I find that some of my clients feel it is important to share the details of their estate plan with loved ones; however, others prefer to keep those details private. Even those clients who decide to share the details with loved ones may not want those details to be available to people outside of their immediate family. The good news is that with careful estate planning, you can keep the details of your North Carolina estate plan private.
When it comes to privacy, there are two major considerations. One is what legal documents and tools you use to organize and create your estate plan. This is the consideration which has the biggest impact on preserving your privacy and that of your family after you death. The other consideration is how and to what extent you choose to share information with people while you are alive.
As to this latter point, it can be very important in some cases to share your wishes and intent with some immediate family members or others who will be serving is a fiduciary role in the management of your affairs in the event of incapacity or at death. This does not mean that you have to share all of the details of your plan, or even that you need to share the plan documents. At Clarity Legal Group we have a written agreement with out clients outlining the circumstances under which our clients what us to share documents with the trusted fiduciaries. This can help preserve privacy while ensuring that the planning works as intended.
Your Last Will and Testament
A Last Will and Testament is a legal document that communicates your final wishes pertaining to some of your possessions. Your Will allows you to make both specific and general gifts. For example, you might make specific gifts of your house along with $50,000 in cash to a designated beneficiary. You could also gift a percentage of your estate to a beneficiary. For example, you could gift half of your entire estate to your daughter. Your Will is also where you will appoint someone to be the Executor of your estate. Your Executor plays a vital role in the probate of your estate after your death. Finally, a Will provides you with the only official opportunity you will have to nominate a Guardian for your minor children in the event one is ever needed after you are gone.
Following your death, the assets which are controlled by your will are subject to going through the legal process referred to as “probate.” This is a court process to ensure the proper administration of the estate, payment of creditors, and distribution of the assets controlled by the Will. As part of the probate, the Will and all of the assets controlled by the Will become part of a public record which is available to anyone upon request. For this reason, one of the major drawbacks to using a Last Will and Testament as the primary document under an estate plan is the lack of privacy (of course coupled with the increased cost of dealing with the probate). If you would prefer to keep the details of the gifts you made private, you might wish to consider using a revocable living trust as your primary tool for distributing your estate.
Using a Trust to Keep Your Estate Plan Details Private
During the probate of your estate, the individual you appointed to be the Executor of your estate must identify and categorize all of your estate assets. Assets are either probate or non-probate assets because not all assets are required to go through the probate process. Among the assets that are non-probate assets, and therefore bypass the probate of your estate, are assets held by a trust. Because trust assets are non-probate assets, the trust agreement you create is not required to be submitted to the court. Consequently, the terms of that agreement, including the details regarding the value of your assets, the description of your assets, and who inherits the assets, remain private.
Choosing to use a trust to distribute your estate assets, however, does not mean you no longer need a Will. At a bare minimum you should retain a Will to ensure that any assets inadvertently left out of the trust make it into the trust at the time of your death and also to identify an Executor to deal with any legal issues which might arise as a result of or after your death.
Contact a North Carolina Estate Planning Attorney
If you have additional questions or concerns about keeping your estate plan details private, or if you are ready to get started on your estate plan, consult with a Durham and Chapel Hill area estate planning attorney at Clarity Legal Group® by calling us at 919-484-0012 or contact us online.