“The only things certain in life are death and taxes.” Ben Franklin
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Thinking about death is not something we choose to do. Death is a subject that we shy away from and pretend doesn’t exist; at least from the standpoint that it certainly won’t happen to us until we’re ready. We extend our sympathy and cry a few tears when death happens around us. We gather in small groups and say, “But he was so young,” and are silently thankful that we still have time. Unfortunately though, it’s not that simple. Have you ever asked someone if they were ready when death came knocking at their door? Probably not because if they answered death’s knock, they’re already dead. But I can almost guarantee that if the dead could speak they would unanimously agree that they wished they had more time. Unless you have some kind of super celestial power along with Nostradamus-like ability, death will probably come when you least expect it. No one lives forever.
I don’t want to put a damper on anyone’s mood, but if I don’t point out the obvious, who will? I’ve seen too much family discord after the death of a loved one to let the same thing happen to you. Do you know how many lives are affected when someone dies? Not only will your loved ones have to somehow deal with the fact that you’re no longer around; they also have to deal with the financial tragedy of what your loss really means. But there’s good news! If you haven’t taken the time to take care of your family and assets postmortem, North Carolina will take care of them for you.
If you die without a will in North Carolina, you are considered to have died intestate. And if you die intestate, your assets pass to your heirs based on North Carolina’s laws of intestate succession, determined by marital and blood relationships.
Under North Carolina law, the clerk of the county’s Superior Court also serves as the probate court judge. North Carolina’s personal estate probate law requires that the clerk oversees the handling of intestate estates. There are rules and regulations that must be followed by the probate court and what they have in mind for your estate (real property, personal property, other assets, etc.) may not necessarily be what you’re planning for your stuff.
Before I get into the nitty-gritty, let me point out a couple of things that you need to be aware of.
Money in bank accounts or investment accounts that belong only to the decedent (person who dies) isn’t available to the family or the executor until the executor has been appointed by the probate court. So NO ONE will be able to access the deceased’s bank accounts or investment accounts unless they get special permission from the probate court or until an executor has been named. Although jointly-titled and payable-on-death accounts generally do not pass through the probate process, North Carolina law requires such information for probate records.
Common Law Marriage in North Carolina
Common law marriages cannot be created under North Carolina law in any circumstance. However, spousal consideration may be given to couples who establish a common law relationship in another state that recognizes such unions. Please speak with your attorney for more details.
Same sex relationships in North Carolina
At this time, same sex marriages are not legally recognized in North Carolina. If you are in a same sex relationship, you will need to see an attorney to establish contracts and agreements to protect yourself and your assets before your partner’s demise.
My advice to anyone who participates in a relationship that is not legally recognized is that you should write your final wishes in contract form. Your situation is especially precarious if there are children, ex-spouses, parents, and/or siblings involved. Without something in writing, you may find yourself fighting unnecessary battles with the deceased’s family members and/or children. If you don’t have it in writing, preferably legal form, you will find yourself up the creek without a paddle. Know what I mean?
In North Carolina, after the payment of your debts, funeral expenses, probate and administrative fees, the remainder of your possessions will be divided based on North Carolina statutory law. The following information was written by Jackie Bedard (ncwillsandtrusts.com).
If you’re single and your parents are living, no child(ren)
Your entire estate will pass to and be divided equally among your parents. If only one parent is still living, then everything will pass to the living parent.
If you’re married and your parents are living, no child(ren)
Your spouse will receive the first $50,000.00 of personal property, one-half (1/2) of the remaining personal property and one-half (1/2) of all real estate. Your parent(s) will receive one-half (1/2) of the remaining personal property and one-half (1/2) of all real estate.
If you’re married and your parents are no longer living, no child(ren)
Your spouse will receive all property which could pass under a will.
Married with child(ren) – no living parent(s)
One child – Your spouse will receive the first $30,000.00 of personal property, one-half (1/2) of the remaining personal property and one-half (1/2) all real estate. Your child will receive one-half (1/2) of the remaining personal property and one-half (1/2) of all real estate.
More than one child – Your spouse will receive the first $30,000.00 of personal property, one-third (1/3) of the remaining personal property and one-third (1/3) of all real estate. Your children will evenly split the remaining two-thirds (2/3) of personal property and real estate.
One or more children, no living parents or spouse
All of your property and possessions will be divided evenly among your children.
Neither spouse, nor children, nor parents surviving
The intestacy laws of North Carolina provide additional rules for distributing your assets to more remote relatives. In the event that you have no other legal heirs (i.e., blood relatives), your assets will pass to the State of North Carolina.
I know this seems like a lot of information, but keep reading for a few more important items.
If you have minor children, the intestacy laws do not provide a means of appointing a guardian to care for your children.
Why would you want to leave it to the courts to decide who cares for your children after your death?
If you have minor children, it is not recommended that you leave property to your children outright.
Under North Carolina law, children are not allowed to own property. As such, if property passes to a child directly, either under a will or under the intestacy laws, the courts will appoint someone to manage the property on behalf of your child. This process can be time consuming, frustrating and costly. The person appointed must file an annual accounting each year reporting (to the penny) all money into and out of the children’s accounts. While this might seem like a reasonable protection, the result is that it often binds the hands of a surviving spouse or guardian that is caring for the children, for example, making it difficult to handle such day to day responsibilities such as paying mortgage, utilities, educational expenses, etc. It is instead recommended that you include a trust for minors in your will or have a separate trust agreement to provide for the management of the children’s property. Such a document can be drafted to protect your children while still allowing flexibility to the surviving spouse or guardian.
Problems can arise in blended families.
In families with step-parents or step-children, certain family members that you do or do not want to be included may not receive the treatment you would like. For example, if you are a step-parent that would like some of your property to pass to your step-children but you have not legally adopted the step-children, the step-children will not receive anything via intestacy.
Heirlooms and sentimental possessions may be sold.
Often people have special family heirlooms, family vacation homes or other sentimental possessions, that they want to ensure remain in the family and are not sold upon their death. If the property passes through intestacy, there is a greater likelihood that such property may be sold. Having a valid will can ensure property treatment of such sentimental property.
Equal may not be “fair.”
The intestacy statutes lean towards equal division of property to those within the same generation. For example, equal division among parents if your property passes to your parents, or equal division among children if your property passes to your children. The reality, for many, is that an equal distribution may not be a “fair” distribution. For example, parents with adult children often use wills to leave unequal amounts to their children due to particular circumstances. The parents may choose an unequal distribution because during lifetime they spent disproportionally more money putting one child through graduate school. Another common reason is that one child may have stayed close to home and taken on the caretaker role as the parents aged.
Special circumstances will not be factored in.
There are many, many reasons why intestacy will not fit most people’s wishes. Intestacy statutes are drafted with a “one size fits all” mindset, and just like one size fits all T-shirts, the intestacy laws often end up fitting very few people properly. The laws cannot take into account each person’s particular circumstances, so special situations will not be adequately resolved under the intestacy laws. Such special circumstances might include the need to provide for a special needs child, a pet, a business ownership interest, a close friend, charity, and so on.
My final word is this, call your attorney and get a will. Other documents to consider are powers of attorney, an advance medical directive, marital trust and children’s trust. For more end of life planning information, click here.