“Why do I need a North Carolina will?” – a common question I receive in social and on the internet. “But my situation is really simple – do I really need a will?” Regardless of your background, or your current financial and familial situations, everyone can benefit from having a valid Last Will & Testament (“Will”) in place. Below is a non-exhaustive list of benefits that and individual receives from putting a Will in place in North Carolina.
Married couples usually think all of their assets will automatically pass to each other if one of them passes away, because why wouldn’t that be that case? You’re married.
Unfortunately, unless your assets are beneficiary-designated to each other and you have a valid will naming the surviving spouse as your sole beneficiary, North Carolina’s default rules of intestacy split your estate with your other relatives. If you’ve got kids, the kids will take a share. If you don’t have kids but you’ve got surviving parents, your parents will take a share. Meaning your surviving spouse may not receive 100% of your assets.
This is true for personal, business and real property. Proactive planning, including a valid Will, makes sure everything goes to your surviving spouse.
The birth of a child if usually a significant life event that brings the estate planning discussion to the table. Most parents put a simple will in place to make sure their affairs are in order. But maybe you haven’t gotten around to it. Maybe you don’t see the point.
A valid North Carolina Will allows parents to appoint a legal guardian for their minor child(ren). The person appointed will step in to raise your children, and have legal decision making authority for the children, should both parents pass away before the children turn 18. The Clerk of Court, in the county where you live, will defer to your appointment of a legal guardian, rather than appointing someone they think is best for the kids.
Your Will can also appoint a trustee to manage your assets for the benefit of your kids until they’ve attained a certain age and level of maturity. Who wants their kids to get all their wealth at age 18? No one. Proactive planning, including a valid North Carolina will, allows your wishes to truly be followed – exactly how you envision them.
Real estate in North Carolina passes outside of the estate of the owner, meaning it’s a non-probate asset. However, even though it is non-probate, it is still directed by the Will of the owner. That means the real estate passes to the beneficiaries named in the will.
But what if your real estate is held in an LLC? Same conclusion, but different rules apply. When you hold real estate in an LLC, what you actually own is the LLC membership interest, not the real estate held in the LLC. LLC interests are treated as personal property in North Carolina, and are part of your estate after you pass. So, as part of your estate, the property is governed by your Will, or lack of Will (intestacy).
Either way – real estate needs a beneficiary. You name your intended beneficiaries in a valid North Carolina Will.