Estate Planning

Wills and Trusts
Adam Brown and C. Camille NeSmith, Esq.

Wills and trusts are important documents that can help you care for your family and protect your assets both during your lifetime and after your death.

Wills

What is a Will? A will is a legal document that allows you to control how the assets you own are distributed at the time of your death.  A will can dispose of both real property, real estate such as your home, and personal property, such as bank accounts and automobiles. 

Testate vs. Intestate.  A person who dies with a valid will is said to have died testate, while a person who dies without a will is said to have died intestate.  If you die intestate North Carolina law determines how your assets are to be distributed to your surviving family.  If you die intestate and have no surviving family, North Carolina law disposes of your assets by giving them to the State.  Therefore, it is very important to have a valid will at the time of your death to insure that your assets are disposed of according to your wishes.

The Probate Process.  Probate is the process of administering a person’s estate.  Usually a will nominates an executor or personal representative to oversee the administration of the estate.  It is this person who distributes the assets of the estate as directed by the will under the oversight of the Clerk of the Superior Court.  Not all of a decedent’s assets will pass through the probate process after their death.  Any assets held with rights to survivorship will pass to the survivor automatically.  Any assets with designated beneficiaries such as life insurance policies, annuities, and some retirement plans will pass directly to the designated beneficiary.  Any assets held in trust are dealt with through the terms of the trust and generally do not pass through the probate process.  Should a decedent die owning no assets in their name alone, the probate process may not be necessary.  The probate process is over when all of the debts, taxes and expenses have been paid out of the estate and all of the decedent’s assets have been distributed.  At such time, the Clerk of Superior Court will release the executor or personal representative from any further responsibility and the estate will be closed.

Trusts

Revocable Living Trusts.  A revocable living trust (“RLT”) is an agreement between the maker, usually called the grantor, and the trustee under which the grantor transfers assets to the trustee with instructions as to how the assets are to be managed and used.  These instructions can include how the assets are to be managed and used both during the grantor’s lifetime and after the grantor’s death.  The assets held in a RLT will avoid probate upon the grantor’s death.  The term revocable refers to the fact that the grantor has the power to revoke, do away with, or even change the trust during his life time.  The grantor is able to add or remove assets from the trust and is able to direct how the assets are to be used at any time. 

Living Wills and Powers of Attorney

Often near the end of life, a person is unable to express their desires to loved ones or medical professionals concerning their medical care.  Living wills and powers of attorney allow you to direct how medical care should be given in the event that you are unable to make those decisions or unable to express your wishes. 

Living Wills

What is a Living Will?  A living will is a legal document that states whether you wish for your life to be prolonged by medical procedures.  A living will is used to express your wishes in any of three circumstances: (1) you have an incurable or irreversible condition that will result in your death within a relatively short period of time; (2) you become unconscious and your health care providers determine that, to a high degree of medical certainty, you will never regain consciousness; and/or, (3) you suffer from advanced dementia or any other condition which results in substantial loss of your cognitive ability, and your health care providers determine that, to a high degree of certainty, the loss is not reversible.  In North Carolina a living will is also referred to as an Advanced Directive for a Natural Death. 

What can a living will authorize or direct?  A living will can authorize or direct the withholding of life prolonging medical procedures that would only serve to delay your death, such as the use of a respirator, artificial nutrition, or hydration.  In a living will you can direct the use of artificial nutrition or hydration together or separate from life prolonging medical procedures.

** A living will is not a testamentary will and makes no provisions for your personal belongings and property after your death. **

Powers of Attorney

What is a Power of Attorney?  A power of attorney (“POA”) is a legal document in which a person referred to as the principal, gives authority to the agent to act on the principal’s behalf. 

Types of POA.  There are two main types of POAs, General Financial POA and Healthcare POA.  A Financial POA allows the agent to manage the financial matters of the principal such as paying bills and handling business or property transactions.  A Healthcare POA authorizes the agent to make all medical decision for the principal if the principal is unable to do so. 

What is a Durable POA?  Generally a POA does not survive the incapacity of the principal, meaning that when the principal no longer has the capacity to give authority to the agent to act on the principal’s behalf the POA is no longer valid and the agent no longer has the authority to act on behalf of the principal.  A Durable POA, however, survives the incapacity of the principal which allows the agent to make decisions for the principal when they are no longer able to make those decisions for themselves.  Durable POAs apply to both Financial and Healthcare POAs.

Where should you keep your Living Will and POA?  It is suggested that you keep multiple copies of these documents and give them to multiple different people.  You should give a copy of these documents to your family physician, your attorney, and your spouse or an adult family friend.  These documents should not be kept in a safety deposit box or in a locked safe because they should be easy to get to in an emergency.  For a nominal fee these documents can also be filed with the Advanced Health Care Directive Registry, which is maintained by the Secretary of State.  


The information provided should in no way be considered legal advice.  The accuracy of any legal information provided is not guaranteed.  Please seek professional help if there are concerns about specific legal issues.

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