by Margaret (Mia) Lorenz, Attorney
Having helped people as a lawyer since 1993, I have persistently heard myths and legends that are fascinating! This folklore is passed along from generation to generation, and therefore runs deep. When I tell people that “it’s simply not true!” they have a hard time believing me. I see it in their skeptical (squinted) eyes and hear it in their hushed (and firm) voices as they try to figure out if I’m old enough — or wise enough — to know better.
The mythical statement that I hear the most is: “the state will take my house.” There is a rumor that the state of North Carolina owns the houses of all of the North Carolina people who get government assistance as they stay in a nursing home. The truth is that North Carolina does not want anyone’s house. They do not own the houses of Medicaid recipients. If they did, we could look at the Register of Deeds property transactions and see the state selling a lot of houses! The state does not take houses – the state demands to get reimbursed for what it paid on your behalf… after you die… and if possible.
The reality is that (1) if you received Medicaid assistance for long term nursing home care, and (2) you die, and (3) your house was owned by you when you die, then its possible that the State of North Carolina will demand that your Executor (or Administrator) sell your house to pay the State of North Carolina “back” for all that it paid for your care. So you see, the state of North Carolina wants money – not your house.
Mythical statement number two: If I die without a Will, the state gets everything I own. Again, if that were the case, the state of North Carolina would be in great financial shape (many people die without Wills).
The reality is that the state of North Carolina does not become your heir if you die without a Will. The state (through its laws) has a DEFAULT Will drafted for you! The state dictates WHO gets your stuff, but the state doesn’t GET your stuff. There is one exception, however. If you die and the state drafted Will (of yours in the law of NC) dictates that your stuff goes to your cousin three times removed from you, and nobody can find that cousin, then your estate can’t hold it forever. Your estate will escheat the money to the state of North Carolina for safe keeping until your long lost cousin surfaces.
Mythical statement number three: When I die, there is a reading of my Last Will and Testament. The television shows and movies (in search of great drama) show the attorney gathering all beneficiaries of a Will in a room, whereupon the attorney reads the Last Will and Testament of the loved one “out loud” for all to hear.
The reality is that this is not required by the law, and is not usually done. I was asked to read a Will of a deceased client for a family (probably 15 years ago), and tried to convince the family it was not necessary. They insisted, and said that the deceased expected me to do this for him, and so I performed as requested. It was awkward and unusual, but I did what I needed to do to honor the decedent. I tried to handle this as respectfully as possible, and in the end, the family was satisfied. The reality is that a Last Will and Testament is filed at the courthouse in the county of residence/domicile of the decedent. It is not read aloud, but it is placed on the public record. Any person can visit the courthouse and review the filed Wills of deceased persons.
Mythical statement number four:When I sign my Last Will and Testament, I must file it at the courthouse.
The reality is that a Last Will and Testament cannot be filed at a courthouse until you have died. A Will is filed along with your death certificate – and no sooner. The courthouse will STORE your Will for you (you must “check it in” and only you can “check it out”), but the court officials will not file it at any time prior to your death. You see, you can change your Will – so why would the court pursue filing a document that could be changed?
Mythical statement number five: If I get sick and need help with my financial or personal affairs, my Executor, as named in my Will, has legal authority to help me.
The reality is that your Executor has NO power to do anything for you while you are living. Your Executor only has power once you die. If you are sick and need help, you must have a power of attorney or court appointed guardian to help you.
Mythical statement number six: I have my child named as a co-owner of my bank account, and so I do not need a power of attorney.
The reality is that you manage and handle much more than a bank account. What if you are in a car accident and unconscious and/or immobile for a week or a month? Your child can pay your bills but what about the following:
- Signing your (wrecked) car title to get the auto insurance company claim handled – or speaking on your behalf with your car insurance company
- Calling your former employer if your pension somehow gets disrupted and doesn’t pay
- Calling on your health insurance company to coordinate payment for services – especially if there is a question or issue
- Directing your homeowners insurance on a claim (because when it rains it pours) that occurred while your house sat empty and the washing machine hose broke free and Niagara Falls occurred in the house
- Complaining to your cell phone company because the auto pay somehow took two times the amount it was supposed to from your bank account that month
- Telling the hospitalist that you would NOT want a certain procedure to be done, and therefore it should NOT be done
- Getting a second opinion on your treatment by hiring a different doctor to review your case, because the treatment offered is not up to par
- And so on
Your child, as a co-owner of your bank account could not do any of the above without power of attorney for you. If your child does not have power of attorney, then your child will have to go through time consuming and a relatively expensive guardianship lawsuit to try to gain legal power to help you.
Mythical statement number seven: probate is horrible – it should be avoided at all costs. It is expensive and takes years.
The reality is that probate, in North Carolina, can be as short as three months – and sometimes last only one day! It may be prudent to avoid probate in some instances, but probate is not as bad as certain trust peddlers make it appear. NC probate is not as expensive as other states (in North Carolina, the costs of probate are not assessed on any real property or life insurance, or annuities, or IRAs, or accounts with right of survivorship. The costs of probate are only assessed against solely owned assets). The costs of probate
are not as exorbitant as they are often portrayed. Again, avoiding probate may be recommended, but there is no fire – and the sky is not falling – if you must go through probate. Do not fear!
I love a good story – especially a story that has been handed down from generation to generation; however, when the stories work to promote an idea that is false, we need to try to squelch it. In our era of FAKE NEWS, I hope that this article helps curb a few false ideas.
Margaret (Mia) Lorenz is an attorney in Southern Pines at Lorenz and Creed Law Firm PLLC, where she helps people with many legal needs such as preparing their wills and/or trusts, helping when a loved one dies, and helping purchase or sell real estate. She has been assisting people with their legal needs for 26 years. In addition to her husband, John, to whom she has been married for 27 years, she has two children (Matthew and Nicole); three furry children (Brandy (basset beagle hound mix), Mickey and Minnie (cats); and is grandmother to two furry grandchildren (Clif the dog and Aurora, the cat).