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In this insightful discussion, Cameron, the Marketing and Business Development Manager at New Direction Family Law, and Elizabeth Stevenson, a partner at the firm, dive deep into the intricate intersection of estate planning and family law with Hampton Crumpler, an attorney at NC Planning. They explore the complexities of generational wealth, trusts, wills, and how these elements play crucial roles in divorce, custody battles, and property division. Key topics include the impact of prenuptial and postnuptial agreements, protecting assets for children from previous marriages, the importance of regularly updating estate plans, and understanding the differences between revocable and irrevocable trusts. Tune in to gain valuable insights into how smart estate planning can save time, money, and stress for your family.
00:00 Introduction and Guest Introduction
00:57 Intersection of Estate Planning and Family Law
01:34 Prenups, Postnups, and Estate Planning
07:15 Trusts for Minor Children
10:15 Revocable vs. Irrevocable Trusts
12:26 Blended Families and Q-Tip Trusts
15:12 Importance of Having a Will
18:32 Inherited Property and Marital Assets
21:06 Tax Consequences of Inherited Money
21:30 Trusts and Taxation
22:22 Real Estate and Inheritance
23:47 Estate Planning and Separation Agreements
25:44 Gifts and Marital Property
27:09 Handling Property in Divorce
28:58 Importance of Estate Planning
31:53 Updating Estate Plans
33:02 Legal Representation in Divorce
34:49 Getting in Touch with an Estate Planning Attorney
37:17 Final Thoughts on Estate Planning
Creators and Guests
Host
Cameron Heinsohn
Marketing & Business Development Manager
Host
Guest
Hampton Crumpler
Hampton has always had a passion for assisting people in the community and writing. These two passions drove him to attend law school soon after college. Excelling in contracts, business associations, and wills and trusts, Hampton ultimately decided to pursue a legal career in the estate planning and corporate law fields.
What is Ex-it Strategy?
Your no bullsh$t guide to divorce with experienced attorneys from New Direction Family Law and guests and professionals who have been there. Unfiltered discussions to help you move from victim to victorious and from bitter to better.
73 - Exit Strategy - Hampton Crumpler
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Cameron Heinsohn: [00:00:00] Welcome or welcome back. I am Cameron. I am the marketing and business development manager at New Direction Family Law and we've got with us today Hampton Crumpler. He's an attorney at NC Planning. Mm-hmm. And, um, graduated from Campbell Law School has been working in on the. Estate planning side of things.
That's right. Um, since then and um, is gonna talk to us a little bit about kind of generational wealth and trusts and that intersection with family law today, along with Elizabeth Stevenson.
Elizabeth A. Stephenson: Hello everyone. I'm Elizabeth Stevenson. I'm one of the partners at New Direction Family Law Hampton. Thanks for being here today.
Hampton Crumpler: Absolutely.
Elizabeth A. Stephenson: before we started, we were talking a little bit about. [00:01:00] You know, is there even an intersection between the states and wills and family law? Yep. You know, custody, support, property, all of that sort of division. So as a general rule, what would you say to that?
Hampton Crumpler: Yeah, I would say absolutely. We have clients coming in every day, basically that'll present us with a prenup or some sort of postnup that they got executed.
So whenever we're, we're meeting with someone, we're looking at, you know, what kind of a state they have set up. We always have to consider are there any family law documents out there? Mm-hmm. And we obviously review them. Um, typically when we're dealing with kind of the intersection there between family law and estate planning, a lot of the time it's gonna be centered around if, you know, God forbid one of the spouses were to pass away, what are the rights?
Of the surviving spouse, if any. Right. So we usually have discussions around that, but it's gonna be important as well to kind of craft their plan around the prenup if they have one. Um, if, you know, certain [00:02:00] assets were deemed to be kept separate,
Elizabeth A. Stephenson: right?
Hampton Crumpler: Um, you know, we always wanna be mindful of that when we're doing a plan.
And this could be any type of plan. It could be a just, you know, run of the mill last will and testament plan that we do. Or it could be a more advanced trust. Right. And that'll just kind of depend, but yeah. Right. There's definitely a big intersection there that we see.
Elizabeth A. Stephenson: Right. And so just as a general, I tell, this is one question I always ask people who come in for an initial consultation mm-hmm.
Is. And they're separated. They're not divorced, you have a will. It's like, no. Said, well, you know, if your spouse dies today right. You know you're gonna get that all or vice versa.
Hampton Crumpler: That's right. Yeah, that's right. There's always, you know, kind of a statute floating around that'll kind of dictate where assets can go, especially if you don't have a plan in place.
Right. One of the biggest quirks we see on the estate planning side is if, like on a financial account, you have your spouse listed as a beneficiary on there. Right. And then if you're separated or divorced in North Carolina, that's not gonna [00:03:00] automatically cut your spouse off of that, that beneficiary designation.
So we have a lot of clients that are kind of shocked by that. But I think one of the biggest kind of. I, I'll say shock moments that, that we kind of discuss with clients is, you know, you can never really disinherit your spouse with the exception of if you have a prenup. Correct. Or post up in place.
