You have been appointed as Executor/Executrix of a loved ones estate.....should you hire an attorney?

Administering an estate, especially one with more than just your basic assets, such as a home, and a couple joint bank accounts, can be very complicated.  On a  basic level, an executor must produce an inventory of all assets to the court, publish a notice to the creditors, pay taxes and funeral expenses, and make sure that all beneficiaries get exactly what they are due pursuant to the will.  Many times, an executor will not have extensive knowledge of the tax laws or estate laws of North Carolina, and that makes them subject to mistakes.  

In North Carolina, an executor can be held personally liable for the errors they may make in administering an estate for a loved one.  If they pay taxes improperly, for example, or distribute assets improperly to beneficiaries, they may be subject to fines or even being held in contempt of court.  If you are unsure of the laws of this state or uncomfortable with the basic steps of the probate process, you may want to consider hiring an attorney.

If you are administering the estate of someone who is a resident of North Carolina, but had assets in other states, you would have to file a probate estate in those other states, and you would want to hire an attorney in those respective states.  Most states, including North Carolina, require an out of state executor to appoint a resident agent of the state to accept service on their behalf.  

If you accept the position of Executor, but then realize you are in over your head, you can either hire an attorney to help you, or ask the court to relieve you of your fiduciary duties as executor.  There is a process to do this, and that is also something you may want to consult an attorney for.  

How can surviving family members deal with online accounts and other digital assets?

We, as a society, are gradually moving away from paper bank statements, jars with money in them, and instructions to loved ones scribbled on notepads.  With the growth of our online presence, our lives can be governed almost completely with our online activities, whether it be financially, socially, or professionally.  It makes it very difficult, if not impossible, for our loved ones to log on to our computers, figure out our passwords, and access accounts and other websites that we may have information on. 

There are a myriad of online programs our loved ones may need to access in order to know our wishes, get a complete picture of our assets, and effectively manage our estate.  Our lives and digital assets are defined by flash drives, ipods, blogs, facebook accounts, twitter accounts, email accounts, Flickr, Google docs, Youtube videos, online bank accounts, online CDs, online medical information, shopping accounts that contain credit card information, subscriptions and the list goes on.  

In order to plan for this, we need to consider some simple, yet rarely used, steps in order to make it easier for our loved ones.  

We need to simply have a comprehensive account of our digital assets.  When you die, the first thing your loved ones will have to do is identify and account for all of your assets to the court.  This will be very difficult to do, unless you leave a comprehensive list, including digital assets, of where to find your assets, and how to access them, including passwords, websites, etc.  

We also need to identify the appropriate person to be the executor our estates.  Many estate planning attorneys will tell you to select someone responsible and financially savvy, but I would also suggest selecting someone who is electronically savvy.  

We will have to provide the person or people we select to administer our affairs authority and access to these online assets.  You can consider selecting a co-executor to handle only the online assets, or use the websites or online accounts themselves to set up immediate access to your executor upon your death.  

In today's world, it's so important to think about our digital assets as an integral part of our estates and plan accordingly.  So much of the estate planning world is still antiquated, and doesn't take into account our online presence.

Please contact your estate planning attorney to make sure that your estate planning documents are up to date and take these steps into consideration.  

Hollywood Headliners: Live Like a Celebrity, Starting with a Name Change

           What do Katy Perry, John Legend, Miley Cyrus, Faith Hill, Elton John, and Bruno Mars have in common?  They all use names different names than the ones they were given at birth! From Peter Gene Hernandez to Bruno Mars, John Roger Stevens to John Legend, and Reginald Kenneth Dwight to Elton John, celebrities often change their names to something they feel better suits them. If you want to live like a celebrity, you can, even outside of the “big city lights” of Hollywood. By following several easy steps, you can legally change your name.

Each state has its own procedures in place to legally change one’s name, so make sure to check your own state’s rules. In North Carolina, there are several easy steps you must follow, which can be found in N.C.G.S. § 101-3 and § 101-5. First, you have to give the court a ten day notice of your intention to change your name. After the ten days have passed, you must file an application for a name change in the county where you live. The application must contain several key items: your true name, the county where you were born, your date of birth, your parents’ full names, the name you want to become your own, your reasons for changing your name, and your proof of good character.

In addition, you must also include a criminal history record check. You’ll need a sworn statement where you confirm you live in the county in which you are filing to change your name, as well as a sworn statement saying you do not have any outstanding tax or child support obligations. Wake County, North Carolina, for example, requires you to be fingerprinted along with obtaining a national criminal history record check, so make sure to look to your own county’s requirements and steps for obtaining these documents. Finally, you must include any previous name changes you have had. It’s important to know you can only change your name once, with only a few exceptions; be sure to choose a name that you want to keep long-term! “Lady Gaga” may sound good to you now, but you should be sure your name can “survive the times” as you get older.

