Create an Estate Plan in North Carolina in 14 Simple Steps

create an estate planWould you like to create an estate plan so that your family and children are protected in the event you have to walk out on life or are otherwise unable to care for them?

Here is a quick and easy checklist of all the things you will need to consider to create and estate plan.

Quickly and Easily Create an Estate Plan

#1 Get Down to Basics – You Need a Will. The first think you will need to do is create a Will in North Carolina. Your Last Will and Testament will state who you would want to inherit your property, and can also name a guardian to care for your children in the event that both you and your spouse should walk out on life. But there are also some pitfalls with creating just a will, not the least of which is that a will won’t help your family if you are incapacitated. A will doesn’t have any legal effect until you pass away.

#2 Do You Need a Trust? If you own substantial property, including a home, have minor children, or are part of a blended family, you may want to consider drawing up a living trust. A trust has many benefits, including that it will keep your loved ones out of probate court, and can also manage your finances and other affairs whether you are incapacitated or have passed away.

#3 Prepare a Durable Power of Attorney. A durable power of attorney will allow you to name an individual to manage your financial affairs in the event that you are incapacitated. The durable power of attorney will terminate upon your death. This is a very important document and should be filed with the Register of Deeds in the North Carolina County in which you reside.

#4 Don’t Forget To Draw Up Your Advanced Directives or Living Will. Your advanced directives (aka Living Will) will outline what you want to happen to you in the event that you are no longer able to make medical decisions for yourself. You can either make these decisions ahead of time, or delegate them to a health care power of attorney, or a bit of both. Many people elect to take these decisions out of the hands of their health care power of attorney and make them on their own through this very important document.

#5 Appoint a Health Care Power of Attorney. For those situations where you are not terminally ill, or if you are just in a position where you are temporarily incapacitated or unable to communicate, you may want to name a health care power of attorney who can act on your behalf.

#6 Consider Temporary Guardians. Many people name permanent guardians in their Wills, but they neglect to name temporary guardians in the event of an emergency. You should have a list of 3-5 individuals that could step forward and take temporary custody of your children in the event that both you and your spouse are unable to care for them. These should be people you trust and who your children know well that live in close proximity to your current home. For more information on how to name temporary guardians, you may want to review our Kids Emergency Action Plan (aka KEAP™ Your Kids Safe).

#7 Name Permanent Guardians. In addition to temporary guardians, you will need to appoint a permanent guardian who is able and willing to take permanent custody of your children in the event that something happens to both you and your spouse, rendering you both unable to rear your children.

#8 Purchase Appropriate Life Insurance. Life insurance and estate planning go hand in hand. Unless you are already independently wealthy, you should have a term life insurance policy in place that will protect your spouse and kids in the event that something happens to you. This is especially important if you own a house and have young children.

#9 Consider a Financial Guardian for Your Children. Assuming you purchase life insurance or have other assets to fund your estate plan and look after your children, you will need to determine who the financial guardian should be for your children. Frequently this would be the same person as your children’s permanent guardian, but that is not always the case.

#10 Consider How Your Heirs Will Pay for Your Funeral. Funeral expenses can run from $5,000 – $10,000 or more. The funeral home will typically want these expenses paid up front. To avoid an uncomfortable and potentially embarrassing situation for your heirs, you may want to make these arrangements ahead of time, and/or deposit funds into a separate account that can be used upon your death to pay these expenses.

#11 Make Sure Your Business is Protected. If you own a business, whether you are the sole owner or in partnership with others, you should have a succession plan in place. This plan should include a buyout agreement that states who will take control of your business in the event something happens to you, and how they will buy out your ownership stake in the business.

#12 Update Your Beneficiary Designation Forms. If you have retirement accounts and life insurance, you want to make sure that all accounts have updated beneficiary designation forms in place. Your primary beneficiary will typically be your spouse, and the contingent beneficiary could be your trust if you have life insurance. However, you will want to talk to an estate planning attorney before naming your trust as a beneficiary of your retirement plan, as you may need to have a standalone retirement trust drafted.

#13 Make Sure Your Estate Plan is Properly Funded. This is not as important if you have a simple will and other ancillary documents, but if you have a trust-based plan, it is important that your estate plan is properly funded. If not, it could fail when you need it most.

#14 Store Your Documents Properly. If something happens to you, your important documents need to be easily accessible. We recommend that you have you store your will in a fireproof safe in your home, or at the office of your estate planning attorney. You should keep the rest of your documents in electronic form that are easily accessible. Here is a list of the documents you should have available to your next of kin:

  • Last Will and Testament
  • Revocable Living Trusts
  • Insurance Policies
  • Real Estate Deeds
  • Stock Accounts
  • Information on all of your Bank Accounts, Mutual Funds, Safe Deposit Boxes, etc.
  • Information on all retirement accounts
  • Information on how you want your funeral to be paid for and your final arrangements

Contact a Cary Estate Planning Attorney With Questions

If you have additional questions on how to create an estate plan, you will want to talk to an estate planning attorney to make sure your plan is prepared properly.

James Hart is a North Carolina Estate Planning Attorney with an office in Cary, just outside of Raleigh. If you would like to set up a time to meet with him for an initial wealth planning session, please contact our office at (919) 460-5422 or fill out our online contact form.