UNDERSTANDING INTESTACYIN NORTH CAROLINA
Because the Question of Inheritances and Intestacy Is So Important, Everyone Creating an Estate Plan Should Have a Basic Understanding of What Intestacy Is and How It Works
CHERYL K. DAVID North Carolina Estate Planning and Elder Law Attorney
One of the main reasons it’s so important to create an estate plan if you live in North Carolina is because it’s the only way to make certain choices under the law. One of the most important choices you can make by creating an estate plan is deciding upon the types of inheritance you want to leave after you are gone. If you don’t make these inheritance choices, you leave it up to state law to make them for you. State inheritances laws are generally known as laws of intestacy or intestate succession. These laws impose inheritance choices automatically unless you choose to act. Because the question of inheritances and intestacy is so important, everyone creating an estate plan should have a basic understanding of what intestacy is and how it works.
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LEAVING BEHIND INDIVIDUAL PROPERTY Intestacy laws were created because so many people die without leaving behind a last will and testament. Someone who dies intestate dies without leaving behind a will. When this happens, and that person leaves
It’s important to point out that while you can avoid intestacy laws by creating a valid last will and testament, the key word here is “valid.”
behind property, new owners will have to take possession of the property as the decedent’s legal heirs. But who are those heirs? Who is legally entitled to inherit property if a decedent didn’t make his or her wishes known? These are the questions that intestacy laws
answer. Every state has adopted a set of intestacy laws that apply to people who die in the state and leave behind property. When this happens, intestacy laws apply automatically regardless of the inheritance choices that person would have made.
VALID WILLS It’s important to point out that while you can avoid intestacy laws by creating a valid last will and testament, the key word here is “valid.” All states have laws that impose requirements on people who make wills. You can make any kind of document you like and call it your last will and testament, but unless it meets the requirements imposed under state law, no court will accept it. If you make a will that is invalid, you die intestate just like you would if you had no will at all. In other words, you have to make sure your will meets all relevant legal standards if you hope to avoid intestacy.
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INHERITANCES IN INTESTATE ESTATES The general idea behind all intestate succession laws is that they leave your property to your closest surviving relatives, or your next of kin. After you die, someone will take over managing the property you left behind. That person will have to determine who survived you after your death, take an inventory of what you own, use your property to pay any remaining debts, and then distribute the rest of the property as inheritances to your closest relatives. So, assuming that you leave an estate that has more assets than it has debts, who will inherit your property? That depends on who survives you. Let’s look at a couple of examples. You leave behind a spouse but no parents or offspring. Regardless of your family circumstances, if you die intestate in North Carolina leaving behind a surviving spouse, your spouse will be entitled to receive a portion of your estate. If you die without any surviving relatives and leave behind only a spouse, your spouse inherits all of your property. You leave behind a spouse and a parent. The situation gets a little more complicated when you leave behind a surviving parent and a spouse. In this situation, your spouse will inherit half of any real estate you have. Your spouse will also inherit a portion of your personal property. However, how much of that property your spouse inherits will depend on how much you leave behind. If you die with less than $100,000 worth of personal property, your spouse inherits all of it. If you have more than $100,000 worth of personal property, your spouse inherits the first $100,000 plus half of any remainder. Your surviving parent(s) inherits half of your real
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estate and the remainder of any personal property after your spouse takes his or her share. You leave behind a spouse and several children. When children come in the picture, the inheritance situation gets even more complicated. If you should die with a single child, that child will receive half of your real estate and half of the personal property you have after your spouse takes the first $60,000 worth. If you have more than one child, your spouse’s share of your real estate decreases to one third. Your spouse will receive the first $60,000 of your personal property, plus one third of the rest. The remainder of your property will be divided between your children. You leave behind no identifiable living relatives. Though it’s incredibly rare, it’s possible for you not to leave behind any living relatives after you die. In such a situation, the state of North Carolina becomes your final heir. This means that the state would inherit all of your property if there is no one else.
NON-PROBATE PROPERTY Probate is the set of laws that applies to the property left behind by a deceased person. Every state has specific courts that deal with these kinds of cases. In North Carolina, the Clerk of the Superior Court hears probate cases. Should you die leaving behind intestate property, someone will have to open a new case with the Clerk of the Superior Court. It’s important to understand that not all the property you own will be distributed through intestate succession should you die without a last will and testament.
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Some property, known as non-probate property, will be distributed to others after your death through other means. For example, should you leave behind a life insurance policy that names your spouse as a beneficiary, your spouse will automatically receive the life insurance payment regardless of who else survived you. Of course, this entire process can all be rather complicated. To better understand intestacy, probate, and what you can do about it, you need to talk to an attorney who specializes in estate planning.
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ABOUT THE AUTHOR Cheryl David is a graduate of UNC-Chapel Hill, the University of Baltimore School of Law, and the prestigious Trial Lawyer’s College presided over by Gerry Spence. A former Administrative Judge, Cheryl is certified as an Estate Planning Law Specialist by the ABA accredited Estate Law Specialists Board, Inc. She is also a member of the American Academy of Estate Planning Attorneys, Medicaid Practice Systems and the National Academy of Elder Law Attorneys. In 2008, Cheryl received the honor of becoming a Fellow with the American Academy of Estate Planning Attorneys. The Fellow program recognizes Academy Members who demonstrate advanced expertise and significant practical experience in the total estate planning, trust, tax planning, guardianship, probate and estate administration fields. In order to maintain this advanced expertise, Cheryl takes over 36 hours of continuing education in Estate Planning, Elder Law, and Taxation each year. Also a Financial Planner, she holds the Series 7 and 66 Investment Licenses in addition to both Insurance and Long Term Care/Medicare designations. Her professional capabilities, together with over 25 years in practice, have combined to bring positive change to the lives of over 4500 clients and their families. 528 College Road Greensboro, NC 27410 Phone: (336) 547-9999 Fax: (336) 547-9477 WWW.CHERYLDAVID.COM
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