Right. So, like we were talking about earlier, sometimes we'll meet with clients and they get in and they're just wanting to leave all to their kids from maybe a previous marriage. You know, maybe we have a, like a blended family set up. And I always kind of have to be like, you know, let's pump the brakes a little bit.
We, you know, I have to be the bearer of bad news here, just to kind of inform the clients of that elective share statute. Um, in North Carolina, a spouse, depending on the length of the marriage, is statutorily entitled to a percentage percentage of the estate generally, you know, so the maximum [00:04:00] cap is gonna be, you know, if you've been married 15 years or more.
Then the spouse can claim up to half of the estate at that point.
Cameron Heinsohn: Right.
Hampton Crumpler: And a lot of people aren't aware of that, so it's just, it's almost kind of like a, it's like a, an educational event more than anything to let them know that. But it's really important when we have blended setups, if, if a spouse wants to make sure that assets get to their kids from the previous marriage.
That's when it can really come up. Um, but it happens a lot where clients come in. Maybe we just meet with one spouse. Maybe we don't even meet with both of them. One spouse comes in and says, says, can you
Elizabeth A. Stephenson: meet? Like, I can't meet with both people. Yeah, we can. You can, you can meet with both, right? Yes, we can do
Hampton Crumpler: a joint representation.
There's no confidentiality if we do that joint representation. But sometimes we'll just meet with one spouse and it's kind of just a one-on-one relationship there. Um, and, you know, we have to inform them of the laws as they are. If they're trying to just say, Hey, I'm, I'm not planning on leaving anything to my husband.
Right, [00:05:00] right. I'll ask, the first question I ask is, do you have a prenup or, right, right. Is there any sort of postnup? And usually the answer is, Nope. Nope. So then we, would it
Cameron Heinsohn: be easier or easiest for them in that scenario as the client to go get a postnup?
Hampton Crumpler: They could. I mean, that's, that's the easiest way.
Well, what,
Elizabeth A. Stephenson: what, well, and what would a postnup do?
Hampton Crumpler: Yeah. So a postnup is, you know, it functions like a prenup, but it's executed after the marriage. So the problem there is like, you know, your spouse has to agree to it. Correct. That's like the hurdle that they have to jump over, right? It's like, well, you know, your spouse can waive the elective share in a postnup, but you think they're gonna sign it.
Oh no, he'd never sign that. Right. So you sort of missed the out on that one. And we get all there with that. So yeah, either way
Cameron Heinsohn: they have to sign something saying, I'm good with it.
Elizabeth A. Stephenson: Right. That's right. Right. And they'll do. And, um. Well, let me ask you this. Is it specific, 'cause ours generally include like a, just a generic waiver about estate rights.
You can't inherit, you can't take unless of course you can. If you do it outside and do it in a will, whatever, you can do that. Is that what,
Hampton Crumpler: that's right. Is that what you
Elizabeth A. Stephenson: need to look for? And that's,
Hampton Crumpler: yeah, that's usually what we look for. Um, [00:06:00] I saw a prenup last week that didn't have any elective share rights waived in it.
It was not done by an attorney. I'm shocked. Yeah. A Google
Elizabeth A. Stephenson: attorney.
Hampton Crumpler: I, but this, it was kind of a, it was a interesting situation because the spouses were very like agreeable. They're like, oh, yeah, well, we'll go ahead and execute a postnup where we'll waive that elective share. I was like. Okay. Okay. Yeah, you can do that.
Yeah, absolutely. You know, we usually like to see statutory reference and say, right, you know, that, that the surviving spouse waives any claim to that. And when that happens, the estate plan will govern. Right? Right. So if one spouse passes, really we can just rely on the documents. There's not gonna be any sort of lingering spousal claim, that issue out there that can be made.
Right.
Elizabeth A. Stephenson: Yeah. And what about, um, as regards to like. Protecting. Let's say your children are under 18. They're not so second marriage. They're not grown, but they're. With another spouse. What, is there anything you can do to protect, do that?
Hampton Crumpler: Yeah. So it Do [00:07:00] you mean like if, if it's like kids from, you're say in a previous marriage, marriage
Elizabeth A. Stephenson: and they're underage, what would you, I mean, they're not gonna hand that like we were just talking $500,000, I mean, right.
Can you set up something for them in the, in the event you die and they're still underage? What, what can you do regard that you can,
Hampton Crumpler: I mean, you can, you can always set up a trust. I mean, that's always kind of our go-to model for especially minor kids. Mm-hmm. Because. Usually people don't want to just dump a giant sum of money on an 18-year-old, right?
Like, I don't, you know, who knows what I would've done if I got half a million or a million dollars at age 18? So usually we see a trust set up,
Elizabeth A. Stephenson: okay?
Hampton Crumpler: And, you know, it varies on how those are gonna be set up, but the trust is like the go-to way to kind of protect those assets for the child so they can benefit from it.
You could set maybe age benchmarks where they could be entitled to some money or you could, you know, make it a lifetime, what we call a discretionary trust for, for their whole life where someone else is actually managing the money. Right. And something, you [00:08:00] know, another intersection here with family law is I.
