Greg McIntyre: Hi, this is Greg McIntyre with another elder law report and today we have a cool topic, the Estate of Confusion and I wanted to talk about this I’ve just realized and with clients even recently. That they don’t know exactly what an estate is or a lot of people are confused by what is an estate. And the reason I say that versus as an estate planning, and elder attorney. As far as how we view in an estate brenton, what is an estate? What is your estate?
Brenton Begley: And my estate is this, a house on rolling hills in the English countryside now.
Greg McIntyre: Oh. Is that what it is?
Brenton Begley: The state is what you own. It’s what you got, you know, it’s funny too.
Brenton Begley: Because like I asked people what they own, That’s one of the first questions, you know, “Hey what are your assets”, and you can phrase that as “what is your estate”, but a lot of people don’t, they do not know what that means. So ask what their assets are. And sometimes they’ll tell me, Oh, you know, I have this home, but it’s owned by the bank, you know, that that always makes me shuffle because banks, don’t own your home, they got a lean against the home, they don’t know, you know.
Greg McIntyre: Right.
Brenton Begley: And so it’s everything you own. It’s everything that you have a legal, right to, and
interest too, whether it’s your, you know, real property, you’re tangible, personal property or, you know,
financial assets.
Greg McIntyre: Exactly. So when you die, you’re estate is and I try to be really specific about this. Is
my state, my probate estate at that point.
Brenton Begley: No, your, your probate estate is your probate estate. So, your state is still everything you
owned at your death. Everything you own. That’s payable, anything that’s payable to you, anything, you
had an interest in any contracts that are due to you any, you know, payments that are due rents needs of
trust. Anything you own real personal finances when you die now. Here’s the thing, that that’s the whole estate, okay? The total assets of the estate, then you have you know, from that big pot that we call the estate. There are some assets that are gonna pass outside of probate and there may be some
assets that have to go through the probate estate. So it could splinter into the probate estate and non-probate estate assets. Okay, but it all comes from the same estate. Okay. The same set of assets that you
had or have ownership in whenever you pass away. So, you know, it makes sense when you think
about it in terms of specific assets, if I have life insurance, or maybe have a bank account with a
beneficiary on it.
Brenton Begley: You know that is part of my estate still part of my estate when I die but if it has a
beneficiary on it it’s not gonna go through probate so it’s not part of the probate estate so that’s going to
split off and go under that beneficiary, okay? If I have let’s say I have some real property in my name and I
haven’t done any type of deed to give right a survivorship have a name beneficiary on it, haven’t put it in a trust where it has been a fishery. That’s gonna go through my probate state and be controlled by my will, if I have a will, if I don’t have a will by the the state. Okay, so that’s how it works. You have the main
estate that could splinter off into probate non-probate. Our goal typically is to make sure everything
passes that side of probate. So you won’t have any probate statement if you pass away and that, you
know, for for many many reasons.
Greg McIntyre: so, my probate estate, That’s what goes say through my will which has to go through the
probate process. To change title to assets that otherwise don’t have a mechanism to change that title.
Brenton Begley: Right.
Greg McIntyre: So my non probate estate could be life. Insurance policies IRAs that have specific
beneficiaries. Or what about a trust?
Brenton Begley: Yeah. You trust State?
Greg McIntyre: Would that be my trust estate outside of my probate estate?
Brenton Begley: Yeah, I mean it’s another word for anything you have in a trust. Before you pass away.
Brenton Begley: If it ain’t in the trust, it’s not part you trust the state.
Greg McIntyre: Unless the trust is a beneficiary. Right of a life insurance policy. For example.
Brenton Begley: yeah, and that’s a good point because we set those up all the time and I would say It’s
kind of like, Schrodner’s trust, right? At the time that you die, you know, while you’re alive. It’s not in the
trust. And at the time you die it’s instantly into the into the trust, at that point. So there’s a point in time
where it’s not a trust asset and at the same time is the trust asset. But the point of the point of matter is,
is that they can still become a trust asset, even if it’s a an asset that you have, that’s part of your full
estate. So basically, it’s an estate asset. That does not go through probate but goes into the trust and
becomes part of the trust estate.
