Estates and Guardianships: FAQ
Why do I need a Will?
Even if you believe you do not "have enough" for a Will, you have enough for a Will.
The State of North Carolina will decide who receives your property if you die without a Will, and this may affect you in several ways.
If you are a single parent and own a home, or if you are married and your home is titled only in your name, your home will be owned at
least partially by your children when you die. However, since minors cannot manage property on their own, a guardian for your minor
children must be appointed to manage their property, including insurance proceeds, retirement assets, and other property that passes
to your children upon your death. Guardianship of a minor requires court supervision, a formal annual accounting to the court, and
an annual bond. If the guardian needs to take certain action, such as refinancing the home, a lawyer must be retained to file the
necessary petition for approval by the court. The attorneys' fees, bond premiums, guardian's commissions, and other costs of
administration will be paid out of the minor's funds, costing thousands of dollars. When your children reach the age of 18, all of
the assets will become theirs, generally at a time when they are too inexperienced or immature to handle this amount of money responsibly.
The reality is that the costs associated with a guardianship are significant and the procedures frequently are inflexible. A Will can
establish a trust to provide management of these assets to continue to provide for the care and support of your children until they are
at an age when they can handle this responsibility. Additionally, a professionally drafted Will typically makes estate administration
easier and less expensive.
Similarly, non-traditional families are adversely affected by state inheritance laws. Non-married couples are strangers to each other's
estate and will receive nothing under state law.
Sometimes, a person may want to provide for a sibling or other relative, or may decide that a particular relative should not receive
anything. Obviously, state law will frequently fail these objectives. State law is the default, one-size-fits-all distribution scheme
that occurs when you fail to direct legally how you want your assets to pass, how you want to provide for your minor children, and how
much authority and flexibility you want the person handling your estate to have at his or her disposal.
Having a Will can save your family or loved ones a great deal of financial instability and emotional trauma: you will be able to provide
for those specific people you choose. For higher net worth individuals who will have taxable estates, a Will could save your family
hundreds of thousands of dollars in taxes alone.
In addition to a Will, which only is effective upon death, you will need Powers of Attorney, and if you choose, a Living Will. These documents
will generally be effective during a period of incapacity, when you need the greatest flexibility and protection available.
When you come to our office for estate planning, we will not just provide you with a carefully crafted Will; we will assess your unique situation
globally and provide you with professionally drafted legal documents in addition to a Will.
Can't I write my own Will or use a computer program for this purpose?
The old adage that you get what you pay for certainly applies to this situation. It is possible, but highly inadvisable, to have your own handwritten
Will in North Carolina. It is also possible to use a computer program to help you with a Will. North Carolina law is very strict in its
requirements for what document qualifies as a Will, and therefore the document you do on your own may not meet these requirements. In other
words, the directions and wishes you expressed in that document will not, in that case, have any meaning or receive any consideration under
the law. Under the law, you will considered to have died without a Will.
A professionally drafted Will has the benefit of experience and clarity. Having a professionally drawn Will generally makes estate administration
easier and less expensive, and will avoid litigation. If your Will is unclear or ambiguous, you have just given your loved ones the Gift of
Litigation. The beneficiaries of your estate will not be your loved ones; instead, the beneficiaries of your estate will be the attorneys hired
to fight these issues in court.
What is a Power of Attorney and why do I need one?
A Power of Attorney is a legal document that grants authority to another person, an agent, to conduct business or make health care decisions on your
behalf without a court order; in other words, this document authorizes substitute decision-making. Powers of Attorney may be immediately effective,
or instead, become effective only upon, and only effective during, a period of incompetence or incapacity. In estate planning, a Power of Attorney
will typically be drafted to survive your incapacity or incompetence, which generally avoids the burdensome, inflexible, expensive, and public
incompetency and guardianship procedures.
If you do not have a Power of Attorney, a court will generally have to appoint a guardian to make health care and financial decisions for you during
a period of incapacity or incompetence.
Powers of Attorney are broad and very powerful documents, and they are frequently used as a means of financial exploitation. According to the United
States Senate Special Committee on Aging, that up to one in four Americans will be a victim of elder abuse, and that, currently, up to 5
million
seniors in the United States are victims of financial exploitation, physical abuse or neglect
each year; even so, this figure could be the tip of
the iceberg since it is estimated that 84% of elder abuse goes completely unreported.
1 Further, according to the 2000 report of the National Association
of Adult Protective Services Administrators, 62% of perpetrators of elder abuse is committed by a member of the victim's family.
2
The number of people who are at least 65 years old is expected to comprise more than 20%
of the population in the United States by 2030. The problem of elder abuse, of course, is expected to grow.
The North Carolina General Statutes provide inadequate protection in several areas and fail to grant authority to take certain actions. Our Powers of
Attorney go far beyond the "cookie cutter" forms that many general practitioners use; instead, we have incorporated a great deal of experience gained
in contested guardianship proceedings to provide the maximum flexibility and protection. Our goal is to create a custom-crafted document that will
provide clear guidance years in the future, to avoid expensive and public court hearings, and to keep your chosen agent as your advocate rather than
an adversary. Our goal is to protect
you.
