Is Estate Planning Just For What Happens After I Die Or Can Estate Planning Benefit Me During My Lifetime?
In my experience, it is often much more important to plan in anticipation of incapacity during your lifetime. For example, what would happen if one spouse becomes incapacitated, needing to go into a nursing home and the other spouse needs to sell the primary residence during that time?
In North Carolina, if a person becomes incapacitated, the process by which somebody without an estate plan is handled is through a guardianship process. That is essentially a lawsuit filed against the incompetent person to have them declared incapacitated. A sheriff is dispatched to serve legal papers on the incapacitated person, specifically a summons to appear in court. This summons may be served, at the person’s own home, a nursing home, or even sometimes a hospital. I have noticed that a lot of elderly folks become very resentful of this process and if they are not declared incapacitated, may decide to amend their estate plan to disinherit the individuals that initiated the incompetency proceeding.
If the court determines that somebody is incapacitated, then they are assigned a guardian. A person may be appointed as the “guardian of the estate” of an incapacitated person. The guardian of a person’s estate is responsible for managing all the incompetent person’s assets, including financial assets and real estate. The guardian generally has absolute control over those things. However, the guardian is required to report all receipts and disbursements and assets of the incompetent person’s estate. In addition, a person appointed as guardian of an estate is usually required to purchase a bond to reduce the risk of mismanaging the assets or disposing of the assets in a manner that is not permitted under North Carolina law. To be bonded, the guardian of an estate must qualify for a corporate bond issued by an insurance company. Most bonding companies will perform a credit check before issuing a bond. Without a near-golden credit score, it may be difficult to qualify for a bond. Without a bonded family member as guardian, there’s a risk that someone else from the community, usually a lawyer appointed by the court, will be assigned by the court to watch over that spouse’s assets. Again, this could be easily cured by engaging a competent estate planning attorney to plan around that contingency.
For information on Estate Planning Law in North Carolina, an initial consultation is your next best step. We can provide the legal guidance and thoughtful information you need to make informed decisions. Call our firm at 704-248-6325 to schedule your appointment.