The trustee can be separate from the legal guardian of the child. Right? So you could have the, the parent of the child that actually has custody or what have you. The trustee can be someone else, right? It could be a bank, it could be a third party, could be a friend, another family member. But that's the person that kind of actually manages the pot under the trust.
Gotcha.
Elizabeth A. Stephenson: Yeah. It could be a little sticky with an, you know. The person that died and the ex. Mm-hmm. You know, they don't like the person that you that is gonna do the dress. I didn't money for
Cameron Heinsohn: private school. No, you don't.
Hampton Crumpler: Exactly. Yeah. Most people, especially when we're doing our plans, they like to have guardian and trustee be the same person.
Absolutely.
Cameron Heinsohn: Yeah.
Hampton Crumpler: But sometimes we get clients, they're like, we want a checks and balances sort of thing there. So, you know, we, we see it both ways, but by far most common is guardians wearing a different hat.
Elizabeth A. Stephenson: Right. When
Hampton Crumpler: they're serving as a trustee. Right. But yeah, that, that trust is a great vehicle for that.
Elizabeth A. Stephenson: If you have a supporting spouse and a dependent spouse and you're, you're dividing this multimillion dollar estate, um, is it, would [00:09:00] you suggest that the someone who doesn't have that finess, that you, that, that this spouse has always taken care of the investments, done this and that.
Mm-hmm. Would you suggest, what would you suggest for the spouses coming into that money? Are you the person that they need to go see to protect those assets perhaps? Sure.
Hampton Crumpler: We, we can be, we provide legal counsel to trustees all the time. I mean, we don't have to be the named trustee in the document, but if whenever we're dealing with a beneficiary of a trust, for example, we can kind of be that, it's almost like a checks and balances for, you know, us between us and the trustee, right?
Where we can kind of provide guidance. For, for the trustee going forward. And we kind of tell them, okay, you know, you're gonna wanna work with a financial advisor, right? We're gonna wanna make sure we have a good CPA on hand so all taxes are filed appropriately, right? But we can kind of hold their hand through that process as needed.
Um, and our firm has a great administrative team, so we, we do obviously probate administrations. Mm-hmm. But we handle [00:10:00] private family trust administrations as well. Um, sometimes we'll actually serve as the trustee, but usually we're kind of in an advisory role
Elizabeth A. Stephenson: role. Mm-hmm.
Hampton Crumpler: Makes sense. Yeah.
Elizabeth A. Stephenson: And so, um, as far as what, talk about trust.
Hampton Crumpler: Mm-hmm.
Elizabeth A. Stephenson: What's the difference between an revocable trust and an irrevocable trust?
Hampton Crumpler: Yeah, so they're totally different beasts. A revocable trust is usually a, it's kind of like a will substitute. It's what people will use to avoid probate. Make things efficient for their family and obviously save on some taxes here and there.
Primarily for retirement accounts, right? Retirement accounts can get stuck with some pretty bad payout periods if they go to probate. So usually a revocable trust is gonna be used for efficiency,
Elizabeth A. Stephenson: okay?
Hampton Crumpler: For making things easier for your family. It's also really helpful if you're a small business owner.
Let's say you own an LLC, you own an S corp, right? Usually we like to actually assign the [00:11:00] ownership into the trust of that business just to make sure there is no probate exposure. If one spouse passes, we don't have to be dealing with a business interest in probate. So revocable trust is a great tool to keep all of that private and with the family.
Elizabeth A. Stephenson: And so, speaking of business, 'cause we do a lot with closely held businesses. Yep. And so. Could you put, do, do you have to be full ownership? No. Or can you put your percentage in to a trust to protect that? Yep.
Hampton Crumpler: You can do your percentage. Um, even if it's like you've got 20 owners and you own 15%, you can still assign your percentage.
I. We wanna make sure that we have good internal documentation, like consent minutes and all that. Mm-hmm. That shows that all the other owners, they said, yep, we're good with this. Okay. They signed off on it. And then, you know, the new operating agreement will typically reflect that the trust is now the owner of that 15%.
Elizabeth A. Stephenson: Okay.
Hampton Crumpler: But you have the flexibility there.
Elizabeth A. Stephenson: And so, um, as far [00:12:00] as, we talked a little bit about, 'cause we see a lot, I call it the grain of divorce. Yeah. You're older, you get divorced, and then you, um, remarry. Mm-hmm. You know, but you have these, um, adult children. Yep. But then you've got new children.
Hampton Crumpler: Right.
Elizabeth A. Stephenson: You know, and, and the new marriage.
Sure. So. What's, how do you do that? How do you protect everybody? I mean, it seems like you get stuck in the middle a lot. You gotta make everybody happy. That's right.
Hampton Crumpler: You know, there's some different tools in the toolbox there. We always kind of start at, you know, ground zero and say, you know, your first line of action could just be too.
Leave everything to your spouse, right? And trust, wink wink, that they will honor your wishes and provide for your kids from a previous marriage independently. But a lot of people, you know, that's, that's a little scary and understandably, right? So some people will opt for what we call a Q-tip trust. Um, this is a, a trust that was basically designed for blended marriages.