What is a Living Will?
In North Carolina and in most other states, before extraordinary means (such as life support) or artificial nutrition or hydration may be removed, a
person's desire that his or her life should not be prolonged artificially must be proven by clear and convincing evidence, a high burden of proof.
Medical doctors have an ethical responsibility to preserve life, even if the
quality of that life is poor.
A competent person has a constitutionally protected interest to refuse medical treatment, including lifesaving hydration, nutrition, and respiration.
This does not mean, however, that an incompetent or incapacitated person possesses this same right, since such a person is unable to make an informed
and voluntary choice to exercise that right. An individual's right to refuse lifesaving measures will be balanced against relevant state interests:
to protect and preserve human life; to establish a procedural safeguard to ensure that a surrogate's action conforms as best it may to the wishes
expressed by the patient while competent; to safeguard the personal element of an individual's choice between life and death; and to guard against
potential abuses by surrogates who may not act to protect the patient.
When a legal document is not executed that sets forth a desire for a natural death, disagreement between a spouse and other family members, both of
whom believe they are acting in your best interests, may occur. Consider the recent case of Terri Schiavo in Florida, who was kept alive for 15 years
since she collapsed in her home in 1990, causing irreversible brain damage. Terri's husband testified that she told him she did not want to be kept
alive if she was in such a condition. Terri's parents claimed that their son-in-law had a conflict of interest since he was at that time living with
another woman, with whom he fathered two children. Terri's parents also claimed she was raised Catholic, and would never commit "suicide." These
legal documents are NOT suicide, and in effect allow you to die a natural death. A Living Will or Health Care Power of Attorney that met state requirements
would have prevented this dispute.
A Living Will, formally referred to as a "Declaration of a Desire for a Natural Death," is a statutory form which allows a physician not to use
extraordinary means or artificial nutrition or hydration if your condition is determined to be terminal and incurable or you are diagnosed as being
in a persistent vegetative state. Many people incorrectly believe that refusing forced hydration or nutrition makes a person suffer as if dying of
thirst or starving to death. However, a "persistent vegetative state" is a condition in which a person exhibits motor reflexes but evinces no
indications of significant cognitive function. The attending physician plus a second physician must confirm this condition. You, or another person
authorized to act on your behalf, may revoke a Living Will using any method of communication to the attending physician, without regard to your mental
or physical condition. Legally and ethically, a Living Will is not considered suicide. Essentially, this document allows you to die a natural death
without being tied to tubes indefinitely and kept technically "alive," without the ability to recognize your surroundings, enjoy the company of your
family, or participate meaningfully in any real life functions. Those who act under the authority of a Living Will are protected from civil or criminal
liability.
End of life decisions are difficult for everyone involved, but are made exponentially worse when family members do not know what you want under those
circumstances. We encourage our clients to discuss these issues with their family members, to execute the appropriate legal documents that carry out
their wishes, to record them in a confidential and secure online registry, and to give a copy to their agent, their medical doctor, and to their close
family members.
How is a Living Will different from a Health Care Power of Attorney?
A Health Care Power of Attorney authorizes an agent to make health care and mental health decisions while a Living Will sets out your wishes that your life not be
artificially prolonged in the event of a coma, terminally and incurably ill, or in a persistent vegetative state.
These two documents may be combined, and if they are, the health care agent has the authority to decide if and when to withdraw or refuse extraordinary
measures. Having a separate Living Will could, however, take precedence over a Health Care Power of Attorney and allow the physician to make this
decision, rather than the health care agent. As a practical matter, however, having a separate Living Will has the effect of
your making the decision
not to prolong your life under these circumstances as opposed to passing this decision off to the health care agent. Therefore, having a separate
Living Will may ease the distress of the agent from making this difficult decision alone, and it can assure other family members, with whom you may not
have discussed your wishes in advance, that you do, in fact, wish to die a natural death. Doctors would rather have the family on board to avoid potential
litigation, and a separate Living Will may assist the doctors when there is disagreement among family members, some of whom may not be ready let go.
Note that this is a decision based on your comfort level. If you do
not execute a separate Living Will, the attending physician may only discontinue
extraordinary measures and artificial nutrition or hydration with the
concurrence of (1) your health care agent, or (2) a court-appointed guardian of
the person, or (3) your spouse, or (4) a majority of your relatives in the first degree,
in that order.
One of the questions that often comes up about advance directives is, "Well, you know, people write these things down, but that's not what families actually do, and
then physicians always follow the family."
The fact is, just having the intellectual clarification of values does not necessarily lead to the kind of decision making that will actually be
applied. The documents
are, of course, of great importance. Yet no document, however brilliantly drafted, will solve every problem.
