Charlotte, North Carolina Estate Planning Attorney » Sabrina Winters

Probate Court Fees in North Carolina

Sabrina Winters — Wed, 28 Jul 2010 14:00:29 +0000

For those of you who still aren’t convinced that avoiding Probate should be a priority, here is a link (http://tinyurl.com/probatefees) to the list of fees that the North Carolina Probate Court charges for various documents, filings and actions in a probate matter. By they way, some were just raised…again. When calculating fees, don’t forget to add in the legal fees the attorney will charge to open, administer and close the estate. Some firms charge an hourly and others charge a percentage of the value of the estate, so it is hard to estimate what that might be. You can probably approximate that it will cost 4% to 10% of the value of the estate. Not necessarily worth the lower price of a Will (as opposed to a revocable living trust) when you (well, actually your estate) is going to spend more money in the long run. Just something to consider.

What is a Letter Testamentary/Letter of Administration?

Sabrina Winters — Fri, 23 Jul 2010 12:00:03 +0000

If you have been nominated in a person’s Last Will and Testament as the Executor (the person whom collects the assets and distributes them and manages the estate) you will not be able to perform your duties unless you have been appointed by the Court as the Executor. Your appointment is reflected through the Letter Testamentary. The term Letter of Administration is the exact sam document, except the appointed person is called an Administrator and the decedent did not have a Last Will and Testament.

The one page document contains the following information:

1. The State and County the Estate was filed;

2. The name of the Decedent (person who died);

3. A statement that the application has been reviewed and the Court “adjudged legally sufficient the qualification of the fiduciary (Executor)”;

4. The name of the Executor ;

5. The date of the appointment (the date that the Clerk of Court signed the Letter);

6. The raised seal of the Court

Once this Letter is issued, it will need to be provided to whatever institution the Executor will need in order to collect the assets. It also needs to be provided if the the Executor needs to obtain information on an account or other asset.

In North Carolina, the Court provides five (5) Letters Testamentary which is included in the filing fee of $88.00. If the Executor needs additional ones then they are $1.00 each. For a list of additional Court fees please see http://tinyurl.com/probatefees.

Keep in mind that unless the Court is satisfied with the initial filing documents, the Letters will not be issued.

The Difference Between Ownership Via Joint Tenancy and a Living Revocable Trust

Sabrina Winters — Mon, 19 Jul 2010 14:00:14 +0000

Recently, one of my clients asked about joint tenancy ownership, as they had put their children on the deed to their home in joint tenancy. It got me to thinking about the different forms of ownership and how to explain why you would want to consider holding your assets in a living trust instead of in joint tenancy.

There are different ways to hold title to properties if the property is not in a living trust. When two or more individuals own property together — whether it’s a condominium, a home, or a piece of land — the relationship between the owners is known as “tenancy.”

Tenancy comes in three main forms: joint tenancy, tenancy in common, and tenancy by the entirety. Each has advantages and disadvantages.

Under the joint tenancy form of ownership, two or more individuals jointly own an asset. When one of the joint tenants dies, the ownership passes to the surviving joint tenant(s), and will eventually pass to the last surviving party. Tenancy in common has a decedent’s share pass through probate to the heirs of the decedent.

Tenancy by the Entirety is essentially the same as joint tenancy, except that it is available only to a married couple and may only be terminated by joint action of both owners. Upon the death of one spouse, his/her interest automatically passes to the other spouse, as with joint tenancy, but the creditors of one spouse cannot attach the property or force its sale to recover debts unless both spouses consent.

There are several major disadvantages to both joint tenancy and tenancy in common. First, creditors can attach the tenant’s property to satisfy a debt so if your child gets in a car wreck, the whole asset is subject to the claim. Another is that if a property is held in joint tenancy with a child or someone other than a spouse, the asset is deemed as a gift, and the portion of the gift does not get a step up in basis — as well as may be subject to gift taxes!

Though joint tenancy avoids probate upon the first death(s), it DOES NOT avoid probate on the death of the last tenant named. Also, the decedent’s estate tax exclusion has literally been “thrown away” and can’t be used. It also will not allow community property treatment in community property states, as joint tenancy will take precedence over community property rules, thereby receiving a step up in basis on only half the asset.

Holding assets in a good living trust with specific provisions to obtain full advantage is a preferable method of holding title. It’s far better to keep the asset in the client’s living trust and get a full step up in basis when they die, so the spouse (in community property states) and the children inherit at the market value as opposed to the original cost basis of the parent. This also will protect against creditor claims of the other “tenant” such as a child, allows each spouse to use their full federal estate tax exclusion, and transfers title to the assets without having to probate the asset.

