Planning Your Estate

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Red dotted line Planning Your Estate is a joint project of the North Carolina Cooperative Extension Service, NC State University and the Elder Law Section of the North Carolina Bar Association. It is designed as a guide to help you work with your attorney to develop an estate plan appropriate for you and your family.

Disclaimer: The Web program, Planning Your Estate, is provided as a public service. It is designed to acquaint you with certain legal issues and concerns. It is not designed as a substitute for legal advice, nor does it tell you everything you may need to know about this subject. Future changes in the law cannot be predicted, and statements in this publication are based solely on the laws of North Carolina in force on the date of publication. If you have specific questions on this issue, seek professional advice. If you need an attorney, you may call the North Carolina Lawyer Referral Service, a non-profit public service project of the North Carolina Bar Association, toll-free: 1-800-662-7660 (Wake County residents call: 828-1054).

Getting Started
What is estate planning?
Initiate the discussion
List your objectives
Compile information
Choose professional advisers
Keep information updated
Setting Goals
Objectives
Additional objectives
Information Needed
What my attorney should know
Questionnaires
Property Ownership
Definition of "property"
Ownership of property
Tenants by the entirety
Joint tenants with right of survivorship
Tenants in common
Life estates
Remainder interests
Estate Planning Decisions About Property
How do you own your property?
What will be your spouse's share?
What happens if a beneficiary dies before you do?
If you have more than one beneficiary, how do you want your property divided?
Dividing property among surviving children and grandchildren
To bequest and devise
Physically dividing the property
Do you want to give a beneficiary full or limited ownership rights?
If You Don't Have a Will
Share of surviving spouse
If there is no surviving spouse
No relatives
Calculating the shares of beneficiaries
Basic Documents
Will
Letter of last instruction
Durable power of attorney
Health care power of attorney
Advance instruction for mental health treatment
Living will
Trust
The Surviving Spouse
Spouse's share without a will
Spouse's election to take a life estate
Spouse's share with a will
Right to dissent from the will
Joint property ownership
Summary probate proceedings for surviving spouse
Children
Minor children
Guardianship
Gifts to minor children
A child's right to inherit
Adopted children
Children born or adopted after the will
Children conceived by artificial insemination
Illegitimate children
Legitimated children
Step children
No children
Wills
The testator
Purpose of a will
Witnesses
Self-proved wills
Unwitnessed wills
Choosing your personal representative
Special concerns
Storing your will
Amending a will
Revoking a will
Effect of divorce
Moving to a new state
Owning property in another state
Property passing outside the will
Costs of preparing a will
The disadvantages of writing your own will
Guardianship
Advantage of guardianship
Disadvantages of guardianship
Procedure for determining guardianship
Types of guardians
Qualifications for a guardian
Guardian's bond
Durable Power of Attorney
What makes a power of attorney durable?
Springing powers of attorney
Records, inventories, and accounts
Registration
Recommend a guardian
Terminating a durable power of attorney
Paying your agent
Health Care Power of Attorney
Choosing your health care agent
Executing (signing) a health care power of attorney
Authority of your health care agent
Effective date
Alternate health care agents
Coordinating with a general durable power of attorney
Coordinating with a court-appointed guardian
Coordinating with a living will
Revoking your health care power of attorney
Consent to health care for minor
The Living Will
Your rights
Legal requirements
Choices in a living will
Executing (signing) a living will
Effect of a living will
Definition of terms used in the living will
Revoking a living will
Storing a living will
If there is no living will
Moving out-of-state
Advance Instruction for Mental Health Treatment
Who may make an advance instruction for mental health treatment?
What is an advance instruction for mental health treatment?
How do you execute an advance instruction for mental health treatment?
When is it effective?
What is the doctor's duty?
How is a health care agent appointed?
What is the health care agent's authority?
What is the health care agent's potential liability?
Trusts
Trust terms and definitions
Reasons to set up a living trust
Reasons to set up a testamentary trust
Decisions of the grantor
The beneficiaries
The trustee
Distribution of the trust funds
Shares of the beneficiaries
Duration of the trust
Remainder of the trust
Taxes
Special trusts in North Carolina
Professional services
Taxes
Federal transfer taxes - in general
The unified credit
Transfers between spouses
Unified rate schedule
Federal gift tax
"Gift" defined
Valuing the gift
The annual exclusion
Gift-splitting
Gift tax returns
Interest and penalties
Federal estate tax
Computation of the tax
Valuing the gross estate
Estate tax returns
Interest and penalties
Generation skipping transfer tax
Calculation of GST tax
Exemptions and exclusions
North Carolina gift tax
Annual exclusion
Lifetime exemption
Other gifts exempted
Tax rates
Tax return
North Carolina estate tax
North Carolina generation-skipping transfer tax
Valuing Your Gross Estate
The gross estate - in general
Property in which decedent held an interest
Retained interests
Gifts within three years of death
Life insurance
Retirement benefits and annuities
Powers of appointment
Joint property
Farm and business estate tax exclusion
Valuation of property
Taxable estate
Medicaid Eligibility for Nursing Home Benefits
Medicaid defined
Eligibility requirements
The income test
Income rules for spouses
The asset test
Exempt assets
Asset rules for spouses
Community spouse resource allowance formula
Assets acquired after eligibility
Estate recovery
Waiver of estate recovery
Restrictions on transferring assets
Exempt transfers
Insurance
Life insurance
Whole life insurance
Term life insurance
Taxation
Use in estate planning
Beneficiaries
Long-term care insurance
Health insurance, including Medicare
Estate Planning for Family Businesses
Estate taxes for the family business
Congressional relief
Qualified family-owned business
Calculating the adjusted gross estate and the adjusted value of the business
Qualified heirs
Consider buy sell agreements and form of business ownership
Sole proprietorships
Corporations
Limited liability companies and family limited partnerships
Conclusion
Administration of Estates
The testate estate
The intestate estate
If the surviving spouse is sole heir
Application for letters and qualification
Notification of creditors
Opening an estate checking and savings account
Gathering assets
Accounts
Distribution to heirs
Tax returns
Closing the estate
Preparing for Dependency
Guardianship
Joint ownership of personal property
Durable power of attorney
Health care power of attorney
Trusts
Living will
Advance instruction for mental health treatment
Long-term care
How to Choose an Attorney
Questionnaires
Personal data
Financial data
Will
Living will
Durable power of attorney
Health care power of attorney
Trusts
North Carolina Statutory Forms
Living will
Health care power of attorney (pre-October 1, 1998, does not include language for advance instruction for mental health treatment.)
Health care power of attorney (post-October 1, 1998, includes language for use with advance instruction for mental health treatment.
Advance instruction for mental health treatment
Miscellaneous
Medical guidelines
Medical directive


[1] The material for this section is under development and is not currently available. We apologize for any inconvenience.


Project Coordinator: Carol A. Schwab, J.D., LL.M.
Professor and Extension Specialist, NC State University.

Date: May 2001

NC State University
College of Agriculture and Life Sciences
North Carolina Cooperative Extension Service
Department of Family and Consumer Sciences
North Carolina Bar Association
Elder Law Section


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