Legal Question in Wills and Trusts in North Carolina

I do not know what the woman owns or where she resides. Assuming it is North Carolina, then if the insurance was not enough to cover hospital bills, bills that were incurred in the last 12 months of her life would be a claim against her estate, whatever that is. If she has significant assets (car, land, money in the bank), it would depend on how many other claims were of a higher priority, if there was not enough money or assets. If there is enough money, then all claims are paid. The sister then gets whatever is left, plus any personal property.

I do not know her situation so I do not know whether it makes sense to just deed any real property over now. By deeding it, the woman would be making a gift which would cause the woman to pay gift tax. She would need to speak with a CPA or tax professional about gift tax consequences. Perhaps it will not be an issue, but it depends on the size of her estate. The gift tax rate is at 35%.

Does the woman have an estate plan? If not, she needs one before she just gives away her assets. She needs to discuss this with an attorney and make a will or trust as appropriate.