Top Five North Carolina Estate Planning Techniques
Unfortunately, many Americans do not have an estate plan in place. Many of us are extremely busy and put off estate planning, or we just do not enjoy thinking about what will happen after we are gone. Nonetheless, estate planning is incredibly important. Taking the time to create an effective estate plan will help you protect your assets now and ensure that you will provide for your loved ones after your death. We have created a list of five essential estate planning techniques that will help you create effective estate plans that achieve your goals.Create a Revocable Living Trust
There are many different types of trusts that North Carolina residents can use as part of their estate plans. One of the most popular types of trust is called a revocable living trust. Revocable living trusts are popular because they allow you to maintain control of the trust. You can revoke or cancel these types of trusts during your lifetime. Additionally, when you transfer ownership of your assets into a revocable living trust, your beneficiaries will not need to go through the probate process to access the funds in the trust. Instead, upon your death, they can access the funds you allocate for them automatically.Create an Irrevocable Life Insurance Trust
Irrevocable life insurance trusts are also common. These trusts hold your life insurance policy outside of your estate. Transferring your life insurance policy into an irrevocable life insurance trust allows you to keep the proceeds of the life insurance policy from being taxable with the rest of your estate. After you pass away, your beneficiary or beneficiaries can access the liquid assets from the policy to pay off debts, pay final expenses, and pay estate taxes.Create a Health Care Power of Attorney
Estate planning is not only about protecting your assets. It is also about protecting your right to make decisions during end-of-life care. Creating a healthcare power of attorney will allow you to appoint a friend or loved one to act as your agent and make healthcare decisions for you if you become incapacitated. When you create a healthcare power of attorney, you ensure that your wishes will be followed if you are no longer able to make decisions yourself. You can also stipulate which types of end-of-life care or emergency care you would prefer to receive, such as whether you would like aggressive measures to be taken, and what type of pain medication you would like to receive.Create a Durable Power of Attorney
Durable powers of attorney are similar to health care power attorneys in that they allow you to appoint an agent to make decisions for you. However, durable powers of attorney only provide your agent with the authority to make financial, personal, or business decisions on your behalf, not healthcare decisions. Appointing a power of attorney is important because if you become incapacitated, your agent will be able to access your accounts, manage your investments, and pay your bills for you.Create an Education Trust
Many people are interested in helping their children and grandchildren succeed in life after they are gone. While some clients decide to give their children and grandchildren money outright, others would like to provide their loved ones with financial help for specific purposes, such as obtaining an education. When you create a grandchildren or children's irrevocable education trust, you can ensure that your loved ones will only use your assets for the purpose of obtaining an education. Doing so will prevent them from misusing the assets you provide them, so long as you include certain vital language.
When you create the education trust, you can specify which types of educational opportunities the trust will cover. For example, you could stipulate that your child or grandchild must attend a four-year college or university and actively seek a diploma. You can also include a Spendthrift provision that works to restrain both voluntary and involuntary transfers of trust assets by your child or grandchildren. Meaning, a spendthrift provision can prevent your child or grandchild from misusing the trust and can prevent certain creditors from claiming rights to trust assets.Contact an Experienced Charlotte Estate Planning Lawyer Today
Whether you need to create an estate plan or update your estate plan, Arnold & Smith, PLLC is here to help. Our estate planning lawyers will tailor your estate plan to your needs and goals, helping you protect your assets and provide for your loved ones after you are gone. Contact us today to schedule your initial consultation with our Charlotte, Mooresville, and Monroe lawyers.