The lesson here is to
discuss these issues with your family. When families are anguishing over this decision, they ask themselves,
"How can I be a good caregiver and yet make this decision?" Ask your family members how they would want to be treated if they suffered a massive brain
injury, and what they would want their agent to do for them. We must focus on relationships and specific wishes rather than on abstract values.
The most important factors here are (1) discuss your wishes with your family and especially your health care agent and successor health care agent; (2)
make sure you are confident in your health care agent's ability to make the right decision under the circumstances sometimes your loved ones will have
moral and/or religious issues with some end of life decisions, which is something you will not know without discussing this issue with them; (3) take the
time to consider end of life decisions now rather than leaving these to your family to decide for you; and (4) provide a copy of these documents to your
doctor and your chosen agents.
We will be pleased to point you to several excellent resources on end of life decisions. As your attorney and advocate, we will help you become
confident in the decisions you make based on facts, not myths. Some helpful resources are located
here.
What is a Guardian and how is one appointed?
Guardianship is another means of substitute decision-making during a period of a person's incompetence or incapacity; generally, these proceedings
are initiated in the absence of Powers of Attorney. Adults are presumed competent to make decisions, however unwise they may be, and have the freedom
to make bad decisions even if criminal consequences may result. However, a person may be rendered unable to make informed, voluntary decisions because
of illness, injury, or incapacity. Guardianship is a means of protecting such an individual, even if less preferable than a well-drafted Power of
Attorney.
Any person may file an incompetency and guardianship proceeding whether or not the principal has executed a Power of Attorney. As a practical matter,
however, the majority of incompetency and guardianship proceedings are filed because a person has not executed valid Powers of Attorney.
An adult must be adjudged incompetent by the Clerk of Superior Court, based on admissible evidence that meets the "clear, cogent, and convincing"
burden of proof. An attorney is appointed to represent the best interests of the alleged incompetent person. In the event the alleged incompetent
person denies that he or she needs a guardian appointed, a formal trial will be held by the Clerk of Superior Court on this issue. The alleged
incompetent person may request a jury trial. Obviously, this adversarial proceeding may cause a great deal of stress and expense to the alleged
incompetent person and his or her family.
In the event a person is determined to be incompetent, at least one guardian will be appointed. A guardian must act under court supervision,
and if he or he she has authority over assets, will have to file annual accountings and maintain an annual bond. Court approval for certain
actions is required, and in this case, an attorney must generally be retained.
Guardianship generally supersedes a Power of Attorney, although a Power of Attorney may nominate the agent to be appointed guardian.
The court must go along with this nomination unless "good cause" is shown to appoint someone else.
Gil File is the former Wake County Clerk of Superior Court, and he has presided over approximately 1,000
incompetency and guardianship proceedings, including those held in hospital rooms, at Dorothea Dix Hospital, and at Central Prison. Gil's
experience in contested and unusual guardianship proceedings has given him a unique ability to help prevent our clients from going through
similar circumstances.
While a guardianship proceeding may "trump" a Power of Attorney, Gil has spent a great deal of time crafting Powers of Attorney that may avoid
inflexible guardianship procedures in the interests of justice.
Whether you need estate planning services to avoid a guardianship or need representation during a guardianship, our office is prepared to give
you the highest quality service, analysis or representation.
What is a living trust?
A living trust is a revocable legal document that transfers assets into a trust which will direct how those assets will be managed. A living trust
is effective as soon as it is executed and funded with assets; a Will, however, is effective only upon death.
Living trusts are often advertised as avoiding probate and providing privacy. In some, but not all, circumstances, this statement will justify
the cost of drafting a living trust. In North Carolina, probate fees are set at a maximum of $6,000.00; living trusts, however, can exceed this amount.
A living trust is only as effective as the assets transferred into it, and deeds or other documents of transfer must be executed. It is entirely
possible that probate will still be necessary anyway, to cover after-acquired property or other assets that are not owned by the trust. This being
said, a living trust can avoid probate in other jurisdictions, which may occur when a person owns property in another state. Even though you transfer
assets into the trust, you will still direct how those assets are controlled.
What is probate?
GGenerally, probate is the process by which the court determines whether a person died with or without a Will and effects the distribution of assets
after death. Probate does not cover all property: pay-on-death contracts such as life insurance, retirement accounts, and property owned jointly
with a right of survivorship are generally referred to as "non-probate property." Non-probate property passes automatically upon operation of law
or by contract to a named beneficiary.
Following a person's death, the estate administration process will require that creditors receive notice of the person's death, that creditors have
a short time period to file claims, and that probate property (and in some cases, certain non-probate property) be used to pay lawful debts.
The property remaining after debts, expenses, and costs of administration are paid will go to heirs at law or, in the case of a Will, to the
decedent's chosen beneficiaries.
Probate fees are currently set at a statutory maximum of $6,000.00.
1 Shattering the Silence: Confronting the Perils of Family Elder Abuse, Hearing before the Special
Committee on Aging, United States Senate, 108th Congress, Serial No. 108-25,
http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=108_senate_hearings&docid=f:91381.wais.
2 Id.