’s disease, told you a few years ago that he wanted you, his only
child, to receive half of his property should he die, while the other half he
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wanted to give to his church. Your grandfather made this statement in the
presence of you and several other family members, and was completely
healthy at the time he made his wishes known.
A few months from now, your grandfather dies. Does this mean that you
now are legally entitled to inherit half of your grandfather’s estate, while the
other half will be inherited by his church?
Absolutely not. Even though your grandfather might have made his wishes
clear, unless he took the time to create an estate plan that recognized his
choices in a legally enforceable manner, his wishes will have nothing to do
with how his property is actually transferred as an inheritance. In fact, the
state of North Carolina already has laws that determine who inherits
property when someone dies without an estate plan. It is these laws, and
not your grandfather’s wishes, that will actually determine who inherits his
property.
CAPACITY
We can also use the example
of your grandfather to
illuminate another vital estate
planning concept, the
question of capacity. In other
words, who is capable of
making an estate plan? How
do you make one? When can you make one?
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As long as you are a mentally capable adult, you have the ability to make a
comprehensive estate plan whenever you like. It doesn’t matter if you are 18
or 80, it only matters if you are capable of making decisions and have
reached the age of majority.
In the example we have been
using, your grandfather
could have made an estate
plan as long as he remained
healthy. However, because he
was diagnosed with
Alzheimer’s disease, a disease that affects a person’s ability to make
decisions, his ability to make an estate plan probably disappeared once he
became ill, or some time thereafter.
In other words, while you can make an estate plan, you can only do so while
you are mentally capable. If you lose your ability to make choices, you also
lose your ability to take control over your estate.
ESTATE PLANNING REQUIRES GUIDANCE AND ADVICE
This brief discussion of some basic and essential estate planning concepts is
not intended to give you a comprehensive understanding of what the estate
planning process is like. Instead, it is designed to allow you to be more
comfortable with the process as you and your estate planning lawyer go
about creating a plan that fits your individual circumstances.
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The reality is that no one can create a plan on their own as effectively as
they would by seeking the advice and guidance of an experienced lawyer.
Even though many of the estate planning tools you and your lawyer will
create are relatively simple, that doesn’t mean you can create a plan without
assistance. There are numerous topics and issues running throughout the
estate planning process that can be very difficult for most people to get a
good understanding of in a brief period of time. Not only that, but new
laws, tax rules, and court decisions are constantly changing things.
If you want to create an estate plan, need legal advice, or simply have
questions you want answered, you should contact the Law Offices of Cheryl
David as soon as possible.
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ABOUT THE AUTHOR
Cheryl David is a graduate of UNC-Chapel Hill, the
University of Baltimore School of Law, and the
prestigious Trial Lawyer’s College presided over by
Gerry Spence. A former Administrative Judge, Cheryl
is certified as an Estate Planning Law Specialist by the
ABA accredited Estate Law Specialists Board, Inc. She
is also a member of the American Academy of Estate
Planning Attorneys, Medicaid Practice Systems and
the National Academy of Elder Law Attorneys.
In 2008, Cheryl received the honor of becoming a Fellow with the American Academy of Estate Planning Attorneys. The Fellow program recognizes Academy Members who demonstrate advanced expertise and significant practical experience in the total estate planning, trust, tax planning, guardianship, probate and estate administration fields. In order to maintain this advanced expertise, Cheryl takes over 36 hours of continuing education in Estate Planning, Elder Law, and Taxation each year. Also a Financial Planner, she holds the Series 7 and 66 Investment Licenses in addition to both Insurance and Long Term Care/Medicare designations.
Her professional capabilities, together with over 25 years in practice, have combined to bring positive change to the lives of over 4500 clients and their families.
528 College Road Greensboro, NC 27410 Phone: (336) 547-9999 Fax: (336) 547-9477
WWW.CHERYLDAVID.COM