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What is a “Year’s Allowance”?

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One of the really helpful estate administration forms that folks may not know about is what’s called a “Year’s Allowance”.

The “Year’s Allowance” form is something we use a lot when it comes to dealing with the estate of a spouse who has died and left a widow or widower.  In situations where the couple had most of their assets set up jointly or had named each other as beneficiary, there often is very little that needs to be transferred from the deceased spouse to the surviving spouse.  Most often, it’s things like vehicles or small checks made payable to the deceased spouse as reimbursement for insurance premiums.

The Year’s Allowance allows for the assignment of up to $30,000.00 in personal property (vehicles, money, etc.) from the deceased spouse to their surviving spouse, without having to go through probate.  To the extent that the value of the property in the name of the deceased spouse is $30,000.00 or less, it can be transferred to the surviving spouse by simply completing one form and having it certified by the Clerk of Court in your county.

An example: Joan dies in 2014, leaving her husband, Bill.  Joan had an IRA, of which Bill was the named beneficiary.  Joan and Bill had a checking and savings account, of which they were joint owners.  Joan had a 2010 Honda Accord (worth $12,000.00) that she owned solely.  Their home was owned as tenants by the entirety.

When Joan died, Bill was left wondering what would need to be done from a probate standpoint to transfer Joan’s assets to him.  Fortunately for Bill, out of all the things listed above, he only needs to worry about the 2010 Accord.  The IRA has Bill listed as beneficiary, meaning he need only file a death claim with the company managing the IRA.  The jointly-owned checking and savings accounts can be closed by Bill and reopened in his name alone without any legal authority.  Joan’s interest in the home automatically transferred to Bill upon Joan’s death because they owned it as tenants by the entirety.  The only thing that Bill can’t transfer without legal authority is the car.

Bill would simply fill out the Year’s Allowance form, sign it and have his signature notarized, and take it, along with Joan’s death certificate and her original will (if she had one) to the Clerk of Court.  (There is a fee associated with the Year’s Allowance — currently it is $8.00 — so Bill needs cash as well).  Once there, the Clerk will review the documentation, and assuming everything is complete, he or she will sign it, place a raised seal on it, and hand it back to Bill.

From there, Bill would take the certified Year’s Allowance, along with the title to the Accord, to the DMV, present both, and ask that title be transferred to him.

What this means is that Bill has completed the administration of his Wife’s estate with one form.

Behold, the magic of the Year’s Allowance!

Jamie Ratledge and Kristine Prati To Present Case Law Update

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Wilson Ratledge is pleased to announce that on Wednesday, March 29, 2017, Jamie Ratledge and Kristine Prati will be presenting the Case Law Update at the North Carolina Association of Self-Insurers Conference in Wilmington, North Carolina. Every year, the attorneys of Wilson Ratledge participate in the Self-Insurers Conference, and have always found the discussions to be very enlightening and beneficial to the unique defenses for self-insured employers. More information about the conference can be found at http://ncselfinsurers.com/index.html.

Does a Will have to be Recorded?

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I’m trying to dedicate a decent amount of this blog to common questions that our Clients have when they meet with us, since they are likely questions many folks have.  One of those questions relates to “recording the will” and often comes in one of these forms:

“Are you going to record the will?”

“Mom [who is alive] has a will, but it was recorded by the lawyer that did it.”

“Do I have to record the will with the Register of Deeds?”

A will does not have to be “recorded” to be valid while a person is living.  The only time a will needs to be “recorded” is following the death of the person that created the will, at which point the Will may need to be filed with the Clerk to start the probate process.  Until that time, however, provided that the will was properly executed and witnessed, the original will simply needs to be kept in a safe place.

