There are numerous reasons that adults of all ages should develop an estate plan, but one of the top considerations is avoiding the probate process in North Carolina. Depending on the details, estate administration can involve lengthy court proceedings and costs that drain the decedent’s assets. Plus, probate cases are public records, which intrudes upon your private affairs. With proper planning, it is possible to sidestep probate entirely or minimize courtroom proceedings.
Still, estate planning concepts are complex and errors can thwart your intentions, whether you are seeking to steer clear of probate or achieve other goals. It is wise to count on a North Carolina estate planning and administration lawyer for the details, but you might want to learn more about five estate planning strategies to avoid the probate process.
- Structure Title to Real Estate: If your estate includes ownership interests in real property, you can prevent it from going through probate by structuring the conveyance according to North Carolina’s statute on joint tenancy with right of survivorship. By including appropriate language in the deed, your interest will pass to the other joint tenant(s) upon your death.
- Details on Life Insurance Policies: As the insured, you will designate a beneficiary to receive the proceeds of a life insurance policy. Upon your passing, this individual will need to present a death certificate to obtain the funds. However, you need to ensure you keep current on the person you listed as beneficiary. If the transfer fails, such where the beneficiary predeceases you, the death benefit may go to your estate to be probated.
- Beneficiaries for Bank Accounts: When setting up a checking, savings, money market, or other bank account, you may have the option to structure it as “pay-on-death.” You will need to designate a beneficiary; similar to life insurance policies, that person can gain access to the funds by presenting a death certificate to the bank.
- Living Trust + Pour Over Will: This estate planning tactic is useful for individuals who have substantial assets and/or more complex needs in terms of beneficiaries. In sum, you create the revocable living trust during your lifetime and transfer all assets – including real estate and personal property – to the name of the trust. You designate yourself as trustee, so you have control and management over the trust.
At the same time of creating the trust, you will also execute a special type of will. As testator of your will, state law allows you to pass any property by will as long as you own it at death. As such, any assets that you inadvertently did not transfer to the trust will “pour over” into it. The legal effect is that you own nothing at death, making probate unnecessary.
- Aim for Small Estate Administration: Even if you cannot fully avoid probate through the above strategies, you may take advantage of some to “spend down” your estate. Then, under North Carolina law on small estates, the probate process can be accomplished through an affidavit.
Discuss Strategy with a North Carolina Estate Planning & Administration Attorney
These are just a few strategies for avoiding probate, and they offer many other advantages depending on your objectives. Proper estate planning can also help you achieve other goals, such as preparing for incapacity, asset protection, and providing for beneficiaries.
To learn more about estate planning options, please call Mullen Holland & Cooper P.A. You can set up a consultation by calling our Gastonia, NC offices at 704.864.6751 or via our website. Once we review your circumstances, we can advise you on estate planning strategies that are custom-tailored to your intentions and needs.