FREQUENTLY ASKED QUESTIONS

You don’t know what you don’t know. You may try to fix your own car or your own plumbing and immediately figure out that you’ve gotten in too deep, you then proceed to hire a professional mechanic or plumber. With estate planning, you can certainly try to do it yourself, but unlike with a car or plumbing you will not know whether you have gotten in too deep until it is too late to do anything about it. As I am sure you have experienced in life, fixing something after the damage is done is frequently more expensive than doing it right at the outset. And, when it comes to estate planning, if the person is incapacitated or deceased you may not be able to fix the problem, or, if you are, it will probably be more expensive than had their estate plan been done correctly at the outset.

1. Competency. I focus my practice entirely on matters concerning Estate Planning and Estate Administration. I know what the law is, and I can identify how the law impacts your specific situation. Every year I attend conferences, take continuing education courses and enroll in trainings specific to these areas to ensure that my skills and knowledge are up to date.
2. Education. Many of my clients are looking to draft a will or trust for the first time. I listen to clients and their specific goals and then give them my legal opinion as to how to best achieve those goals. But it’s more than that – I don’t just tell you that you need a Trust – I explain the reasons why a Trust may be an option, I go over the pros and cons, the risks and benefits and I provide options. I want my clients to be as invested in their planning as I am. I’ve found that knowledge is power and that the more educated clients are about their estate planning the more peace of mind they have and feel more empowered to spot issues which may affect their planning in the long term.
3. Individualization. When you hire us, we don’t just put your name in a template of a mass-produced document, click print and ask you to sign on the dotted line. We sit down with you and counsel you concerning some of the most important decisions. We help you evaluate your choices for power of attorney, guardian, executor, etc. We talk you through your options and we advise you of our legal opinion based on your individual goals. It is our hope that we become your trusted advisor for matters concerning family, finances and health.

Probably. But your best bet is to hire an attorney who drafts wills, trusts and power of attorney documents as part of their everyday practice. In my estate administration practice, I’ve seen documents prepared by attorneys who do wills “on the side,” that leave the family in a worse position than had that individual not had a will at all. Charlotte is a big city and there are many attorneys, whom, like myself devote the majority of their practice to drafting wills, trusts and other documents, I would recommend you hire one of those attorneys to assist you.

In short a financial power of attorney, is a document in which you appoint a third party to handle financial matters for you. “Durable,” means that it survives incapacity, so it is valid when you have full capacity and it continues to be valid if you lose capacity. Without a power of attorney for finances, if you become incapacitated and cannot manage your own financial decisions, you leave it to the court to appoint an individual to handle them for you. At that point, because the court is involved your private matters become public and the court steps in to provide oversight. For some people, for example those who do not have a trusted person that could manage their finances, getting the court involved can be good, but for most people relying on the court is not what they would choose for themselves.

The health care power of attorney is a document in which you appoint a third party to handle your health care decisions. Unlike a financial power of attorney, the health care power of attorney only springs to life, if and when you are no longer able to communicate your decisions to your health care providers. Without a health care power of attorney, if you become unable to communicate your decisions, the court will appoint an individual to speak on your behalf. Often, health care decisions, more than financial decisions exist in the grey areas and are not black and white. Health Care decisions are sensitive matters best left to be made by those who love and care about you the most, so why let a stranger decide?

A health care power of attorney can be called different things in different states, some other names for the health care power of attorney are: health care agent, health care proxy, health care surrogate, health care representative, health care attorney in fact, patient advocate.

• Side Note – If your child is going away for college and is at least 18 years old, we recommend the child sign a health care power of attorney. This is because at 18, the child is no longer a minor and if a medical emergency arises, without a health care power of attorney, the parents may not be able to obtain medical information on their child. This is especially important if the child is going to college in another state.

It’s logical to think that if you have a health care power of attorney, that document would be sufficient for your power of attorney to have access to your medical records. Unfortunately, this is not always the case. Under the HIPAA (Health Insurance Portability and Accountability Act), there are instances where certain medical information will not be released without a specific HIPAA authorization on file. To make sure that your designated individuals have access to the medical information they need, a HIPAA authorization is frequently used as part of Estate Planning.

This document deals with end of life decisions. If the only way your life is to continue is through artificial means, how does the decision around end of life take place? Do you name a point person to make that call, do you give a directive to discontinue life support or do you direct maximum care? The living will / advanced directive makes those wishes known. Often times, if there is to be family discord, it starts here and continues once you’re gone. If you make your wishes known, your sister can’t be mad at your child for doing what you requested them to do.

DNR is an order to your doctor to not perform CPR. It must be signed by your doctor. Typically, a DNR is signed in a hospital setting and is specific to that hospitalization. A DNR is an order to the medical staff to let you die naturally. The DNR and the living will can work together, but their scope and intent is different and a living will is more broad.