How family values factor into an Estate Plan

Sabrina Winters — Tue, 13 Jul 2010 14:00:26 +0000

My girl friend recently tried to make homemade tomato sauce. I don’t mean opening a can of purée and adding some seasonings. I mean using tomatoes fresh off the vine from her back yard, boiling, peeling and cooking them. It is some chore, but when it is all said and done, it is mouth watering! My parents are Italian immigrants and when I was young we spent summers with family in Italy and part of the family cultural experience was spending a hot day burning our fingers from handling so many tomatoes. It didn’t seem like much fun then, but at the age of 40 it is a memory I have never forgotten; I think back on it fondly.

My parents have always raised us with their traditional values and beliefs. I have been blessed with healthy parents whom are still with me and able to enjoy my daughter and pass along the same traditions to her.

Typically when people think about estate planning they think about the basics: who gets what and how much. When clients leave my office they know differently. It is about more than money and “things”. It is about making certain that your children are continued to be raised with values, traditions and beliefs that, as parents, you want to see they are continued to be exposed to. It is about encouraging your children to succeed and continue to be exposed to religious education and family values.

We are not your typical estate planning law firm. We work with our clients to determine how to pass along values and traditions by discussing options; what will work best for their family. We explore guardian options and what specific concerns they may have.

As part of the plan, our clients are provided with a Guardian Letter. This is a letter from the natural parents to the guardian where the natural parent can express their feelings on how they would like their child raised. They can express their desire that they attend a certain church because maybe it has been a big part of their lives. In addition they can express their values regarding volunteering or learning to save or education. Leaving the guardian with guidance in their own words is invaluable not only to the guardian, but to the children. It is leaving a little piece of the past for the future.

10 Events that Signal a Review of your Living Trust

Sabrina Winters — Mon, 05 Jul 2010 14:00:53 +0000

You get married or divorced
Your spouse dies or becomes incapacitated
You have a new grandchild
Your child marries or divorces
Your child becomes ill or disabled
One of your beneficiaries proves to be financially irresponsible
You retire from your business or profession
You acquire property in or move to a different state
The value of your assets have increased
There have been law changes that may affect the language of your document

If you experience any of these events, please contact Sabrina Winters, Attorney at Law, PLLC

at (704) 843-1446 to schedule your review appointment.

Top 4 Beneficiary Issues to Consider with your Retirement Accounts

Sabrina Winters — Thu, 01 Jul 2010 14:00:27 +0000

Have you checked your beneficiary designation for your retirement account recently? If not, you may find that your designated beneficiary is not who or what you think it should be, especially if you have divorced, remarried or had children since your retirement plan account was established.

1. Outdated Beneficiary Designations

There have been numerous cases of retirement-account owners who have been divorced and remarried but have neglected to update their beneficiary designations accordingly. This can be quite frustrating for their survivors, who must battle in court for a legal determination of the true beneficiary. The court’s decision, however, may not necessarily be what the deceased would have wanted.

A similar dilemma arises if children are named as beneficiaries but the document has not been updated to include those who were born after you set up your account. To prevent these situations, you should update your beneficiary designation periodically or even immediately after you experience a change in family status. Should you need to, you may submit a change-of-beneficiary form.

2. Per Stirpes Designations

In the event your child predeceases you, a per stirpes beneficiary designation would allocate that share to the that child’s issue – your grandchildren. If you don’t name them, they will be disinherited from taking the share of their parent.

3. Make Provisions for Simultaneous Death

Many spouses, expecting that one will predecease the other, name each other as their designated beneficiaries. The issue of simultaneous death is then addressed by state law, which will determine that one spouse died first, even though both deaths occurred at the same time. This determination is critical, especially if there are children from a previous marriage: will all the children be included? Or will children from a previous marriage be excluded? Proper documentation designating successor beneficiaries for normal and extenuating circumstances will ensure that the retirement-account owner decides who the successor beneficiary is.

4. Look into a Trust for Your Distributions

If you feel you need to retain some degree of control over the disposition of the retirement assets after your death, you may consider designating a trust as your beneficiary. Designating the right type of trust as your beneficiary could offer these benefits: allow you to provide financial support for your surviving spouse while ensuring that children from previous marriages are also provided for; helping to maximize your estate tax exclusions; and controlling distributions to the children you might think are not mature enough to handle a large IRA. Trusts require expertise to set up correctly, so please ask me for some assistance before you make any decisions regarding customized and/or trust beneficiary designations.

Beneficiary Designation Checklist

Check the default provisions of the document that governs your retirement account, as it may come into effect if your beneficiary predeceases you and you fail to make subsequent changes.

1. Look into the tax implications for the kind of beneficiary you choose, whether a particular person, such as a spouse or non-spouse, an entity, such as a charity, your estate or a type of trust.

