4 North Carolina Intestacy Laws Demonstrate Why You Need an Estate Plan
People put off creating an estate plan for many different reasons, and many have nothing to do with death being a dark and gloomy topic. In a survey conducted by Caring.com, an online resource for information about issues facing aging adults, respondents admitted that they put off making a will because:
- The laws are too complicated;
- Estate planning is expensive; or,
- They do not believe a will is necessary due to financial or family reasons.
If you find yourself agreeing with any of these factors, more information about the benefits of making a will may not dissuade you from your position. However, a different approach may convince you of the importance of having an estate plan: Realizing the harsh, unintentional consequences when you die intestate. Without a will, North Carolina law manages your final affairs and could lead to results you never expected. Your loved ones could endure hassles that run contrary to your intentions and ultimately diminish your legacy. You can trust a North Carolina estate planning attorney to handle the details, but you should understand how intestacy works.
- Descent and Distribution to Heirs: Perhaps the biggest impact for not having a will or other estate planning is how your assets are distributed to your heirs. When you do not have a plan in place, North Carolina statutes on intestate succession dictates who gets what – not you. The basic provisions are:
- A surviving spouse inherits everything if you have no children or living parents;
- Your children inherit all assets if you are unmarried;
- Your surviving spouse, children, and descendants of your children will split according to a statutory formula, from one-half to one-third depending on the details; and,
- Siblings and further distant relatives may inherit if there are gaps.
- Who Will Act as Personal Representative: Another important intestacy law in North Carolina focuses on who will act as administrator and handle your final affairs, since you do not have a will that names an executor. Again, the choice is not yours. The statute designates the following individuals, in order:
- Your surviving spouse;
- Anyone who would receive property under the intestate laws described in #1 above;
- Your next of kin; or,
- A creditor that you owe money.
- North Carolina Surety Bond Requirement: State law requires a bond before letters can issue to a personal representative, as a type of insurance policy to ensure the individual will uphold his or her fiduciary obligations. This bond can be expensive, running into the hundreds of dollars depending on the value of the estate; plus, this premium must be paid annually as long as the estate remains open. The statute allows you to waive the surety bond requirement via your will, but a court will typically still require it in an intestate estate.
- Outright Distributions to Heirs: Through proper language in your will, often in conjunction with a trust, you can place restrictions on how your beneficiaries receive distributions. You can include “spendthrift” provisions to prevent a person from squandering distributions or incorporate special needs trust, so an individual with disabilities will still qualify for public assistance. These strategies are not possible when you die intestate.
Talk to a North Carolina Estate Planning Lawyer About Your Will
These are just a few of the adverse implications of passing away without a will or other essential documents in an estate plan. To ensure your final affairs are handled according to your intentions, please call Mullen Holland & Cooper P.A. to discuss your circumstances. You can call 704.864.6751 or go online to set up a consultation at our offices in Gastonia, NC. We serve clients throughout Western North Carolina, and Upstate South Carolina, and we look forward to working with you.