The loss of a spouse is one of the most difficult times in a person’s life. You’ve worked hard to build a life together and you want nothing more than to know your spouse is taken care of after your gone. Having an estate plan in place, including a will or a trust, and working with an estate planning attorney in Raleigh NC will help ensure this.
However, life is filled with twists and turns and critical illness or other catastrophic events can cause an enormous amount of debt. Under North Carolina law the surviving spouse has certain rights that are designed to protect their interest in the estate and protect them from creditors.
In North Carolina, the surviving spouse is entitled to the first $60,000 in personal property from the estate, provided that they were not separated at the time of death, and each minor child is entitled to up to $5,000 in personal property.
As we’ve discussed in previous posts it is imperative to have an updated will to ensure that the assets of your estate are handled according to your wishes, but even having a will cannot protect your estate from creditors.
Before distributions can be made to the heirs or beneficiaries all known creditors or those filing a claim against the estate must be paid to the extent the assets will allow; for example, John Doe died leaving behind his wife, Jane Doe.
The assets of John’s estate are valued at $75,000, however, at the time of his passing, he also had medical bills and other debts totaling $150,000. This is where the Assignment of Year’s Allowance comes into play. Personal property, including bank accounts, household furnishings, and vehicles, totaling $60,000 are assigned to Jane leaving $15,000 to be used to pay the outstanding debts. Jane can rest easier knowing $60,000 of John’s personal property is protected.
However, there is one catch. To learn more about this possible issue, be sure to stay tuned for our next blog post.
If you don’t have an estate plan in place or haven’t reviewed yours in several years, now might be the best time to start. Our estate planning attorney in Raleigh NC is here to help you get your estate planning started and in order. That way, should you pass in an untimely manner or become incapacitated at some point it will be there for your loved ones. It’s better to be safe than sorry when it comes to an estate plan. Contact our office today to get started estate planning.
As always, feel free to contact us with any questions or concerns you may have concerning legal issues. Contact our estate planning attorney in Raleigh NC to schedule a consultation if you have questions about small business needs, trademarking, copyrighting, or other legal situations. Call today for more information.