Hmm. And it allows a spouse, if a spouse passes away, it [00:13:00] allows. The deceased spouse, instead of just giving everything to their spouse, they actually hold everything in trust for their spouse and their spouse can get access to income. Right? Like we usually have some sort of like a quarterly income payout for, for the surviving spouse, but they don't have unfettered access to it.
They can't just take it all. Right. And this type of trust set up will ensure that we get the unlimited marital deduction for taxes. So even though we're holding it in trust mm-hmm. For the surviving spouse mm-hmm. There's still no tax levied on any assets going to, to the surrounding spouse trust. But the cool thing about this trust is when the surviving spouse eventually does pass, the trust will then dictate where the money goes at that point.
Yeah. So in your example, if you've got two kids from a prior marriage and then two. Children from the current marriage, we could have a four way split, or we could do some other percentage distribution there if we wanted to. Um, it's just however, the, the first to pass, however they decided to set up, show up that trust.
But that's, that's a great tool in the [00:14:00] toolbox for blended families. I
Elizabeth A. Stephenson: don't do wills and instead I've never heard of that before. That one's not. Oh, my bar exam, I did a Yep.
Hampton Crumpler: Yeah, that's, it's, it's a pretty common trust set up, especially for, for blended families because. You actually get the full marital deduction, which, right.
You know, before the Q-tip was recognized and the IRS recognized it and everything, if you were holding something in trust for a spouse, unless you gave them the ability to dictate where the assets went after the survivor passed, you get no marital deduction. But the Q-tip trust allows us to restrictively hold things while also getting that tax advantage.
Yeah, that's good. Yeah.
Cameron Heinsohn: So you're dealing with splitting stuff up after passing. Mm-hmm. And we deal with split stuff. We stuff up prior. Prior to. Yes. Even though they may
Elizabeth A. Stephenson: want it to be that way. Yeah. It's interesting. Right? So does everyone, so does everyone need a will? And is it. Is it [00:15:00] important to, for both parties to sit there?
I mean, everybody has like reciprocal ones. Everybody for the most part that I talk to. Yep.
Hampton Crumpler: Your image, you know, you're my, you're mine,
Elizabeth A. Stephenson: I'm yours, and that's right. Sort of thing. That's right, that's right. So I mean, is that generally
Hampton Crumpler: Absolutely. Um, because if you don't have any plan in place, you, you, you pass away in test state.
Right. And that means that the laws of North Carolina are gonna dictate where your property goes. And we've seen some horror stories with, with people that don't have anything in place. A lot of spouses will just assume, oh, if I pass and I don't have anything, everything's gonna go to my spouse. Right?
Anyways, but that's not actually true. We had a blended family set up one time. There were two estranged children from previous marriage. Mm-hmm. And the, the wife actually owned the house that her and her new husband lived in. She owned it a hundred percent. Right.
Elizabeth A. Stephenson: Okay.
Hampton Crumpler: So she didn't have an estate plan in place.
She passed away. And mind you, these estranged children were hers. He didn't have any kids. Okay. [00:16:00] So when she passed away, 'cause she had no plan, I. Laws of North Carolina kicked in and instead of the house going to the husband like he assumed it would, right. It actually vested in him and the two estranged ed kids.
So now they're in court,
Elizabeth A. Stephenson: right.
Hampton Crumpler: Litigating that. Right. Um, battling that out. And it's probably gonna have to be sold, which is a bummer because the husband wanted to continue to keep, keep there. It was his house. But you know, really your only option if you've got co-owners, it basically has to be petitioned for part petition, sale and property to keep.
Yeah. So, yes, always have a plan.
Elizabeth A. Stephenson: Always have a plan. So we were talking about a little bit about retirement and things and that, um. A lot of times, you know, people come to me, their spouse is on there, but they can't, unless the spouse consent, they're not getting changed. That's right. So let's say in that year before I get divorced and they're going to distribute that portion of my ira.
Mm-hmm. What happens if I die? I mean,
Hampton Crumpler: yeah. That, that'll usually, I mean, if, if spouse is still on the beneficiary, you know, the spouses. [00:17:00]
Elizabeth A. Stephenson: The purchase, even if I, even if I have a separation agreement and it, I waived
Hampton Crumpler: Yeah. If you have a valid separation agreement, that's totally different ball game. Okay. You, you can have a separation agreement that kind of waives any rights there.
Elizabeth A. Stephenson: Even if I remain as a beneficiary on mm-hmm. On your,
Hampton Crumpler: yeah. Right. Usually it's just, it's more work on the back end. Okay. 'cause then it's like, you know. Fidelity or whoever's actually, you know, housing the 401k or whatever it's gonna be like, well, you know, they're gonna need a copy of it. And there could be some, some potential legwork on the back end, but it can be done.
Okay. I mean, it's freedom of contract to, to do that. Interesting.
Elizabeth A. Stephenson: [00:18:00] What else Cam, do you think, do you hear on, on your end? Anything? Yeah,
Cameron Heinsohn: we, you know, we get a lot of questions about, you know, what about inherited property? And if it is, then becomes marital property, right? Mm-hmm.
Elizabeth A. Stephenson: if I'm married and my grandmother dies and gives me $400,000, right.
