NC and SC Estate Planning and Elder Law Firm

Should you plan for a time when your spouse predeceases you?

You love your spouse so much that it causes you great pain to think about his or her death. But, this pain is nothing compared to the agony you will face should your spouse predecease you without an estate plan in place. Estate planning can make dealing with the death of a spouse significantly easier by limiting the stress that may come with being unfamiliar with the family finances and your spouse’s wishes. Here is how to being planning for the possibility that your spouse will die first.

It is most important to be organized when it comes to estate planning.

Have you ever seen the movie Happy Gilmore? It’s an Adam Sandler comedy about a wannabe hockey player that takes up professional golf in order to make enough money to save his beloved grandmother’s home from foreclosure. While Happy is out playing on the PGA tour, his grandma is placed in a nursing home with a manager that is verbally abusive, and runs a sweatshop in the arts and crafts room.

Elder abuse is such a taboo topic that the comical portrayal of it in Happy Gilmore is one of the only representations of it you will see in pop culture. It is a topic that is swept under the rug and ignored despite its growing frequency.

For example, last year alone, 21 people were convicted for scamming elderly North Carolina residents out of more than $91 million.

What happens to my social media accounts after I die?

Technological innovation is shaping many aspects of our lives as more of our affairs are conducted digitally. Through the widespread use of email and social media accounts, computer storage of digital pictures, online bank and investment accounts, many of us have acquired a portfolio digital assets. But what happens to these assets when we die?

Currently, there is no clear direction under the law in North and South Carolina regarding the legacy of digital assets. Elsewhere, only a handful of states have enacted laws concerning digital assets with respect to estate planning. In addition, the Uniform Law Commission, a group of attorneys across the U.

The New York Times has finally caught on to something we have known here in the Carolinas for quite some time - veterans are being denied benefits by the VA at an all-time high rate. This is a serious issue that is impacting a lot of young men and women from both North and South Carolina who bravely answered the call of duty after the September 11 terrorist attacks.

A Common Story

The Times article tells the story of Joshua Bunn, who was a rifleman in Afghanistan, but like so many recent vets, is being denied benefits by the Department of Veterans Affairs (VA). Bunn, who the Times reports was suffering from suicidal thoughts and nightmares, went AWOL and after he was caught, agreed to take an other-than-honorable discharge from the Marine Corps because he was told he would be better off taking an other-than-honorable discharge than waiting years for a medical discharge to go through.

Unfortunately, because his discharge was not honorable, the VA does not consider him a veteran, and is denying him benefits.

What steps can you take to decrease the risk that your loved ones will fight over your estate?

It happens all too often. A person dies and their children go to war over the estate. One claims she was promised the silver and another stakes a claim for an antique piece of furniture and things spiral out of control.

When should I update my beneficiary designations?

A well-designed estate plan is one that considers the changes that occur during an individual's lifetime, such as getting married, having children, or getting divorced. In addition to keeping your estate planning documents, such as a trust, a will, and powers of attorney, up-to-date, it is also essential that the beneficiary designations on your retirement accounts are current.

Reasons to Update Beneficiary Designations

Because retirement accounts and life insurance policies are generally not included in an estate, it is important to update these documents so they match your overall estate plan, ensuring that your last wishes are fulfilled. Of course, if you do not specify these designations, federal or state law will make their own determinations.

By failing to update these designations in the event of divorce or remarriage, there is the potential that your heirs will become entangled in a lengthy and expensive litigation, and the court's determination may not agree with your wishes.
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How should you protect the division of your assets after a second marriage?

In this era of second (or even multiple) marriages, stepchildren, and blended families, QTIP (qualified terminable interest property trusts) are extremely helpful in estate planning. When you have married for the second time and have children from your first marriage, making sure that all of those you love will be provided for after your death becomes increasingly complicated. A QTIP trust accomplishes the following:

• Allows you to put limitations on your property so it doesn't all go directly to your new spouse
• If one spouse dies, it allows the surviving spouse to decide what proportion, if any, of the deceased's estate should be held in trust to maximize tax savings

The latter is particularly helpful since estate tax laws are in a continual state of flux.

How does a QTIP trust work?

It is possible for each spouse to set up a QTIP trust, leaving his or her assets to the other. When the first spouse dies, the other spouse receives a "life estate" in the QTIP trust.

How can I plan for long-term care?

Given the fact that people are living longer, the cost of medical coverage during their older years is a matter for individuals to consider as part of their estate planning. Long-term care for nursing home patients can cost as much as $90,000 per year, according to some estimates so long stays can easily deplete a retiree's estate.

What is a hybrid life insurance policy?

Many individuals have traditionally planned for long-term care by purchasing stand alone insurance policies. However, these plans are expensive and it is common for premium costs to rise. In response to these shortcomings, financial and estate planning professionals are informing their clients of a relatively new option -- hybrid policies. Hybrid policies are essentially universal life insurance policies or fixed annuities that are bundled with coverage for long-term care. These policies provide for medical care by retaining a certain amount of cash which can then be used to pay for long-term care benefits.

For example, in a well-designed hybrid life plan, an individual can pay a single premium of $100,000 and be entitled to $400,000 in payments for long-term care after a certain period. These products not only provide life insurance and long-term care funding, but can also be tapped for other reasons (depending on the circumstances) and passed on to heirs. However, most hybrid plans have "surrender periods" that put the money off limits for a certain number of years and impose a penalty if funds are withdrawn during that time.

Who Can Benefit from Hybrid Polices?

According to the insurance industry group Limra, sales of hybrid insurance products have risen dramatically since 2008 to more than $2.4 billion in 2015. Stand alone long-term policies, on the other hand, account for $300 million in annual sales. Moreover, the number of insurers offering hybrid products is limited because of higher costs associated with these policies.