2. Request a confirmation of receipt of the designation from your retirement account trustee, custodian or administrator. Documents do not always reach their intended recipient and/or may get lost in transit. Beneficiary designations are considered in effect only if they are received by the responsible party (e.g. trustee, custodian or administrator) before the retirement account owner dies.

3. If you prefer to use a customized beneficiary designation, make sure your trustee, custodian or administrator finds it acceptable. Not all financial institutions or qualified plans will accept customized beneficiary designations.

4. Check with your financial institution periodically to determine who your beneficiary is – you may need to make changes if you had a change in your family such as a birth, death, divorce or marriage.

Making a proper beneficiary designation is a very important part of your financial planning process. I would will be happy to assist you in reviewing your current beneficiary designations to see if they are up to date and/or if you need to make changes.

Please contact Sabrina Winters, Attorney at Law, PLLC at (704) 843-1446.

Top 5 Estate Planning Mistakes

Sabrina Winters — Mon, 28 Jun 2010 14:00:40 +0000

I recently read a report that suggested that only about 20 percent of the population has a formal estate plan. After reviewing the points below, please take a minute to consider whether it’s time for you to create or update your estate plan.

Here are a few of the top 5 estate planning mistakes that people make that can be avoided.

1. Dying without a will or trust - If you die without a will or trust, the state in which you reside and the IRS will simply make one for you. Of course, they have no interest in avoiding or reducing estate taxes, minimizing estate administration costs or protecting your family and legacy. The distribution of your assets will just be turned over to the Probate Court. The probate process is needlessly time consuming, frustrating and expensive. It is also open to the public, meaning creditors, predators or anyone else will have complete access to all information about your estate. For the vast majority of people, the benefits far outweigh any initial costs.

2. Having an “I love you” will – An I love you will is one in which all the decedent’s assets have been left to the spouse. On paper, it might seem to be a caring, thoughtful gesture, but the reality is quite different, because such a will simply passes the complex issues and problems associated with transferring and protecting wealth onto the spouse or other loved ones. It creates more problems than it solves, particularly for future generations.

3. Giving property outright to your children – Here is another solution that might sound good at first, but ignores several important realities. For instance, what if the child in question is too immature to handle the responsibility of a large sum of money on his or her own? What if the child suffers a severe financial setback that puts the inheritance at risk to creditors? What if the child marries a fortune-hunter, is addicted to drugs or alcohol, gets divorced or remarried? You may need to protect your children and heirs from their own poor decisions. These assets are also gifted assets which carry potentially large IRS penalties if not handled properly.

4. Owning property jointly – There are two types of joint ownership, Joint Tenancy with Right of Survivorship (JTWROS) and Tenants in Common (TIC). Problems with JTWROS include postponement of probate only until last tenancy, the loss of the double step-up in tax basis creating more to pay in capital gains taxes, and outright distribution. With TIC, you also lose the double step-up in tax basis where it’s available, and your property is subject to the estate plan of each tenant as well as probate for each tenant.

5. Not having a trust – A trust is the single most effective estate planning tool available. There are many different types of trusts. Among the better known and more commonly used are revocable trusts, irrevocable trusts and testamentary trusts. A Trust protects your privacy, and will help you leave what you want, to whom you want, in the way you want at the lowest possible cost overall.

Post Funeral Planning Checklist

Sabrina Winters — Sat, 26 Jun 2010 14:00:18 +0000

This list is meant as a starting point on what should happen after someone passes away. You should consult with an experienced probate attorney before taking any action.

Items to Find and Secure:

The Last Will and Testament and Trust Documents
Keys to safe deposit box
Life insurance policies
Business partnership agreements
Decedent’s checkbook
ATM card
credit cards & address book
Bank account statements
Marriage certificate
Veterans records
Retirement plans and employment records
Tax returns
Important & valuable family keepsakes

Items to Collect:

Current monthly bills
medical bills
bank statements
Checks received in the name of the decedent
Keep receipts for funeral expenses and any “out of pocket” estate expenses. Executor should accumulate list of assets and liabilities and debts
Note due dates on bills
Note the legal title descriptions on all accounts, assets and debts
Take pictures of home for quick inventory of contents (with no surviving spouse)

Contacts to make:

Family and Friends that could not be reached for funeral
Minister, priest or other support resource
Estate Attorney
Executor or Attorney to deliver Last Will & Testament to probate court
Accountant
Social Security
Veterans Administration
Insurance companies (regarding life, health, property insurance & annuities)

Family Care Issues:

Be mindful of family member bereavement issues and healthcare
Maintain security of home and property
Note family “issues” or disputes
Spouse may use joint account to pay bills, but others should not use decedent’s checkbook, credit cards or ATM card or auto
Consider a memorial or donation that the; family, beneficiaries and Personal Representative believe to be a fitting remembrance.

