Welcome back. We are here to further discuss Year's Allowance. If you're just joining us, be sure to check back to our previous blog for the first part of this blog post. Also, be sure to contact our law firm if you have any questions.
Last blog post, we left off discussing that there is a catch to consider in John's protected assets. An Assignment of Year’s Allowance can only be granted within one year from the date of death. Let’s say John dies leaving only a vehicle valued at $5,000 and titled in both his and Jane’s names. Jane believes that because her name is on the car title it automatically passes to her.
Eighteen months later Jane tries to sell the car only to find that half of its value is an asset of John’s estate. Because Jane failed to speak to her estate attorney and apply for the Year’s Allowance within one year from John’s passing, she must now go through a cumbersome and costly estate administration. This same scenario also commonly occurs with investment accounts.
John passes away leaving $40,000 in stocks in an investment account. Jane believes she is the beneficiary of the account and does not want to sell the stocks in hopes that they will increase in value. After a year the stocks have only gained $1,000 in value so Jane decides she wants to sell the stocks only to find that she must now go through the probate process which could cost thousands of dollars and drag on for months.
To complicate matters, in his will John leaves $10,000 to each of his two children. By the time Jane pays for the costs of the estate administration, pays all creditors, and makes distributions to the children, she is left with less than half of the value of the stocks if anything at all. Had she spoken to her estate attorney soon after John’s passing, this could have easily been avoided.
*As a side note, John may have named Jane as the beneficiary on his investment account, but through acquisitions and mergers with the investment company, this critical information has been lost. This happens more than most people realize, so it’s important to make sure your account information, including beneficiaries, is up to date, especially in the case of a change in your investment company or bank.
To learn more about the various aspects of estate planning, contact our estate lawyer in Raleigh NC. We can help.
Eldreth Law Firm | Estate Lawyer in Raleigh NC
Keeping your estate plan up-to-date with changes is important. Meeting with your estate lawyer in Raleigh NC quarterly, semi-annually, or at least annually might be a good idea. That way, you can ensure that all changes are updated and documented properly, in the event that you have an untimely incapacitation or death.
Remember, if you don’t have an estate plan in place, now might be the best time to start. Our estate lawyer in Raleigh NC is here to help you get your estate planning in order and ready should you pass in an untimely manner or become incapacitated at some point. It’s better to be safe than sorry when it comes to an estate plan. Contact our office.