Frequently Asked Questions About Estate Planning & Probate Law
What Is a Will?
A will is an instrument by which you declare who is to receive your real and personal property after your death. In Georgia, a will must be in writing and signed by you, the testator, and attested by two witnesses. You may also name a guardian for your minor children in your will, set up a trust for your children within your will, name a trustee to administer the trust for your children, and select an executor to settle your estate.
What Happens If I Die Without a Will?
If you die without a will in Georgia, your assets may not be distributed according to your wishes. For instance, if you are married with children, your assets will be distributed to your spouse AND your children, not just your spouse. Further, your children would have full access to their portion of the property once they are 18 years old. Additionally, if you are unmarried without children, your estate is distributed to your parents, if living, and if not, to your siblings and their descendants. The formula then continues to more remote relatives along your blood line.
Why Do I Need a Will?
In addition to designating whom receives your assets after your death, you may also name a guardian for your minor children in your will, set up a trust for your children within your will, name a trustee to administer the trust for your children, and select an executor to settle your estate. If you have a taxable estate, you may be able to avoid or minimize the estate tax by having a proper, well-planned will. Having a will saves your family time and money. The probate process is more difficult, time-consuming, and expensive if you die without a will.
Will My Estate Be Subject to the Estate Tax?
Because tax laws change so frequently, it is difficult to say if your estate will be subject to the Estate Tax. You should discuss your particular situation in detail with one of our attorneys to determine whether advanced estate planning is required in your situation.
As a general rule, there is an unlimited marital deduction for transfers of wealth between spouses, so if you leave everything in your will to your spouse, your estate will not owe an estate tax. However, the marital deduction only defers the tax; upon the surviving spouse’s death, the estate is subject to the estate tax.
You may be able to avoid or minimize the estate tax by properly planning. There are many saving techniques which may be utilized in your will and other estate planning documents.
What Is an Executor?
The person designated in your will to carry out the directions in your will. The executor will submit your will to probate, oversee the payment of debts and taxes of your estate, and distribute your estate as specified in your will.
What Is a Trustee?
A person holding legal title to property “in trust” for the benefit of the beneficiary of the trust who must carry out the duties specified in the trust document which respect to the property in the trust; i.e., the person you designate in your will or trust document to hold and administer property for your beneficiaries.
What Is a Trust?
Generally, a trust is a legal entity created by a grantor (a transferor of property) whereby the grantor transfers certain property to a trustee to administer for the benefit of designated beneficiaries. It is an arrangement whereby a person transfers property with the intention that it be managed by a trustee for another person’s benefit.
There are many types of trusts, but the ones you hear about most often are living trusts and testamentary trusts . A living trust is created to be administered during your lifetime, and a testamentary trust is created under the terms of your will to be administered after your death. People will create trusts in their wills to be administered for their spouse and/or children after their death, so that the spouse and/or children do not have full unfettered access to the money or to avoid estate tax as much as possible. Oftentimes, people create living trusts to avoid probate.
Do I Need a Living Trust?
Generally, the answer is no. Oftentimes, the general perception among people that trusts are absolutely necessary to avoid probate are flawed. Probate is a stream-lined and inexpensive prospect in Georgia if you have a valid will and there are no major conflicts within your family. Further, depending on the type of trust, you may not be shielded from estate taxes and creditors.
However, you may need a trust if your assets must absolutely be kept private, you seek to avoid family conflicts after your death, you desire to transfer some of your property to avoid estate taxes, you have real estate in another state and wish to avoid ancillary probate in that state (which can be very expensive and difficult), or you wish to utilize a trust to hold life insurance, which can be a significant part of your estate, to avoid estate taxes. A trust can also provide for the management of your property in the event you are incapacitated in a much more detailed fashion than through a Revocable Financial Power of Attorney.
Do I Need a Living Will or Durable Power of Attorney for Healthcare?
Beginning on July 1, 2007, the Georgia Advance Directive for Healthcare replaced the Georgia laws regarding Living Wills and the Durable Powers of Attorney for Healthcare. This document combines the characteristics of both of its predecessors and allows people to choose the medical care they want when they are no longer able to communicate with doctors or family. Those persons who already had Living Wills or Durable Powers of Attorney for Healthcare are allowed to keep them and they are still legally binding until they are revoked. The Durable Power of Attorney for Healthcare was repealed or removed from the law and the Living Will law was completely rewritten and replaced.
What Is a Revocable Financial Power of Attorney?
This document allows you to appoint someone to act on your behalf to handle your assets when you cannot. If you become mentally or physically disabled, your agent would be able to access your bank accounts, retirement benefits, autos, home, etc. in order to handle your financial affairs. If you do not sign a Revocable Financial Power of Attorney and you do become incapacitated, the probate court would need to appoint a guardian of your property which can be burdensome and expensive. It can also be used if you are out of town for a long period of time or in emergency situations. This document may be revoked at any time. One word of caution is in order. A Revocable Financial Power of Attorney is subject to abuse. Accordingly, you must have the utmost confidence in the person named in your Revocable Financial Power of Attorney.