ESTATE PLANNING

AN OVERVIEW
A Look at the Anatomy of the Basic Estate Plan As Well As the More Complex Estate Planning Techniques

MARK O. COSTLEY
NORTH CAROLINA ESTATE PLANNING ATTORNEY
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The process of estate planning involves the execution of various different legally binding documents. There are basic estate plans, and more complex estate plans. First we will look at the anatomy of the basic estate plan, and then we will take a glance at some of the more complex estate planning techniques.

THE LAST WILL OR LAST WILL & TESTAMENT

A very common estate planning device is the last will or last will and testament. Just about everyone has heard of this document. It is used to record your final wishes regarding how you want your financial assets distributed among your heirs after you die. There are a couple of other things to consider if you are using a last will to arrange for the transfer of your assets. Someone has to actually conduct the business of the estate after you pass away. This individual is called the executor or personal representative. It should be noted that a female estate administrator is sometimes called an executrix. When you are planning your estate you should include the choice of an executor. This is not a ceremonial role. There are very real business-oriented tasks that must be completed. As a result, you should select someone who has a good bit of business acumen. The executor that you choose should also have

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the time and the inclination to handle the estate administration tasks. If you are the parent of a minor child or children you could nominate a potential guardian in your last will. This person would care for the children should it become necessary. If you don't choose a guardian in your will the court would be forced to choose a guardian if both parents were dead. The court's decision may not be consistent with your own choice, and this is why you should nominate a guardian in your last will.

PROBATE
The heirs to the estate don't receive their inheritances until your estate has been probated when you arrange for the transfer of your personal property through the execution of a last will. Because of this delay many people will choose to arrange for asset transfers outside of probate. This can be done in a number of different ways. You can add an additional owner to your property through joint tenancy with right of survivorship. Another option would be to open payable on death accounts and name beneficiaries who would assume ownership of the accounts in the event of your death. The above courses of action are generally not recommended by estate planning attorneys because certain difficulties can arise. A more comprehensive probate avoidance solution would be a revocable living trust. With this type of trust you don't surrender control of the property that has been conveyed into the trust while you are living. However, after you pass away the trustee that you choose distributes the assets that remain in the trust to the beneficiaries in accordance with your wishes.

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The distributions of assets out of the revocable living trust take place in a direct manner outside of the process of probate.

INCAPACITY PLANNING
It is important to prepare for the possibility of incapacity when you are preparing for the latter stages of your life and your eventual death. This is done through the execution of a living will and durable powers of attorney. A living will is used to express your wishes regarding the utilization of life preserving measures. These measures would include things like artificial nutrition, hydration and respiration. In your living will you can choose to accept these measures should you become incapacitated, or you can instruct doctors not to use artificial life support measures. With a power of attorney you name an agent to act in your behalf. There is a general power of attorney that would give the agent sweeping powers. One could also execute a special power of attorney that would give the agent the ability to act under certain circumstances or for a single transaction. These powers of attorney would not remain in effect if you were to become incapacitated. As a result, incapacity planning involves the execution of

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documents called durable powers of attorney. With these legal devices you empower agents of your choosing to make health care and medical decisions in your behalf in the event of your incapacitation. While we're on the topic of incapacity planning, it should be mentioned that you can name a successor trustee if you use a revocable living trust to transfer your assets. If you were to become incapacitated, this trustee would administer the trust's assets.

ADVANCED ESTATE PLANNING

Some circumstances call for more advanced estate planning strategies. For example, if you were to give a direct inheritance to someone with special needs who is receiving government benefits his or her benefit eligibility could be jeopardized. This type of situation is addressed by making the individual in question the beneficiary of a supplemental or special needs trust. The trustee could use funds that have been conveyed into the trust to improve the quality of life of the beneficiary without affecting benefit eligibility. The estate tax is another factor. If you are exposed to the estate tax you must take steps to gain estate tax efficiency. Advanced estate planning techniques could be utilized to protect assets from

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creditors and claimants. It is also possible to create a trust that would protect a spendthrift from burning through his or her inheritance too quickly.

CONCLUSION
Estate planning is a must for all responsible adults. It is a matter of executing legally binding documents. Given this reality, the intelligent course of action is to retain the services of a licensed estate planning attorney when you are making preparations for the future.

REFERENCES
Forbes http://www.forbes.com/sites/janetnovack/2012/10/14/the-forbes-guide-toestate-planning/ American Bar Association http://www.americanbar.org/groups/real_property_trust_estate/resources/estat e_planning.html

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About the Author

Mark O. Costley With more than nineteen years experience in private practice, Mark Costley has helped hundreds of North Carolinians with estate planning, living trusts, financial law and probate, estate and trust administration. A partner with one of the largest and most vibrant estate planning practices in the Research Triangle area of North Carolina, Marks areas of practice are estate planning, trust and estate administration, planning for children and adults with special needs, business succession planning and business transactions, representation of non-profit organizations, family charitable and philanthropic counseling, civil dispute mediation, and business, estate and trust litigation. Marks work involves elements of teaching, strategic analysis and planning, negotiation, documentation, and assisting clients in executing their plans. Mark is devoted to providing clients with the best in estate planning, estate administration and financial services law. Mark is also a certified court mediator. Mark was drawn to and estate planning and financial planning law because of a passion for helping clients and their families avoid problems and helping them to have the necessary tools to preserve their wealth, prepare for the future and deal with problems when they do arise. Consistent with the philosophy of Walker, Lambe, Rhudy & Costley, P.L.L.C. to be Your Counsel, Mark and his colleagues in the Estate Planning Group strive to have strong relationships with clients and their families in order to be of the greatest assistance possible when legal counsel is needed. Walker Lambe Rhudy Costley & Gill, PLLC www.organizeyourassets.com Palladian Corporate Center 240 Leigh Farm Road, Suite 100 Durham, NC 27707

Estate Planning: An Overview

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