What Happens to Property When Someone Dies
or Is Incapacitated in Cary, North Carolina?
What Happens to Property When Someone Dies or Is Incapacitated?
When the owner of property in North Carolina is sick or injured and incapacitated or when the owner dies, North Carolina law freezes all of her/his property! Frozen property means no one can handle, manage, transfer, sell, or acquire the property until legal action is taken.
The law only allows the owner (the title owner or name of the title or account) to handle, manage, transfer, sell and acquire property. Frozen property means the incapacitated or deceased person's property cannot be changed, sold, transferred, or received until some specific actions are taken.
For example, when a homeowner dies, not only can no one sell or refinance the home, but no one can turn off the utilities (power, water, cable, internet), etc until legal action is taken.
Another example, is when a car owner dies no one can sell, trade, or take ownership of the car without going through a legal process first. This legal process is called "Probate."
Similar to death, when the owner is incapacitated he or she no longer has the legal ability to manage his or her affairs. If you can't sign you can't sell, trade, transfer, charge, or receive property. An incapacitated person needs another person to have the legal authority to sign on his or her behalf. Without proper pre-planning, the law requires a Guardian of the Estate to be appointed by a judge and is given authority to sign on his or her behalf. All guardianship proceedings are a lawsuit again the incapacitated person. So, essentially, incapacity requires you to be sued so that someone can manage your affairs. How terrible!?!
There are a few ways to avoid this. First, have and keep an up-to-date Power of Attorney (POA) document that is signed and notarized given a person you trust to manage your affairs. You can also name backups to that person. For example, I have named my spouse as the first person and my brothers as her backup, just in case we're both injured severally in a common accident. Second, have and use a TRUST. Within a proper Trust, a successor Trustee has the legal authority to use Trust assets on your behalf. Now, your asset must have already been transferred to the Trust or the POA document must give the Agent the authority to fund it while incapacitated. Lastly, use joint ownership. This one is a double-edged sword. It is probably the easiest and cheapest to set up, but it comes with a lot of pitfalls. The non-incapacitated (healthy) owner will continue to have legal access to the asset, but will not have a legal duty to use it on your behalf. Maybe worse is if you die, the non-incapacitated (healthy) owner will either own half of the asset or all of it, even if you intended it to be shared among several other beneficiaries (for example, multiple children).
For answers to questions about what best option(s), please contact us today for a complimentary consultation by CLICKING HERE.