If you are a minor, you can change your name, too. While you generally need consent from both of your parents, if you are sixteen or older, one parent’s consent may suffice if you satisfy one of the conditions in N.C.G.S. § 101-2(d). Wake County, for example, waives the affidavit of character for children under sixteen, so make sure to check your county requirements for the differences in changing a minor’s name. Also, if you have been married and want to change your current last name back to your maiden name, you do not have to follow these steps. Check N.C.G.S. § 101-8 and N.C.G.S. § 50-12 for your name change requirements. Finally, the steps listed above do not apply to adoption proceedings.

While not everyone can be on television or play sold out concerts every night, you can still experience a piece of “celebrity life” simply by changing your name, by following the few, easy steps your county requires. 

How does remarriage impact wills and inheritances?

Divorce and remarriage is a common occurrence in the United States, and most people put these issues squarely within the family law realm. However, people who remarry should also carefully consider their estate plans in order to ensure that all family members in their new “blended family” are addressed appropriately.

In an article titled “The Second Time Around: Smart Estate Planning Can Reduce Snags and Maintain Harmony in Your Second Family,”[1] Fidelity emphasizes the need for clarity and comprehensiveness in estate planning when dealing with a blended family.

Things to Consider:

1.       Obligations with former spouses through divorce agreement. Many divorce settlements and agreements include provisions that may impact retirement accounts, savings, and other assets. You may not be able to change the terms of any of these prior documents, and it’s important to know where your assets stand before creating a new estate plan. Your new spouse may not be entitled to a certain asset based on the terms of a divorce agreement. It’s also important to adjust any prior wills, trusts, or beneficiary designations from a previous marriage where you can. Otherwise, your former spouse may be legally entitled to assets that you’d rather your current spouse receive.

2.       Long-term goals for support of your spouse and any children or other family members. Because the complexity of a blended family can create confusion in the estate planning arena, you and your current spouse should be clear and honest with each other about where you intend for your assets to go. If there are children from a prior marriage and you’d like for them to be included in your estate planning (or not), it’s best to have that conversation with your current spouse so he or she is in the loop with your long-term goals and plans. Conversations, even difficult ones, are necessary to ensure that everyone’s wishes are carried out.

3.       Guardianship issues. When young children and former spouses are involved, guardianship issues may become particularly crucial. Discussing your plans with your current and former spouses about guardianship of young children is important to ensure that they are taken care of by the person who will best fit their needs.

4.       Marital assets from the second/current marriage. In order to create a detailed and accurate estate plan in a blended family, every single asset needs to be categorized in terms of what is separate or commingled. This can be impacted by anything tied to a previous marriage like certain trust accounts or even what is set aside for a child from a previous marriage. The type of marital property law in your state is also worth considering—this may influence what you can and cannot leave to your spouse or others. Additionally, the way you title accounts and the way that you designate beneficiaries in certain policies come into play when determining what assets are available to you in a remarriage. You want to be sure that all accounts and policies that are payable or transferable on death go to the person you want them to go to; if you left a former spouse’s name as beneficiary on a certain account, he or she may be entitled to those assets, even if you are remarried.

5.       Form of legal documents. Once you and your spouse have decided what you want and need from an estate plan, choosing the form in which you address your assets comes into play. If you choose to draft a will, make sure that it is very specific so that your wishes are carried out. In a blended family where conflict may exist among widespread family members, even the smallest things should be addressed to ensure a smooth execution. Establishing a trust is also something to consider; this allows you to specifically allocate assets in particular ways so that multiple family members are taken care of in multiple ways. Trusts offer some degree of flexibility, and many remarried individuals will use them to set aside assets for children from a prior marriage.

After remarriage, there are many things to think about when planning your estate. The complexity of a blended family means that all details need to be discussed and decided upon because multiple areas of the law may come up, requiring the assistance of different experts. It’s important to be clear in your intentions and address all possible concerns so your assets are distributed the way you want them to be.

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[1] https://www.fidelity.com/viewpoints/personal-finance/estate-planning-for-second-marriages

Special Needs: What are your options?

Most of us either have a relative or know someone who has a relative with special needs, and for these folks, estate planning may be especially important. Many individuals with special needs are unable to manage their assets, if any, and family members are often concerned about what will happen to their loved ones if a caregiver passes away. Long-term planning is essential to ensure that a relative with special needs is cared for and has the resources to live a happy and fulfilling life.

Many individuals with special needs receive government assistance, often in the form of Medicaid or Supplemental Security Income (SSI). If a will or trust is not properly drafted, the assets they receive from the will or trust may negatively impact the amount of money they receive in the form of public benefits. For instance, an individual with special needs may be completely ineligible for public benefits if he receives financial assistance beyond what the government offers, including assistance from a trust established for his benefit.