What hap, I mean, is it yours or is it mine property? Is it yours, mine, or ours? How does that work?
Hampton Crumpler: Yeah. Well, North Carolina, as I'm sure you guys discussed earlier, it's not a community property state. So the general rule is if, if you're inheriting [00:19:00] something, let's say from your father or your mother it's, it's like a gift, right?
So it's treated as separate property unless. After the fact, the person who inherited it commingled assets with, with marital assets, then you could have a problem. But usually if, if we have, let's say someone inheriting like a bank account and there's, it's like a checking account, right? There's a hundred grand in there, right?
That's gonna be their separate property. As long as they keep it separate and we can clearly trace, trace where money has gone from that account. It'll remain separate property. Um, is that
Cameron Heinsohn: the case? If it's inherited before or after marriage? Mm-hmm. That's right. Mm-hmm. Yep.
Hampton Crumpler: That's right. Same exact thing.
Some people though, you know, they're, they're a little bit more concerned about it, especially for their kids, and that's where trust can also play a big role as well. I was gonna ask
Elizabeth A. Stephenson: you should, it's, you know, I have a client who just inherited a. Boatload of money, should I send them to you to make sure that that's protected?
Hampton Crumpler: Yeah, it well, so if they're inheriting a bunch of money, it's gonna depend [00:20:00] on the setup of their parents' plan. So how their parents passed it down, did they just get it outright or are they the beneficiary of their parents' trust? Right. So totally different setup there. Either way, it will be their separate interest.
Interest. We just kind of have to figure out where we go from there. If their parents' trust left it to them, let's say it was just like a lifetime discretionary trust, right, where they don't really have control over it. They, they can get access to it for, we call it HEMS, hems purposes, health education, general maintenance and support.
They can get distributions for that, but they don't have like full control over the assets. That's pretty much ironclad. It will stay a separate asset. So if they get divorced, that should, yeah, that should be protected. Doesn't
Elizabeth A. Stephenson: that doesn't get divided.
Hampton Crumpler: Yeah, that's right. But if they're just inheriting it straight up, then we have to see.
Okay. You know, do we want, how do we wanna keep this separate? How you know how, right? How do we want to invest it? But the bottom line is if they're worried about, [00:21:00] you know, equitable division, if something happens, they should take action to keep it separate. Separate. And make sure that
Elizabeth A. Stephenson: that's done. And so for support purposes, which I know you don't deal with, but.
If I do inherit that money and you've, and you know it's in a trust and it's being invested and I'm making money, are there tax consequences or does that count as in, is that income to a person?
Hampton Crumpler: It's, yep. So generally speaking, principal, what we call principal, is inherited tax free. But tax always has to be paid on income,
Elizabeth A. Stephenson: right?
Hampton Crumpler: So if. For example, if we have a trust set up, like let's say there's a brokerage account sitting in the trust and it's earning dividends or something that's considered income, so either the trust pays the tax annually. Mm-hmm. Files a 10 41, right. Pays the tax or. The trust can push out the income to the beneficiary.
Beneficiary. It's still their separate property, right. But they can pay the tax at their individual rate, which is great. Right? So we usually, whenever we have like a family member serving as a trustee, if we've got [00:22:00] income in the trust, we're always gonna say, go ahead and kick that out if you can. Because a trust hits the high 40% bracket.
Gotcha. Really fast. Only about 14,000 worth of income. And it's there. It's at, it's at that bracket. Okay. So we can actually take advantage of the beneficiary's individual rate if we push it out.
Elizabeth A. Stephenson: Yeah. Sounds interesting. So,
Cameron Heinsohn: um, what about property? I know we've talked about like bank accounts and cash. Is it like that with property too?
Hampton Crumpler: Yeah, same thing for real estate. Um, you know, usually people are wanting to get what we call a step up in basis for real estate, and this is for capital gains. Mm-hmm. Which is, you know, a type of income tax whether it's going through a trust or through a will. The step Up is an at death event. So when someone passes away, for example, any beneficiary receiving it typically gets a step up, and that just means that if they turn around and sell the property, there could basically be no gain, depending on how quick they do it, do it.
Um, but generally speaking, real estate is, [00:23:00] is still inherited, like a gift, so there's no like inheritance tax on that, right? The only type of tax we're typically worried about when someone passes away right off the bat is the estate tax,
Elizabeth A. Stephenson: right?
Hampton Crumpler: North Carolina doesn't have estate level estate tax, so we're just dealing with the federal.
The exemptions through the roof. The roof right now about 14 million per person right now,
Elizabeth A. Stephenson: think we're safe, right? Yeah, I'm, I'm, I dunno about anybody else.
Hampton Crumpler: Yeah. For 98% of our clients, we don't even have to bother with any sort of tax planning. But yeah, real estate, generally speaking, it's gonna be treated like a gift and it's still separate property.
Cameron Heinsohn: So little bit different scenario. But if there's property that.
Can you, either through your estate plan or through, um, your separation agreement specifically say, 'cause I think that's one of the things we counsel our clients on a lot is if you're getting, you know, retirement benefits, [00:24:00] there's taxes involved in that. Mm-hmm. So make sure you take that into account.