A MOST form is similar to a DNR in that it is an order to your doctor concerning your medical care. It must be signed by your doctor. Like a DNR, this document is frequently signed in a hospital setting and is specific to that hospitalization. A MOST form is broader than a DNR in that in addition to CPR decisions, it covers things like medications, feeding tubes, IV hydration etc. a MOST form may overlap with a health care power of attorney and living will, but it does not replace the health care power of attorney and living will.

Guardianship of minors is always decided by the judicial system, because the state of North Carolina must make sure that placing a minor child in someone’s care is in that child’s best interest. If the child has a surviving parent, there’s a strong presumption that placing the child with the surviving parent is in the child’s best interest. If there is no surviving parent, or the surviving parent is not fit, then the courts look to the deceased’s parents’ estate planning documents for guidance as to who to name guardian of the minor child. It is assumed that parents know what’s best for their children, and if they have named a guardian in their estate planning documents, the courts are likely to honor the wishes of the parents.

The most common way to designate a guardian is to name them in your Will. You can name one person as guardian or you can name co-guardians. You can provide a succession plan for guardians in case your primary guardian is unavailable. You can also name different guardians for different children. This decision and the drafting surrounding it is one of the most common things we counsel our clients on. This type of guardian is called a guardian of the person or custodial guardian.

It is seldom a good idea to leave assets outright to a minor child. This is because a minor child is deemed incompetent in the eyes of the law and therefore cannot control assets left to them. If assets are left to a minor, the court would appoint a guardian for the management of those assets – a guardian of the estate – to manage the inheritance for the minor child until the child turns 18. Then once the child turns 18, he or she gains access to their full inheritance.

• As a point of clarification, there are two type of guardianship – the custodial guardian – the person(s) with whom the child lives with and the guardian over the child’s estate (child’s inheritance) – the person or entity whom manages the inheritance for the child until the child turns 18. For some families naming one individual in both roles is completely appropriate. For others, who would like more oversight and a system of checks and balances, naming different individuals for those roles makes more sense. Keep in mind that even if you name a guardian over the child’s estate, without further planning, the child will still gain access to their inheritance at 18.

The most common way to accomplish this goal is to set up a Trust. A Trust does many things, but for this purpose a trust would create a set of rules and provide guidance as to how and when the child is to receive an inheritance. In the Trust you would also appoint a person or entity who would carry out the terms of the trust – this person’s role is called the “Trustee.”

In some states, yes. But in NC, not necessarily. Although, NC is really protective of spousal rights, the spouse doesn’t always inherit everything. If you are survived by children or parents, your spouse will probably have to share your estate with your children (even if they are minors) or your parents.

Yes! You have an estate – no matter how young or old or rich or poor you are. When you die, your estate is your assets and your debts. Someone must reconcile the debts against your assets and figure out what to do with what’s left over.

Just because you don’t have a Will doesn’t mean that you don’t have an estate plan. Each state has a set of rules as to what happens to your property when you pass away. For some people the state’s rules may make sense. For the vast majority, being able to control who manages your estate and who inherits from you makes more sense.

A document which provides instructions for how to settle your estate and names the Executor. During life, this document has no power. Since the Will becomes effective at death, it is not made public until such time. So, if you’re going to have a Will, you should make sure that it is done correctly.

Because no matter how young or old or rich or poor you are – you have an estate. And, since you have an estate you may want to retain control as to what happens to it. The only way to do so is through a will. The will appoints an Executor – the estate manager, and provides instructions for how to handle estate assets and debts and who should receive the leftover once the debts and assets have been reconciled.

The term for the person you appoint in your will to manage your estate when you die. Your estate is everything that you owned and owed in life. The Executor’s job is to reconcile your debts against your assets and distribute the remainder pursuant to the terms of your will. The Executor’s actions are supervised by the Court and the Court has the discretion to compensate the Executor out of the assets of the estate. The Executor can further enlist the help of professionals (attorney, CPA, financial planner) to assist in administration of the estate.

If you do not have a Will naming an Executor, the Court will appoint someone to fulfil the duties of administrating your estate. Some states call this person an Administrator, others call them the Personal Representative. Regardless the name, the Executor, Administrator and Personal Representative all serve the same role.

Probate is the process of having the document you signed and named as a “will” examined and validated by the court as meeting the definition and signing requirements of a “Will,” under the state law. When a will is “admitted into probate,” a court case is opened to administer the estate of the deceased individual. The estate administration process is a formal court process and is therefore time consuming with court and fees associated with it. The time, fees and costs are generally the reason why people are told they should “avoid,” probate.

For most people it is not possible to completely avoid probate – which is why a will is always necessary. The question really is, how do I minimize probate? The answer here is not a one size fits all, but the most comprehensive way to avoid probate is to create a Trust.