Hybrid insurance is not for everyone, especially individuals who do not have large assets, because insurance companies get a lot of money upfront, which they hold onto and manage. The surrender fees are designed to make it difficult to withdraw funds. Some advisors recommend these policies for clients with half a million to $2 million dollars in assets. This is because individuals above this threshold may be able to self-fund their long-term care, while those who fall below that asset level may be able to "spend down" their assets in order to qualify for Medicaid.

In the final analysis, hybrid plans are complicated and, require the assistance of an attorney with expertise in estate planning and long-term care.

What are the essentials of a business succession plan?

In launching a new business, entrepreneurs need to consider what the best business structure will be and how to arrange for funding, as well the how to bring their products to the market. What many startups fail to recognize is the need for business succession planning. If the future prospects of the business are strong, the owner needs to ensure business continuity when he or she is no longer at the helm.
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In this computer age, when so many tasks are accomplished via the internet -- including banking, shopping, and important business communications -- it may seem logical to turn to the internet when creating a legal document such as a will . Certainly, there are several websites advertising how easy and inexpensive it is to do this. Nonetheless, most of us know that, while the internet can be a wonderful tool, it also contains a tremendous amount of erroneous, misleading, and even dangerous information.

In most cases, as with so many do-it-yourself projects, creating a will most often ends up being a more efficient, less expensive process if you engage the services of a qualified attorney.  Just as most of us are not equipped to do our own plumbing repairs or automotive repairs, most of us do not have the background or experience to create our own legal documents, even with the help of written directions.

Situations that Require an Attorney for Will Creation

 In certain cases, the need for an estate planning attorney is inarguable. These include situations in which:

• Your estate is large enough to make estate planning guidance necessary
• You want to disinherit your legal spouse
• You have concerns that someone may contest your will
• You worry that someone will claim your mind wasn't sound at the signing

Mistakes and Omissions 

It has always been possible to write a will all by yourself, even before the advent of the typewriter, let alone the computer.  Such a document, however, is unlikely to deal with the complexities of modern life.  Many estate planning attorneys have seen, and often been asked to repair, wills that have mistakes or significant omissions. These experts have also become aware of situations in which the survivors of the deceased wind up in court, spending thousands of dollars to contest ambiguously worded or incomplete wills. Without legal guidance from a competent estate planning attorney, creating a "boxtop" will can result in tremendous financial and emotional risk.

Evidence that Online Wills Are Not Foolproof

Evidence that many other complications can arise when an individual creates a will using generalized online directions can be found in the following facts: 

• Each state has its own rules (e.g. requiring differing numbers of disinterested party signatures)
• Even uncontested wills can remain in probate if not executed in an exacting fashion
• Estate planning attorneys find legal software programs inadequate
• Even legal websites themselves recommend bringing in an attorney in all but the very simplest cases
• Some legal websites provide inexpensive monthly legal consultations with attorneys to protect their client and themselves

Areas that Frequently Cause Problems 

Self-constructed wills often become problematic when the testator:

• Names an executor who has no financial or legal knowledge
• Leaves a bequest to a pet  (legally, you must leave the bequest to an appointed caretaker)
• Puts conditions on payouts to an that are difficult, or impossible, to enforce
• Makes unusual end-of-life decisions or puts living will information into the will
• Designates guardians for children, but neglects to name successor guardians
• Neglects to coordinate beneficiary designations where, for example, the will and  insurance policy designations contradict one another
• Leaves funeral instructions into the will since the document will most likely not be read until after the funeral has taken place
• Leaves inexact or ambiguous instructions dealing with blended families
• Neglects to mention small items in the will which, though of small financial value, are meaningful to loved ones and may cause contention

In order to ensure that you leave your assets in the hands of those you wish, and to avoid leaving your loved ones with bitter disputes and expensive probate costs, it  is always wise to consult with an experienced estate planning attorney when making a will.  In this area, as in so many others, it is best, and safest, to make use of those with expertise in the field.

The conversation about a person’s last wishes can be an awkward one for both the individual who is the topic of conversation and his or her loved ones. The end of someone’s life is not a topic anyone looks forward to discussing. It is, however, an important conversation that must be had so that the family understands  the testator’s final wishes before he or she passes away. If a significant sum is being left to someone or some entity outside of the family, an explanation of this action may go a long way to avoiding a contested will. In a similar vein, if one heir is receiving a larger share of the estate than the others, it is prudent to have this action explained. If funds are being placed in a trust instead of given directly to the heirs, it makes sense for the testator to advise his or her loved ones in advance.

When a loved one dies, people are often in a state of emotional turmoil. Each deals with grief differently and, often, unpredictably. Anger is a common reaction to loss, one of the five stages postulated to apply to everyone dealing with such a tragedy. Simply by talking to loved ones ahead of time, a testator can preempt any anger misdirected at the estate plan and avoid an unnecessary dispute, be it a small family tiff or a prolonged legal battle.

The executor of the estate must be privy to a significant amount of information before a testator passes on. It is helpful for the executor to know that he or she has been chosen for this role  and to have accepted the appointment in advance. The executor should know the location of the original will. Concerns of fraud mean that only the original copy of a will can be entered into probate. The executor should be aware of all bank accounts, assets, and debts in a testator’s name. This will avoid a tedious search for documents after the decedent passes on and will ensure that all assets are included as part of the estate. The executor of an estate should be aware of all memberships, because it will be the executor’s responsibility to cancel them. An up-to-date accounting of all assets and debts will simplify the settlement of the estate for an executor significantly.