Right, right. And so through an estate plan or through separation agreement, if I wanted to pass property, but say, well, you can't have it un. As part of my separation agreement, we're gonna agree to this, but it doesn't actually pass until my passing Do those two can, can that happen?
Hampton Crumpler: It can. Um, I mean, you could, the world is your oyster with your estate plan.
So if you have, if you've got like a prenup, for example, in place that says, you know, Bob owned this house in Myrtle Beach before the marriage, it will remain his separate property. No claims to that. The estate plan can say, per our prenup dated X, Y, Z. Mm-hmm. Right. I am leaving this piece of real estate to Joe, like my friend Joe, or I'm gonna hold it in trust for my child.
You, you can do that. And that's when we look at the prenup mm-hmm. And we draft the plan to kind of go with it,
Elizabeth A. Stephenson: because a prenup will generally say, this is your separate property [00:25:00] and any separate property, property sold mm-hmm. You know, will still remain separate. Mm-hmm. So even would that, so if it's named specifically in the, in the.
The trust and it's sold. Will the separation agreement cover that? They should. It still remains. That's right. Separate property, right?
Hampton Crumpler: Yeah, that's right. Same thing there. Um, but can
Cameron Heinsohn: you dictate how something passed passes at your own passing through your separation agreement? No. Okay. So you can't be like, I I owe you one.
I'll pay you later.
Elizabeth A. Stephenson: Well, I mean, you could, but I, that would be a mess to try to enforce. I can't, I can't do contempt on a, on a debt person. You would not advise that. I would not advise that at all.
Cameron Heinsohn: Okay. Got
Elizabeth A. Stephenson: it.
Hampton Crumpler: Do that
Elizabeth A. Stephenson: through
Hampton Crumpler: your estate planning, please. That's right. Yeah. They kind of work in harmony in that way though, so,
Elizabeth A. Stephenson: okay.
Yeah. But I will say that, um, case law is very specific about what passes as a gift. It has, it has to be in writing. So the trust or the will would do that. Mm-hmm. Or they write on a piece of paper. And that have to be, just has to show the intent that it's your separate property. Right?
Cameron Heinsohn: Mm.
Elizabeth A. Stephenson: Because you can get money [00:26:00] from your, from somebody.
But if I don't have anything that says it's a gift. Then it's going to go into the marital pot.
Cameron Heinsohn: Okay.
Elizabeth A. Stephenson: And that goes for anything, not just, not just if you die, but mm-hmm. You know, somebody would give you your allowance that you're allowed to get every year or whatever. You wanna make sure that that is labeled as gift to you.
Definitely family
Cameron Heinsohn: heirloom, like engagement ring,
Elizabeth A. Stephenson: anything like that. Something that you might
Cameron Heinsohn: wanna hang on to keep it in. It's
Elizabeth A. Stephenson: like, um, saying we're a trace, you know, if you. You can trace it out. We can say it's separate, but just keep it in a separate account.
Hampton Crumpler: Right. Is what I would say make life easy.
Right. On yourself and your family. That's right.
Elizabeth A. Stephenson: And if you're putting, if you're using your separate money to improve your marital residence, make sure you can trace that out. You won't. That's gonna be tough to get you that back. Right. Because you're putting into a marital interest. Mm-hmm. That's serving the 'cause.
The state looks at you as one person. Yeah. So you used your. Thank you ma'am. That's very nice of you. But you're not, get a payback on that.
Cameron Heinsohn: Kind of like what you said about co-mingling. Yeah, like once you start then, [00:27:00] right. If it goes into a joint
Elizabeth A. Stephenson: account, even though it shows that it was from an estate or from a will, it's gonna be tough to say that's your separate property.
Yeah.
Hampton Crumpler: Yeah. You know, the same thing can kind of happen with a spouse that's a beneficiary of a trust. You know, we've seen some spouses try to actually currently put. What turned out to be marital property into their trust, to off, you know, to get some sort of creditor protection for it. Right. And then it's kind of like you've poisoned the pot at that point.
Right. In the trust. So now if, if they're separated or divorced, we gotta go in there
Elizabeth A. Stephenson: and to separate that piece out. Right. That would be messy.
Hampton Crumpler: It is. Talk about that. Yeah.
Elizabeth A. Stephenson: Yeah.
Cameron Heinsohn: Yeah. I just see that like especially the property thing being, you know, North Carolina, we've got some urban areas, but we do have a lot of like rural farmland and stuff like that.
And I just envision that being like a bigger issue with like big pieces of family land that have been Well, yeah,
Elizabeth A. Stephenson: and they get 20 siblings and everybody gets an acre and, or you've got one house and all four kids get That's right. Such a man. [00:28:00] Don't do that. Yeah. Please tell me you counsel people not to do
Hampton Crumpler: that.
Yeah. I, I mean, I, I kind of lead with your wish is my command, but Right. But you're the, you're the,
Cameron Heinsohn: that could be a problem. Yeah. One of our earlier episodes, we spent a lot of time saying, well, it depends.
Elizabeth A. Stephenson: That, I mean, absolutely. Yeah. Every, it's like we say. Don't come in here telling me what, what your friend, what happened in your friend's divorce?