The honest truth is that you may not need a Trust. Everyone should have a Will, but not everyone needs a Trust. And, even if you have a Trust, you will still need a Will. That being said, utilizing a Trust as part of Estate Planning is appropriate for many of our clients, and we routinely recommend using a Trust when the circumstances warrant it. Common reasons for using a Trust are as follows:

1. When minor children or other minor beneficiaries are involved
2. Privacy concerns. Wills are public record when you die, whereas a Trust never becomes public record.
3. Beneficiaries with Special Needs: Making sure that distributions to these individuals don’t jeopardize that individual’s ability to qualify for benefits that are tied to income.
4. Planning for multiple generations. For blended families, a wife may want to leave her estate to her husband for his life, but then when husband dies specify that the remainder go to wife’s children. Similarly, parents may want to leave assets to their children for life, but retain control over those assets once the child dies so that the remainder either go to the grandchildren, or somewhere different.
5. Asset Protection – If you fear that you or any of your beneficiaries may have creditor issues, a Trust can assist in providing protection.
6. Protecting a Beneficiary from themselves. If the individual has substance abuse issues, or generally is wasteful with spending, a Trust could provide for a third party to manage that Beneficiary’s share.

A Trust is an entity, similar to a company, that owns assets which are managed and disposed of. Trusts come in many flavors, but what all trusts have in common is this:

• There is a person who creates the Trust – that person is known as the grantor/settlor/trustor.
• There is the person who manages the assets owned by the Trust – that person is known as the Trustee.
• There is the person who receives distributions from the Trust – that person is known as the Beneficiary.

Now depending on the purpose of the trust and the specific circumstances involved, the terms of the trust vary widely and are carefully crafted to each individual’s needs. For that reason, many Trusts have specific names such as: Testamentary Trust, Revocable Trust, Irrevocable Trust, QTIP Trust, Disclaimer Trust etc. Figuring out the type of Trust you need is why you should hire an attorney.

Estate Planning involves the creation of documents to make sure that your wishes are stated clearly concerning health care, financial and family matters. These documents are then used to carry out your wishes, if and when you are unable to carry them out yourself. In short estate planning allows you to retain control over the matters most important to you. Common documents used in Estate Planning include:

1. Financial Power of Attorney a/k/a Durable Power of Attorney
2. Health Care Power of Attorney
3. Living Will
4. HIPAA authorization
5. Will
6. Trust

Your will, along with most other estate planning documents is good and valid indefinitely, unless you stipulate in those documents otherwise.

The general rule of thumb is to review your documents every 3-5 years. However, if there is a change in your family structure, the law, or your wishes, you can update your documents at any time you deem necessary. Part of what we do, is we make sure you know what your documents say so that you know what sorts of life events may cause you to need to revise your documents.

Maybe. If your documents were valid in the state they were signed, they are valid in the entire United Estates. However, if you pass away in a state that is different than the state where your documents were drafted, there may be delay in effectuating your wishes because these documents will need to be authenticated by someone in the drafting state. Additionally, since different states have different laws the planning strategy to best dictate your wishes may have changed. We are always happy to consult with you about your current documents and make recommendations for changes if appropriate.

I wish I could just list a number here. Trust me, I want you to be informed about fees, and I want to be transparent about them as well. However, because we are not a one size fits all document mill, it is difficult for us to predict what the fee will be without sitting down for a consultation first. However, as part of the consultation, we discuss fees and provide a clear explanation for what services will be rendered. As guidance concerning fees, here are some things to keep in mind.

1. Consultation Fee – We charge a $300 consultation fee for estate planning matters. If the consultation is all that we provide, then $300 is what is owed. If after the consultation you decide to engage our firm for estate planning services, the consultation fee is rolled into your total estate planning fee. In other words, if you hire us, the consultation is free.
2. Flat Fee – We do not charge hourly for estate planning services in most cases. Instead, once we’re had a chance to sit down with you and discuss your specific goals, we will provide a flat fee quote for your matter. This flat fee will not change unless your planning changes.
3. Fee Collection – We are flexible with payment; however, we do require that payment is complete upon the signing of your documents.
4. Our fee compared with other attorneys – In our experience, when it comes to estate planning there are three types of attorneys.
   1. Those that tend to do estate planning on the side, they do not provide much planning insight and provide you with the same documents everyone else gets. These attorneys will charge less than we do.
   2. Those that work for big and/or specialized firms, handle complex and/or high net worth issues for individuals and businesses. These attorneys will charge more than we do.
   3. Those that focus their practice on estate planning and provide an individualized approach for regular folks. This is our firm, and there are other excellent attorneys and law firms that fall into this category. Our fees are commensurate with the attorneys and law firms in this category – we have done the research.
5. Our fee compared with DIY estate planning – With DIY estate planning you just get document templates and you are responsible for completing and signing the documents yourself. There is no planning, no guidance, and no guarantee that these documents actually do what you want them to do. Furthermore, you’re left to figure out how to sign them yourself. In my experience, the signing portion is what gets messed up the most, and when that happens, it can make your documents invalid and worthless. Yes, we charge more than the online templates. Caveat Emptor.