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“Hopefully I won’t need an estate planning attorney!” . . . No, hopefully you will.
But seriously y’all – let’s hope we all “need” to have an estate plan in place. Let us all hope that when that day does come (very far off in the distant future) we have loved ones we want to give our assets to, have assets to give, and aren’t so apathetic that we are happy to let the government decide what to do with our things and where our minor children should live.
Can A Revocable Living Trust Help My Business Run Smoothly?
If you own a closely-held business, a Revocable Living Trust might be a great tool to consider – as it gives you the ability to transfer your business interests into a trust.
Typically there will be a gap between the date of death and the appointment of an executor to handle your estate during the probate process. This time gap can cause problems with a business running smoothly and in extreme cases can lead to your business dying with you.
As a way around this, business owners can transfer their interest in the business into a Revocable Living Trust. When the owner dies, the successor trustee can continue to run the business in a seamless manner and without delay.
Since the owner will only be transferring the business interest (as opposed to the actual business) into the trust – there won't be any major functional differences when running the business. At the same time, in the event that something happens to the owner, business employees or others who rely on everything running smoothly won’t suffer the consequences of a time delay in the event of the owner's death.
Whether or not to create a Revocable Living Trust will vary from person to person based on their needs and estate planning goals. If this is something you would like to learn more about, feel free to reach out to us so we can discuss it further.
Planning For Incapacity
While it is never something we want to consider, planning for incapacity is an important part of making an estate plan. There are many methods and tools available to make sure that your wishes are respected and that the people you trust the most will be the ones making important decisions on your behalf.
Some useful tools to consider include:
- Health Care Power of Attorney: A health care power of attorney becomes effective after a physician determines that you are unable to make or communicate health care decisions yourself. It is a legal document giving authority to the person (or people) of your choosing who you trust to make medical decisions on your behalf.
- Advance Directive / Living Will: A living will is the legal document that you can use to direct whether you want your life prolonged in specific circumstances. It is a great way to be able to direct your health care power of attorney so that they can best champion your wishes in the event that you cannot make them clear at the time.
- Advance Instruction for Mental Health Treatment: An advance instruction for mental health treatment works much like an advance directive or living will, but instead applies when one lacks the capacity to make or communicate mental health treatment decisions. This document gives your appointed agent the power to make decisions regarding mental health treatment – and includes specific directions for your agent to follow regarding the use of medication, shock treatment, and/or admission to a mental health facility.
- Power of Attorney: A durable POA is a great choice for many people as it allows for you to appoint an attorney-in-fact who can basically step in to your shoes and act on your behalf with regard to your financial affairs.
- Revocable Living Trust: While you can be your own trustee of your RLT during your lifetime, you can also appoint a secondary, or successor, trustee to take over in the event of incapacity. Since a trustee only has power over the property held in trust and subject to the trust document itself, the grant of power is generally less broad than a POA, creating an RLT may be an option to consider if you want to put greater restrictions on the actions of your attorney-in-fact.
- Standby Guardianships for Minors: if you have minor children but become incapacitated, having a standby guardian for any minor in place can ensure that the people you trust the most will be able to fill in for you to make decisions on behalf of the child.
We highly recommend that you put a plan in place so your wishes are followed in the event of incapacity, and perform periodic reviews of your documents to make sure nothing needs to be changed or updated.
"What does all of this stuff mean?"
New NC DMV updates are coming January 1, 2017 . . . And they may help you avoid probate.
Titling a Car as Joint Tenants With Right of Survivorship
Your vehicle may be one of your most valuable assets, next to your home, that you own. If you rent, it may be your most valuable asset. If something happens to you, what will your partner or spouse need to do with it? Will they need the cash value of the vehicle to pay for your expenses? If so, it might require that several probate hoops be jumped through in order to sell it. In this situation, wouldn’t it be nice if you could just take the title and death certificate to the DMV? Well, owning a car as joint tenants with right of survivorship would allow just that - and is about to get easier as of January 1, 2017.
First, owning a car with your spouse/partner/family member as joint tenants with right of survivorship (JTWROS) means that, upon the passing of one of the joint tenants, ownership will be consolidated in the surviving tenant. Functionally, for estate planning purposes, this means that when one owner passes away the car is wholly owned by the survivor.
Second, this allows the car to avoid the probate process. Generally, if just you or your partner own the car separately, ownership will not pass until the probate process is completed. This can take a lot of time depending on the size and complexity of the estate.
Third, titling a car (or other vehicle) as JTWROS in NC is totally doable and about to get easier. For sometime now, the DMV has allowed people to to write in the designation “JTWROS” on the certificate of title application. As of January 1, 2017, the form will contain a “preprinted option” for co-owners to choose JTWROS.
Curious how this will impact you and your loved ones? Feel free to reach out to us to discuss it all in more detail.
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“Making an estate plan tells the people who love me that I love them, too”
We recently met with someone who shared a bit about a difficult experience handling the estate of a loved one who had no estate plan in place.
This conversation reiterated the importance of having a plan in place – even if the estate isn’t so large that it will need a trust or other complex planning. Consider all of the details that your loved ones will face if you haven’t planned – such as accessing your house and caring for your pets, trying to work with doctors to determine who can make health care decisions on your behalf, weighing the heavy decisions about what health care decisions you would even want, trying to guess whether you would want to be buried or cremated, and then working with the court system to try to determine how your assets will be distributed under the laws of intestacy.