Greg McIntyre: You know, how do I know? Now that I have an understanding of what my estate is, it’s
everything I own during my life, that’s my estate. Now, Death. It could be partly probate. Probate Estate,
Partly a trust estate partly a non-probate non-trust state, right? The things that are flowing outside of
those tools.
Greg McIntyre: how to set up my state? So that I can manage it properly during my life and at my death.
What’s the best way to do it?
Brenton Begley: Yeah, you know, the best way to do it is to first of all you got to know what you have. And
so it’s a you take the approach based on the assets that you have. There’s certain critical point where if
you have a certain number of assets, it’s gonna be useful to have a trust and we’ve laid out where, you
know, there’s four conditions where it might be very useful to have a trust for people past videos past
articles, things like that. But the idea is that anything that you have generally speaking, you want to try to
set it up to avoid probate. So that first requires you to look at what you have. A lot of people have the
house. A lot of people have bank accounts, a lot of people have retirement accounts. Those main assets
can all be set up to avoid probate, whether you go directly to that account, or to that asset, like a house
and set that up, individually to avoid probate and go to an individual, like a lady bird deed on a house
naming a beneficiary, on an account.
Brenton Begley: Or if it’s proper for you and you have the requisite type of assets, number of assets and
need for it. You could put it all in a trust and it’s kind of a shotgun approach if you know, having everything into one pot and anything in that pot can avoid probate. If you pass away. So, How you know whether or not something’s gonna avoid probate is essentially whether or not it’s already been pre-arranged to avoid probate. Whether it’s in a trust whether it has a named beneficiary or a joint owner with right of survivorship
Greg McIntyre: So, do I also want to be aware of how I set up my estate and can the way I set up my
state?
Greg McIntyre: Whether I lose assets or keep assets and are eligible for long-term care benefits as I age
to pay for assisted living, nursing home care if I need it.
Brenton Begley: yeah, so the thing about your estate, whether it’s before you die or after you die, it’s you
know, There’s risk to that.
Brenton Begley: And to know what how to protect it. You have to know what the risk is. It’s really two-
fold, you know, the need for long-term care and probate. First of all, the need it and you see we look at this as an estate planning elder law. Attorney kind of like an algebraic way, right? You guys all both sides of the equation. So you have this possible need for long-term care. I mean, my God, 70% Individuals will need long-term care at some point in their lives. It being tens of thousands of dollars a month. You got a plan for that sort of thing. So you want to make sure you’re a state is protected during your life by planning to make sure that those assets or situated where they’re protected and that you they’re not gonna disqualify you from receiving some type of benefit to pay for long-term care. Then the other side of the equation is that if you allow those assets that you are able to keep that state to go through probate, that’s the opportunity and in North Carolina, the only opportunity for creditors to come after those assets. So medical creditors, Medicaid, the nursing home
Brenton Begley: So you really want to avoid probate for that reason and probate again. It’s
it it’s something that’s not prearranged. So someone has to figure out what the stuff is and who it goes to. That’s someone is the court. The court asserts jurisdiction over those assets and decides how they pass and one of the rules that the court has, and the probate process is, We’re going to pay creditors before we pay anybody else. So it’s a surefire way to make sure that your creditors get paid in your, in your kids. Your loved ones, get less than what they could get if you would plan to protect the the estate, you know, during your life.
Greg McIntyre: Absolutely. Well Brenton, thank you for being on this elder law or exploring the topic. The
estate of confusion. I hope this Has helped clear up some of that confusion if you would like for us to
help. Take Your estate of confusion and…
Greg McIntyre: turn that into an estate of clarity, then give us a call at McIntyre elder Law, it’s one eight,
eight, nine, nine nine sixty six hundred or Check out all our content and you can book a free console online at mcelderlal.com.
Greg McIntyre
Estate Planning & Elder Law Attorney
