“Do I need a will?” You’re probably reading this because you want the answer to that question. You may have a lot of other questions, but it all starts with why you need an estate plan in the first place. You may have been thinking in terms of “What happens if I die without a will?” These are really just two ways of asking the same question.
To know whether or not you need an estate plan, you need to understand what happens if you don’t have one. You may be surprised to learn that the State of North Carolina has a default estate plan in place for people that don’t plan for themselves. Considering that most people still die without even a last will and testament, much less a comprehensive estate plan in place, the need for an estate planning safety net becomes apparent.
What happens if you die without an estate plan? The state’s default plan, called “intestate succession,” kicks in. “Intestate” means you don’t have a valid last will and testament. “Succession” means the process of determining who inherits your property after you are gone. Therefore, intestate succession is the state’s method of deciding who gets your stuff if you die without a will.
Who gets your property if you die without a will? At least in some circumstances, the answer will surprise you. The most unexpected aspect of North Carolina’s intestate succession law affects married couples. If you took a poll of North Carolina residents and asked, “What happens to a married person’s property if he dies without a will?” most of them would guess that the property goes to the other spouse.
But if your husband or wife dies without a will, you will probably not inherit all of his or her property. If your spouse has one living child (whether with you or someone else), grandchild, etc., you will inherit one half of the “probate estate,” plus up to $30,000 worth of personal property (non-real estate). The child would inherit the other half. If your spouse has no living descendants but does have living parents, you will inherit one half of the probate estate, plus up to $50,000 worth of personal property. If your spouse has more than one living child, your share would be $30,000 in personal property plus one third of the probate estate. One third! This comes as a shock to most married people!
It is important to understand that intestate succession only applies to the probate estate. Controlling what is and is not part of the probate estate is just as important a part of estate planning as deciding what happens to any property that is part of the probate estate. While there are several ways to keep property out of the probate estate, such as various types of joint bank accounts, beneficiary designations, and property ownership with survivorship rights, you should consult with an experienced North Carolina estate planning attorney to ensure that these tools will be effective in your circumstances.
Of course, the best way to prevent the North Carolina intestate succession statute from applying to your estate is to create your own estate plan!