Folks that talk about wills being recorded aren’t incorrect, however.  The Clerk of Superior Court in each county has a depository for original wills.  For a small fee, any person may take their original will to the Clerk, and ask that it be deposited with the Clerk for safekeeping.  If this has been done, the Clerk will give the person depositing a will a receipt in exchange for the will.  That receipt will outline whose will has been deposited, the date on which it was deposited, and the County where it was deposited.  Under the statute, once the will has been deposited, the only people that may access it while the person who created the will (the “Testator”) is living are the Testator, their duly-authorized agent, or their attorney.  This isn’t technically “recording” the Will, but it is deposited somewhere

Some attorneys may do this as a matter of course.  Clients are always free to do this as well.  I normally advise clients that it is available, but is not required.  So, to answer the question, “does a will have to be recorded”, the answer is “it depends.”

Celebrity Estate Planning

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Articles detailing the “failings” of celebrity estate plans are some of the more common “click-baitish” news items you’ll see related to estate planning.  The one I saw today related to Lou Reed, his 34-page will, and the fact that he should have done a revocable trust.  The article can be found here.

I bring this up for a few reasons:

  1. (shamless plug) I welcome all celebrities that would like me to handle their estate planning. (/shameless plug)
  2. Revocable trusts are amazing and affordable estate planning tools.  Admittedly, any revocable trust drafted for the estate of someone like Lou Reed wouldn’t be run of the mill, and would likely have made his 34-page will look like a blog post, but the importance of one can’t really be overstated.  If you have an estate that you’d like to keep private, or have real property in multiple states, or would like to provide for family members (like Mr. Reed wanted to provide for his elderly mother), a revocable trust can make the administration of your estate much easier.  BUT:
  3. Just because someone does a will instead of a trust doesn’t mean their estate plan is bad, or incomplete.  It is quite possible that Mr. Reed sat down with his estate planning attorney, and the attorney began discussing trusts, and Mr. Reed threw up his hands and said “I’m not interested in trusts — I just want to do a will.”  To which the attorney most likely protested, but at the end of the day, it’s the client’s decision.  And if Lou Reed only wanted a will, that’s the end of it.  It’s much better than doing nothing at all and leaving it to the laws of the State of New York.  His wishes were met through the will.  Was it the cleanest or best method?  Not in my opinion.  But just because you don’t do a trust doesn’t mean your estate planning was awful.  The key is having a plan, and that’s something we can help with.

Could competency litigation affect you?

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With the increase in lifespan and general health, we are also seeing an increase in the amount of competency lawsuits filed by nervous heirs. Generally, if a challenge arises to wills or trusts, it happens after the death of a person. However, as lifespans trend upwards, family members and others are looking to lock in their inheritances prior to death.

Recently, this has started to play out in the case of Sumner Redstone, the 92 year old controlling shareholder of Viacom and CBS. After he removed his longtime companion, Manuela Herzer, as his healthcare agent and kicked her out of his mansion, she sued to challenge his competency and the two are currently in settlement talks.

Dementia is the underlying driver in many of the cases, with over 5.3 million Americans over 65 living with the disease. That number is expected to rise in upcoming years, according to the Alzheimer’s Association.

Assessing someone’s competency in court is still a very inexact science, as there are a number of complex laws and inconsistent standards that courts are forced to wrangle with. While no uniform test exists, courts have used such tests as asking patients to count backwards from 100 by sevens, draw a clock showing a certain time, and name as many words as possible starting with a certain letter in the past.

Planning ahead and having good representation in the formation and defense of your estate and trust matters is a big first step in making sure you and your legacy are protected. If we can help, call our office today at 919-787-7711 or fill out the form on the side of this page to speak with one of our attorneys.

Kristine L. Prati Defends Appeal To Full Commission

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Kristine L. Prati successfully defended an appeal brought by the employee to the Full Commission requesting reinstatement of indemnity benefits. In the Opinion and Award filed on August 15, 2016, the Full Commission agreed with the prior ruling of the Deputy Commissioner and refused to award ongoing temporary total disability benefits as the employee failed to prove that he was disabled.