Charlotte, North Carolina Estate Planning Attorney » Estate Planning

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.

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.

Advantages of a Revocable Living Trust

Sabrina Winters — Wed, 23 Jun 2010 03:16:40 +0000

Let’s look at some of the advantages of having a revocable living trust in place:

Avoids Probate - Probate is the legal process for transferring your property when you die. Assets named in trust avoid the costly and time-consuming court probate proceedings.

Avoids Multiple State Probate Proceedings - A living trust can be especially helpful in avoiding expensive multiple probate proceedings when you own real estate or other property in several states.

Changeable or Revocable - The living trust allows you to make changes (or amendments) to the trust document while you are still alive.

Protects Your Privacy – Trusts allow the transfer of your personal assets to remain private. The probate process may expose your estate to the public.
Eliminate Challenges to the Estate – The standard will can create family disputes at your death and be challenged for alteration by any member of your family. By using a trust, you avoid contests.

Segregation of Assets – This is useful for married couples with substantial separate property that was acquired prior to the marriage, as a gift or for inheritances.

Helps if You Become Incapacitated – A properly drafted living trust package will include Powers of Attorney for financial and medical needs as well as Living Wills and Nominations of Conservator.

Guardianship for Minors or Disabled Children – A properly drafted living trust package will include guardianship documents.

Estate Tax Minimization – While the main reasons for doing estate planning with a revocable living trust are stated above, you may also take advantage of some tax planning benefits with a revocable living trust. Trust tax planning should be completed with competent counsel of an estate planning attorney and your financial planner.

Disadvantages

While there are many advantages to establishing a revocable living trust, there are also some drawbacks: initial cost is higher than creating a will; you must make sure all your assets are in the Trust or you don’t avoid probate; there may be additional recordkeeping for the trustee; sometimes you are misinformed that there is asset protection with a revocable living trust but property is treated just like you own it in your own name; and there may be minor complications such as having to take property out of trust before refinancing.

Conclusion

While there are a few minor disadvantages of having a revocable living trust, the advantages far outweigh them. The peace of mind you receive from taking care of your estate while you are living and having it’s disposition settled is worth the investment.

If you would like further information about your estate planning options, please contact our offices at (704) 843-1446 for your complimentary telephone consultation.

An Explanation of the Current Status of the Federal Estate Tax

Sabrina Winters — Tue, 04 May 2010 14:30:29 +0000

In 2009 the Federal Estate Tax Exclusion was $3.5 million. In 2010 there is no Federal Estate Exclusion. What does this mean? It doesn’t matter how large your estate is, there will be no federal estate tax (often referred to as the death tax) if you die in 2010.

In 2009 there was a step up in basis. In 2010 there is no step up in basis. What does this mean? The basis of the property received in 2009 was equal to the value of the property on the date of death. The best way to illustrate this is with an example.

Example: Decedent purchased his home for $100,000. On the date of his death the home was valued at $150,000. If the death was in 2009, and the recipient sells this property for $160,000 the recipient’s capital gains would be the difference between $150,000 (the date of death value) and $160,000 (what it sold for)…$10,000.

In 2010, since there is no step up in basis, the capital gains would be the difference between $100,000 (the cost to the decedent) and $160,000 (what it was sold for)…$50,000.

What may save on this capital gains is that in 2010 individuals have a $1.3 million exemption. If the asset passes to a spouse there is an additional $3 million exemption. This means that the $1 million (or $1 million plus $3 million exemption) can be used to step up the basis of any property. This could ultimately avoid or minimize capital gains tax.

If congress does not act on this in 2010, we will revert to the 2002 exclusion per person in the amount of $1 million and the step up in basis returns due to the sunset provision in the 2001 Tax Reconcilliation Act.

Don’t risk disinheriting your future children

Sabrina Winters — Mon, 03 May 2010 00:41:31 +0000

I met with a couple last week who wanted me to review a Will they had prepared last year. They went to an on line website to do it themselves. They answered all the questions that popped up and received a nicely put together document.

The reason they had come to me was because they wanted to see if their Will had included the new child they had a few months before. They already had two children when they made their on-line will and had not anticipated having any additional children.

What I found after reviewing their self drafted Wills was that they were missing language that allowed for any future children to be included in their estate. The end result would have been that their current two children would inherit but their new baby would not!!! This would be ok, if that was what they wanted, but it wasn’t.

Our Firm corrected this and added many additional provisions. Now they have an Estate Plan that will not only work when the time comes, but will grow with them over the next few years.

A Great letter from the Presbyterian Buddy Kemp Cancer House

Sabrina Winters — Mon, 08 Mar 2010 03:14:27 +0000

I received a wonderful letter the other day from Marcia Lampert, the Director at the Presbyterian Buddy Kemp Caring House in Charlotte, North Carolina. The Cancer Center was referred to me by the North Carolina Bar to speak to their community regarding end of life planning.

It is hard to deal with our own incapacity and death when we are well, but there were many in the room battling cancer and truly needed for me to guide them in something they felt they had some form of control over. It was humbling for me to see people (there was standing room only!) who were exhausted from chemotherapy or in remission, but made it to a 6:30 p.m. event (to listen to me none the less!) because they knew how important it was. These people are no different than you and me, except that they have a sense of urgency because life has dealt them a challenge.

Read the full letter here along with other client and colleague testimonials.

Aid and Attendance benefit for Wartime Veterans – most Veterans are unaware of this benefit

Sabrina Winters — Tue, 02 Mar 2010 22:25:21 +0000

I am proud to announce that the Firm of Sabrina Winters, Attorney at Law, PLLC is now assisting wartime veterans and surviving spouses of deceased wartime veterans in receiving a special monthly pension benefit called Aid an Attendance. This is not a new program. Too many veterans are unaware that they may be entitled to it.

The Aid and Attendance may be available to wartime veterans and surviving spouses who have in-home care or who live in nursing homes or assisted living facilities. This benefit allows many to enjoy a higher quality of life when their cared needs have increased. Benefits range from $1,056 to $2,540 per month.

The Veteran must meet both Asset and Income requirements according to the Veterans Administration Rules and Regulations. However, if the Veteran exceeds these limits, there are carefully structured trusts that can be used to allow him or her to become eligible.

I welcome Veterans who are residents of North Carolina as well as their family members to contact our office with any questions so that we many provide you with the information necessary to understand the VA benefit and the application process.