Starting the Probate Process and Responsibilities:

Getting the Last Will and Testament to the probate court will allow the Personal Representative (upon appointment) to pay bills. Probate assets (assets held in decedent name) or personal property items should not be distributed to beneficiaries without court approval. Executor, Personal Representative (or Attorney) should maintain possession & control of property and all important records and documents.

Contact Sabrina Winters, Attorney at Law, PLLC at (704) 843-1446 and will would to assist you and answer any questions you may have.

Planning for Incapacity

Sabrina Winters — Thu, 24 Jun 2010 14:00:58 +0000

In the area of estate planning, there are many different aspects that you will have to consider. One of these areas is what will happen if you are incapacitated. Here are a few things to consider about planning for potential incapacity in the future.

Choosing Representation If you are incapacitated, you may not be able to make decisions for yourself. If this were to happen, you would want someone to be able to make decisions for you. In order to plan for this possibility, you need to choose someone to represent you if this were to ever happen. In order to choose someone to make decisions for you, there are a few different steps that you are going to need to take.

Healthcare Power of Attorney and Living Wills One document that you will need to fill out is called a Health Care Power of Attorney, also known as Health Care Proxy or Advance Directive for Health Care. The healthcare documents are a vital part of the entire estate planning process. This is a document that will allow you to appoint someone to make medical decisions for you if you are unable to do so. Even after you sign this document, you will be able to make your own medical decisions as long as you are capable of doing so. When your primary physician decides that you are unable to make decisions for yourself, then the person that you appoint to make decisions for you will start to do so.

Your healthcare documents will be able to make many different types of decisions such as whether you should continue to be fed with a feeding tube or not. The individual should strive to make the decisions that they believe the incapacitated person would have wanted.

Power Of Attorney and Guardianship Have you ever thought about what would happen if you were unable to take care of your own affairs? If you are incapacitated, you may not be able to handle financial matters, and you need to choose someone to represent you in financial matters. In order to accomplish this, you will need to assign power of attorney to this agent. Without this vital document, if you become incapacitated, a court will have to appoint someone as to take care of your financial affairs and as guardian – with a great deal of grief, cost and time.

Someone that has power of attorney privileges can do many different things for you financially. This means that they can pay your bills and make sure your needs are taken care of. This agent can also perform real estate transactions for you, sell or purchase securities such as stocks or bonds, file your taxes for you if you are unable to do so, or enter into contracts on your behalf.

If you are a business owner, the person that you provide power of attorney to can actually run your business for you. They will be able to make important decisions regarding how your business operates with the help of other people in your business. With so much power, you need to make sure that you appoint someone that you can trust no matter what.

Avoiding Probate If your estate is large enough to have to go to the probate courts to pass your assets to your heirs, then you should have a revocable living trust to avoid the probate courts. Having your assets in a living trust allows you to appoint who you want to take care of passing your assets to your heirs swiftly and reasonably, without the unnecessary expense and time of attorneys and the courts.

Call to Action A properly drafted trust and documents prepared for you would include all of the documents discussed above and will help you avoid the problems and pitfalls associated with a problem-free transition if you should become incapacitated or pass away. Ask me how I can help. Contact our offices at (704) 843-1446 for your complimentary telephone consultation.

A personal family scare

Sabrina Winters — Wed, 23 Jun 2010 20:00:01 +0000

It is one thing to hear me say repeatedly how important it is to have a written plan for what you want to happen in case of certain situations…a healthcare issue for example. Emergencies really do happen and happen to all of us, even my family. Our family recently had a health scare with my father. He is 75 years old, very active and extremely healthy. So when he said he hadn’t been feeling well for a while, all sorts of scenarios ran through my head. Could his symptoms be a sign of a heart attack, stroke, another kidney stone? Luckily it wasn’t his heart, it was his gallbladder. It had gotten so infected so quickly that it gave him symptoms that could have been mistaken for many other conditions.

He had surgery, had it removed and is finally recovering to almost 100%!

What gave my father peace of mind (and mom and all three children) was that we knew what he wanted if God forbid something went wrong during surgery. He had a Health Care Power of Attorney already written and signed ready to present to the hospital when we checked him in. He was given the hospital’s form of a Health Care Power of Attorney, but those are only valid for the particular stay and procedure, and are very limited. And of course, are generally done under such stressful situations, that the patient is often not aware completely of what he is signing or the effect of his signature.

We are happy that dad is better now and getting back to his normal self and comforted that his wishes will be carried out if the need ever arises.