In order to avoid that situation and ensure that family members with special needs receive all of the public benefits that they’re entitled to, relatives may set up a supplemental needs trust, which is sometimes called a special needs trust.

Supplemental needs trusts allow individuals with a physical disability, mental disability, or chronic illness to have an unlimited amount of assets held in trust for their benefit and to receive all the government benefits they are entitled to. Typically, this will work on a “sliding scale.” This means that the funds in the supplemental needs trust will cover the needs of the individual that government benefits do not cover. For example, if Medicaid and SSI cover 40% of the expenses for an individual with special needs, the funds in a supplemental needs trust will cover the remaining 60%.

Family members must exercise great discretion in choosing a trustee—or, more helpfully, multiple trustees—to manage the trust. It may be beneficial to employ a team of professional trustees to manage different aspects of the trust and make sure that all of the bases are covered; this may include a corporate fiduciary trustee (like a bank or trust company), a care manager, a financial advisor, and a lawyer. It is crucial that supplemental needs trusts are properly managed and the assets are invested wisely. A loss of assets may be extremely detrimental to the beneficiary, and often these trusts have to last a lifetime. There is plenty of room for error without the proper guidance, and family members should choose carefully when deciding the terms of these trusts.

Supplemental needs trusts must be carefully drafted in order to ensure their effectiveness. These trusts require specific language to avoid conflicts with public benefits, and if written properly, guarantee that that funds in that trust may only be used for the benefit of the person with special needs. If you have a family member with special needs who would benefit from a supplemental needs trust, please contact an attorney who is familiar with creating these trusts and can offer guidance for establishing one.

Financial Exploitation of the elderly population is a growing problem...what can banks do to help?

My grandmother receives calls every couple weeks from someone pretending to be her grandson in trouble and asking her to wire money.  If my grandmother were one of the tens of thousands of elderly people who are suffering from cognitive decline, she may fall for this, as she has twelve grandsons.  I am thankful that my grandmother still has her mental faculties, but there are many elderly people who are not this fortunate.

In the last few years, financial exploitation of the elderly has become a huge concern, and is actually the most common form of elder abuse.  Elder consumers are typically more vulnerable than younger consumers because they are often lonely, are declining cognitively, and have health problems that make them unable to recognize such dangers.  The elderly population is also an easy and dependable target for predators as the elderly are more likely to have assets or, at the very least, a dependable source of income.

There is pressure on financial institutions to protect the elderly financial consumers, and banks and credit unions are in an opportune position to be able to be alerted to financial exploitation.

The Consumer Financial Protection Bureau has done a great job laying out certain recommendations that would help banks and credit unions be more likely to recognize and detect such abuse in their March 2016 "Advisory for financial institutions on preventing and responding to elder financial exploitation."  The recommendations are as follows:

1.  Develop, implement and maintain internal protocols and procedures for protecting account holders      from elder financial exploitation.
2.  Train management and staff to prevent, detect, and respond to elder financial exploitation.
3.  Detect elder financial exploitation by harnessing technology.
4.  Report all cases of suspected exploitation to relevant federal, state and local authorities.
5.  Protect older account holders.
6.  Collaborate with other stakeholders

There are many recommendations within each of these general guidelines, but the important thing to know is that the elder financial exploitation risk is growing as technological accessibility continues to improve.  All banks need to be aware that there is a problem, but there is also guidance, from groups such as the Consumer Financial Protection Bureau.  

What to Consider When Deciding to Purchase Long Term Care Insurance

Most people don't like to think of disabilities they may encounter or illnesses they may have to tackle, but it's something that we all need to consider.  In order to ensure that you are provided with care for the long haul in the face of an illness or disability, there are several factors you may want to consider.

1.  Your health:  Cost is always a factor and if you are relatively healthy, you will have lower costs associated with purchasing a policy, so it may be better to buy now, rather than wait until it's too late.

2.  Your age:  Younger age is also a factor in obtaining low cost long term health care policies.

3.  Your family and friends:  Do you have enough family and friends that will take care of you that the costs you may need for your long term care may be minimal?  If so, you may not need a large policy.

4.  Premiums and how much your income is:  If you have a fixed income and still have plenty of disposable income, long term care insurance may be a possibility for you, but you do not want to spend hundreds, thousands of dollars on a policy that you may not ever have the need for if you don't make enough money to cover all your expenses.

There are many other factors to consider, including taxes, your savings accounts, your assets, policies your partner may have, etc.  If you are interested in long term health care, please contact an attorney who can ensure your complete understanding of the benefits and risks of long term healthcare.