'cause I don't care. It bids, you know, kind of thing.
Hampton Crumpler: Yeah. Everything's fact specific.
Elizabeth A. Stephenson: It is always. It is always. And I think that our two practices and areas of law are so similar. Mm-hmm. They have, they have a lot of cross because all the families in there, there's a whole lot of drama. Mm-hmm. And, and grief and all of that.
So you have the same issues. Right. You know, so our job through prenup and postnup is to protect it. And the same thing for you, right. It's like. These are not bad things. No. These can help you not have to go through mm-hmm. All of this. Like you say, families being in court. That's right. Going after each other is
Hampton Crumpler: horrible.
Yeah. That's one of the biggest things we always [00:29:00] preach is like your legacy could be a gift or it can be a burden.
Elizabeth A. Stephenson: Right.
Hampton Crumpler: Depending on your planning. So if. That could be, do you have a good prenup or post up in place? It could also be, do you have good estate planning documents? Right, right. That'll basically make sure everything is clear when you pass, for example.
Correct. Um, 'cause you know, it can get really messy really fast if you, you don't, and then you've got family members who are stressed and having to go to court Correct. To, you know, to probate something. Mm-hmm. Um, maybe we're having to rely on the statutes of North Carolina to see. Who's inheriting what,
Elizabeth A. Stephenson: what, right.
Hampton Crumpler: So we like to avoid the headbutting. That's, that's always the name of the game. We would love
Elizabeth A. Stephenson: that. Yeah. Well, actually on that
Cameron Heinsohn: note, right? And we get a lot of clients that approach us and wanna talk about child support or child custody because they have had a verbal kind of agreement in place. You know, the past five years and now all [00:30:00] of a sudden there's like things, somebody new in the picture or you stop getting along or whatever, and so now you're having to worry about like going to court and sorting things out or whatever, when you're ticked off and already not happy.
Right, exactly. You know, instead of if you had just done it when everything was amicable, right. You know, you'd probably be in a better shape, less stressful. So
Elizabeth A. Stephenson: is everybody. Need services like you provide, right? Like, I don't have, like, you know, I have a h own a house, you know, I don't, I got one pension and I mean, do I still need a, an, an estate plan or a will or trust?
Yes.
Hampton Crumpler: The, yeah, the answer's always gonna be yes. 'cause I mean, what if you inherit something from your great Aunt Lily that you didn't even know was in the family? It's like, oh, I. I just came into this piece of real estate from Alabama or something, right? It's like, if you don't have any plan in place, well then what are we doing?
Well then we've got probate in North Carolina. We've got probate, potential probate in Alabama, Alabama, or whatever state it is. [00:31:00] So it's a lot easier for your family. In that situation, especially if you have documents saying where everything goes, just so we're not having to hire an attorney and look at statute Right.
And see where things are gonna be passing. Um, so even if you have simple assets, usually the recommendation's gonna be you have something in place just in case.
Elizabeth A. Stephenson: Just in case.
Hampton Crumpler: Right. Or what if you had a financial account and you forgot to list a beneficiary on there? Right. It happens all the time.
Cameron Heinsohn: Right.
Hampton Crumpler: You know, it's like, oh, my mother passed away last year. We settled everything with the estate. And then we just realized there's an account floating around in the, in the ether out there. Right. That had like 35 grand in it. I was like, guess what? It's probate asset and we can't do a small estate either.
'cause it's over, it's over the limit. And then everyone's upset. Yeah. 'cause now we're having to, to reopen an estate potentially. So. Right.
Elizabeth A. Stephenson: Do, um, it's maybe my last question, but I have a lot of people, I ask if they have a will. I don't know. Do I? Where [00:32:00] is that? I mean, yeah. Do you suggest people come in for tuneups?
I mean, you know, especially around big life changing events, right? Yes.
Hampton Crumpler: Yeah. You know, it's always a good idea to dust off everything, you know, maybe, depending on your situation. It could be once a year, could be every other year, right? Um, but if you have some big life changes like divorce or something, right?
Go ahead and get updated documents, right? We do it all the time. But you need to be protected. So you know, it's a good idea to take a look at your documents, make sure that they're still doing what you want 'em to do, right? We meet with people all the time, like, well, I haven't looked at these in eight years.
And then I'll start, you know, reviewing the documents with them and they'll be like. We said that in there. I said, yeah, that where, that's where this house is going. And so, oh, we need to change that. So it's always smart to just go ahead and, and at, you know, even if you don't really anticipate any changes, there could have been changes in the law.
Right, exactly. That you're not aware of. So it's, it's wise to just Go ahead. Go ahead and just make [00:33:00] that appointment. Just
Elizabeth A. Stephenson: put it on your reminder. That's right.
Cameron Heinsohn: Yeah. So on that note, I guess, you know, big life change, divorce is something that we deal with a lot, right? Um, are you. I know you said you meet with people as couples.
