The Top Two Ways the Court Gets Involved in Your Estate and How to Avoid Them

By Cory Howes

I haven’t met a client yet who wants any court involved in their lives. But without careful and proactive estate planning, chances are that some aspect of your estate will end up being decided there.

Take a look at two of the most common ways court proceedings can make their way into the management and distribution of your assets upon your death or incapacity, along with the estate planning measures we take to avoid them.

Guardianship and Conservatorship

If you experience an inability to make decisions on your own behalf, also known as legal incapacity, and you don’t have provisions for what to do in this situation clearly outlined in your estate plan, it falls upon the court, through a guardianship proceeding, to decide who will become responsible for handling your finances, lifestyle, and medical care. You can become legally incapacitated because of an accident, injury, or degenerative illness. In the case of guardianship (sometimes called “living probate”), your estate’s details, as well as discussion about your medical conditions, may be made public and be the topic of court proceedings.

To ensure that the government doesn’t get involved in your wealth management and health care during your lifetime, you need to determine who will be your powers of attorney. For situations of incapacity, you can appoint durable and medical powers of attorney for various categories of management in your life and estate. A solid long-term care plan, living will, HIPAA authorization, and fully-funded revocable trust are other components to consider in avoiding living probate proceedings.

The Probate Process

Probate is the name for the court proceeding that takes place after your death to prove that your will is valid, to ensure your final bills, debts and creditors are paid, and to ensure the terms of your will are carried out accurately and legally. While the North Carolina probate process is relatively straight-forward and less costly than many other states, many clients prefer to avoid probate in order to maintain their privacy, avoid unnecessary costs and fees, and provide for the most efficient manner of estate administration possible.

Having a will does not allow you to avoid probate, since all wills must go through probate to be validated. Although you’ll often hear about joint tenancy, beneficiary designations, and other probate avoidance options as alternatives to wills, only a fully-funded revocable trust can consolidate the management and preservation of all types of assets both during your life and after your death. These other tools are useful and appropriate in certain situations, but many times they will not appropriately plan for contingencies and can result in unintended consequences. Thus, for many people, the best way to avoid probate is to work with your estate planning attorney to establish and fully fund a revocable living trust and name your beneficiaries and trustees ahead of time.

Just the thought of estate planning can be daunting to consider when you’re busy living your life. At the Forrest Firm, we work diligently to present you with the best estate planning tools and strategies in a straightforward manner, letting you get back to focusing on what’s most important to you. Please contact me to discuss what strategies will work best to keep your assets in your family and the court out of your affairs