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  • Tom Lewis

Do You Have A Plan For Your Estate?



For most people, their home is among their most valuable assets. Nonetheless, many people lack estate plans that sufficiently, or efficiently, handle the transfer of their ownership interest in real estate upon their death. In some instances, the insufficient planning stems from misunderstood legal doctrines. The following are illustrations of some of these scenarios:


  • Ricky was a businessman who led a fairly simple life. As a single man, he enjoyed volunteering in the community and spending time at his second home, a condo at the beach. Ricky was successful in his business and was able to pay off his mortgage loan on his condo. One day, Ricky met Lucy. After a period of dating, they married and enjoyed a long, happy life together. Ricky never gave much thought to his estate plan. At one point, he executed a simple will which left all of his property, including his beach condo, to Lucy. As Ricky got older, his financial prudence from earlier in life began to dissipate, and he made some reckless financial decisions. Eventually, those decisions came to a head, and Ricky had numerous judgments entered against him totaling over $200,000.00. Ricky assured Lucy that everything was fine; a friend previously told Ricky that if you own real estate while married, a creditor of only one spouse cannot encumber your real estate. When Ricky passed away, Lucy received the unfortunate news from her attorney that the $200,000.00 in judgments, with daily interest accruing, were liens on the beach condo and that creditors would seek to have the beach condo sold to satisfy the judgments if they were not paid. Unfortunately, Ricky misunderstood the concept of “tenancy by the entirety”, a form of real estate ownership specifically reserved for married couples under North Carolina law. A married couple takes title as tenants by the entirety if their deed specifies that the couple is married, or if the couple is in fact married when they take title to the real estate (if the deed is silent as to marital status), unless the couple demonstrates a contrary intent on the deed. Tenancy by the entirety comes with specific benefits. First, upon the passing of one spouse, title to the entire property vests in the surviving spouse automatically. Secondly, creditors of only one spouse cannot encumber real estate owned as tenants by the entirety. One misconception of tenancy by the entirety is that as long as you are married at some point during your joint ownership of the property, or as long as you are married when one spouse passes away, you may have the benefits of a tenancy by the entirety. Ricky likely could have avoided the scenario above if, upon his marriage to Lucy, he reconveyed the condo to himself and Lucy as tenants by the entirety. Or, Ricky could have sought advice on placing the condo in a specific type of trust or LLC. It is important that upon the purchase of real estate, you discuss your future planning goals with your attorney to determine the best form of ownership to efficiently achieve those goals. Additionally, it is important to formulate an estate plan that ensures your goals are achieved regardless of the form of real estate ownership you have.

  • Jerry owned a beautiful house in eastern North Carolina. As Jerry got older and after his wife passed away, he decided it was time to put his estate plan in writing. Thinking his estate would be relatively simple to administer, Jerry logged on to the internet and found a form document entitled “Simple Will.” Jerry pondered what should happen to his assets when he passed away. He loved all four of his children, but they did not always get along. Ultimately, Jerry decided to simply leave everything equally to his four children. He named his oldest son, Tom, to be his executor. Jerry thought, “if they can’t agree what to do with the house, Tom can just sell it.” Years later, Jerry died and predictably, his four children could not agree on what to do with the house. Three of Jerry’s children wanted to sell the house. However, Jerry’s youngest child, Wiley, did not want to sell. Wiley was sentimentally attached to the house and wanted to live in it. Unable to reach a consensus, Tom announced to his siblings that he, as executor, would sell the house himself. However, when Tom informed his attorney of this plan, she told Tom that he did not have sufficient power to carry out his plan. The siblings instead waited months as Tom was forced to institute a costly legal proceeding, which Wiley contested, to obtain authority to sell the property.

Unfortunately, both Jerry and Tom misunderstood the role of the executor in administering an estate. In many cases, an executor is given express authority in a will to sell any real estate belonging to the deceased party. In other cases, the will expressly directs the executor to sell real estate. However, the will Jerry pulled from the internet did not contain sufficient directives or empowering provisions to allow Tom to avoid the costly family dispute that eventually occurred. Unless a deceased party confers adequate authority upon his or her executor, an executor does not have inherent authority to sell real estate belonging to the deceased party without court authorization.

Again, this scenario can be avoided by consulting estate planning professionals who can help you achieve your planning goals. After all, real estate is often our most cherished and valuable asset. You work to be able to purchase real estate and make it your home. Accordingly, when you pass away, your real estate should go exactly where you want it to go. Consulting with experienced counsel can ensure that you meet these ultimate goals.


Sumrell Sugg, P.A. is a regional legal firm that provides clients with first-rate services in a cost-effective manner. Whether clients are individuals, corporations, or local governments and municipalities, our firm delivers on an undeviating promise of service. For more information, visit us at www.nclawyers.com.




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