Yes you do, and here are nine reasons why you need a Will in North Carolina.
1. Choosing the legal Guardian of your children.
If you have children under the age of 18, one of the most important functions of your Will is to name the person who would become their legal Guardian. In the state of North Carolina, if you die leaving no Will to give the Court direction, then you play no role in choosing the person who becomes the caretaker of your children. This may result in multiple relatives applying for guardianship and competing against one another in a series of unhappy and expensive custody battles. If this drags out too long, children may have to live in foster care until a decision is reached. Sometimes, it is not clear to the Court whether there is a responsible family member who should take charge of your children. Ultimately a Court is forced to make a custody decision “in the best interest of the children” which may include the State’s foster care system.
You may use a Will to clearly state the person or people who you direct to care for your minor children in the event of your death. North Carolina Courts are obligated to respect your instructions. You can even choose a second or third backup in case your first choice is not available.
2. Risk of giving substantial funds to young children.
Many people are uncomfortable with the idea of their children inheriting their entire estate in one lump sum when they turn 18 with no guidance or boundaries. Many young people, even the most responsible or trustworthy, have little-to-no experience with wisely managing, investing, or budgeting significant sums of money. Without a carefully constructed Estate Plan (a plan for the transfer of assets at death which often includes a Will), the Court will simply hand over a child’s inheritance all at one time when they reach 18.
By creating an Estate Plan including a Will, you can help your children plan and invest by giving timed disbursements at designated ages beyond age 18. You can also appoint a trusted relative or friend to oversee and invest their money responsibly. In a Will you can leave specific instructions concerning college and health care needs, and provide for special needs if necessary.
3. Choosing Who Receives your Property.
This may seem simple, but unless you do a little planning, you may have no control over where your assets go when you die. Of course, the risk here is that it goes to the “wrong” people. Several types of laws come into play when determining where your property goes when you die. Accounts held at banks are subject to the bank’s rules. Investment accounts may be controlled by the investment company’s rules. Land is treated differently than investments in North Carolina, and if a person is married (or divorced) then the rules can be different still. How a deed is written may control who receives your land or home, or a deed may have no direction at all. Property inherited from your parents may be treated differently still. In the end, North Carolina has a final, controlling legal statue, the “Intestacy Statute” that states who is to inherit property when there is no Will or contractual direction. This law which divides assets up among your “family tree” has many levels depending on who in the family survives you. While all of this sounds complicated, Estate Planning and drafting a Will can smooth out the wrinkles and put you in control of who will receive your estate.
4. If you want your children to be able to stay in their private school
If your children attend a private school, the only way to guarantee this will continue is to include this directive in your Will. While a Court appointed guardian and trustee will be obligated to provide for your children’s education, this does not mean just any education. The Court appointed guardian and trustee may not approve a more expensive private school. Even if your children currently attend a private or religious school, they may not be able to continue attending that school unless you have a Will that directs funds be disbursed for that purpose
5. If you don’t want to co-own property with your in-laws.
Without a Will, there is a risk a surviving spouse could end up being a co-owner with their in-laws. If a jointly owned asset is held by a formal institution, like a bank or insurance company, then often that institution has a “contract” that dictates who will inherit the asset when one spouse dies. This may or may not be the surviving spouse (it could be your in-laws). If there is no controlling contract, then North Carolina’s Intestacy Statute determines who receives bank accounts, vehicles or property that you and your spouse own together.North Carolina’s laws and the interaction of these institutional “contracts” dealing with co-ownership are complicated, and a surviving spouse does not always become the sole owner after the first spouse’s death. In fact, it is possible a portion of your assets could pass to your parents or children, instead of your spouse. Often this creates an awkward co-ownership with the “in laws”. Blended families (second marriages) are even more complicated.
With a well-prepared Will and a coordinated Estate Plan, you or your spouse would be able to avoid any co-ownership confusion, and assure a surviving spouse will avoid the difficult situation of sharing ownership of estate assets with their in-laws.
6. Preserving family heirlooms.
Planning through a Will allows you to provide guidance to your children concerning family property, heirlooms or businesses. It can be difficult for a Court appointed representative to determine who should rightfully receive ownership of a family heirloom, or how to continue a family business. Instead, the Court appointed representative may choose to simply liquidate your estate, rather than be responsible for making a complicated choice. If you want to give the Court clear direction about your belongings, a Will is a proven way to prevent valuable family assets from being liquidated.
7. If you are separated from your spouse but not yet divorced.
If a couple is separated but not formally divorced, the estranged spouse may still be the legal beneficiary of a significant portion of your assets under North Carolina law. Many “separated” individuals would prefer that their estate instead go to their children, parents, brothers or sisters or other family. The interaction of family (divorce) law and estate law can be complicated. A Will can prevent confusion avoiding problems with a separated partner.
8. Reducing Costs to Family.
A carefully crafted Will can reduce processing costs, legal fees and time for your surviving family. Organization and clear direction is the key. Planning now leaves a clear path, significantly reducing legal and probate costs by providing structure, organization and finality. A small amount of prevention and planning now can save a large amount of stress and cost to your surviving family.
You work hard to save money or make prudent investments during your lifetime. A small “investment” in a Will may be one of the best and most effective investments you ever make.
9. If you don’t want creditors or collection agencies to apply for control of your assets.
In your Will, you will choose who takes charge of managing your finances and disbursing assets after you die. This person is called an Executor.
If you die without a Will, however, the Court is left to decide who will become your Executor, and you have no control over what person or organization they might choose. In the worst case, the Court may even appoint a creditor to be in charge of handling your finances. By resolving this ahead of time, you can reduce expenses and assure the appropriate person will be in charge.
Have questions or need guidance?
If you have questions or need professional guidance I encourage you to contact my Raleigh office today!
Co-authored by Seth Ingersoll and Shaun Ingersoll.