Mm-hmm. Right. And so if they're, do they need to reapproach you? Like what if things are not amicable? Oh, that's
Elizabeth A. Stephenson: a really good question. Yeah. What are they
Cameron Heinsohn: gonna do about getting their documents changed if you were meeting
Elizabeth A. Stephenson: with both of them? No, I don't trust you anymore. 'cause this son of a bitch, there were,
Hampton Crumpler: well, it's funny, I actually have.
A matter right now where, you know, typical joint representation, right? There's no confidentiality. Confidentiality or anything. We'd already drafted all the documents. Right. We were doing a trust plan for 'em. And I met with the wife in the fall and she said, we're, we're getting divorced. And it was like outta left field.
Like I had no idea right? This was coming, but she was very emotional about it. So we kind of have to backpedal a little bit and we have kind of a boilerplate, um, conflict waiver that we send out. [00:34:00] We can still individually represent one of the spouses. Right. But we're gonna need both of them to sign off to sign off on the waiver.
Yeah. That there's a waiver there, but so we're dealing with that like right now this morning I was actually dealing with that.
Elizabeth A. Stephenson: So, so what happens if I tell you the story, we're getting divorced and blah, blah, blah. Is it still confident? I mean, and I tell you everything about I spent all this money, I, you know, I don't want him to find out.
But you've been seeing both of us, right? Is that confidential?
Hampton Crumpler: I mean, if it, if we have an ongoing joint representation. They've signed our, our agreement and it states in there, there is no confidentiality between both spouses, so there's no way to prevent that. Absent any sort of like a waiver and a reengaged individual representation,
Elizabeth A. Stephenson: you'd be a good witness to call someone.
Keep that in mind. I'll keep that in mind. That's right. So how do people get in touch with you, Hampton?
Hampton Crumpler: Um, so, you know, we're, we're all over the place in terms of presentations and by that I just mean we travel around a lot. We go give seminars in [00:35:00] Raleigh, Carrie. Oh, cool. We speak at plenty of 55 enough communities.
I just did one last week. Oh, nice. Dell Webb in in Clayton.
Cameron Heinsohn: Mm-hmm.
Hampton Crumpler: Um, but also we have online advertisements. A lot of people come to us from Google, just, you know, yeah. Looking around for an estate planning attorney in the area. But we have a lot of really great connections with financial advisors in the area.
Nice. Good. That's, that's probably our best in terms of quality. It's probably our best referral source is our financial advisors we work with. Mm-hmm. Whether it's Fidelity, captrust, Morgan Stanley. Um, you know, they, they always send quality referrals, um, right. And we can help them with pretty much anything they need on the estate side.
Elizabeth A. Stephenson: Is it, is it county speci specific? Can I call you if I'm in Durham or I'm in Orange County or whatever? Oh,
Hampton Crumpler: yeah. Yeah. We serve, I mean, most of our clients are gonna be the triangle, right. But we've got clients in, you know, the mountains, right? We've got clients down at Wilmington. Um, we technically have a little office space in Wilmington as well.
Oh,
Elizabeth A. Stephenson: nice. So, you know,
Hampton Crumpler: we,
Elizabeth A. Stephenson: I [00:36:00] aspire to that one day. And,
Hampton Crumpler: and the good thing is, is we've recently started, um, you know, partnering with some mobile notaries. Oh, nice. Yeah. So we have, you know, someone doing their documents, we can actually send a mobile notary to them. Right. Um, and she'll bring the witnesses, get everything buttoned up sign, send us digital copies.
And they don't even have to leave their house if they don't want to. That's
Elizabeth A. Stephenson: right. Because we can do the virtual. Notary, but we don't need witnesses. You gotta have, you gotta have what, three witnesses or whatever that may be. I forgot
Cameron Heinsohn: about that. Well, but it's, but it's not county specific as far as the documents.
They're good. Anywhere in the state Correct. Or anywhere.
Elizabeth A. Stephenson: So, so I move outta North Carolina. All my documents are North Carolina based. Am I cool?
Hampton Crumpler: Usually, I mean, pretty much all states will have a statute that says if you validly executed it in this state, we will recognize it here. Okay. Like North Carolina has one as well.
Okay. But the, you know, the textbook attorney recommendation will always be if you move states, update your documents, right, to be compliant with that state [00:37:00] statute so that if something does happen to you, your family doesn't have to, you know, get an affidavit, you know, from right witnesses from another state saying that it was validly executed and all that.
So. Usually we recommend just kind of give your plan a face lift if you do move.
Cameron Heinsohn: Good.
Hampton Crumpler: That's good
Elizabeth A. Stephenson: advice.
Hampton Crumpler: That's
Elizabeth A. Stephenson: Excellent.
Cameron Heinsohn: Yeah. Again, just about easing the burden on Right. On the family.
Hampton Crumpler: Right. The family. That's right. It's making it easier.
Cameron Heinsohn: Yeah.
Elizabeth A. Stephenson: Cool. Yeah. Thank you. Well, thank you so much. It was really, I thought, you know, you don't think of a state that taxes is kind of interesting and exciting, but it really could be.
I guess
Hampton Crumpler: it's, yeah. But no, I appreciate, I appreciate you guys having me on. This has been great. Sure. Great. Absolutely.
Cameron Heinsohn: Yeah. See ya. Ain't that some shit? Ain't that some shit?
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