Everyone’s life is important and has meaning. One of the ways we validate our accomplishments is by passing that on to our children and loved ones as we see fit. Estate planning encompasses an appropriate document spelling out your bequests and devises, along with any specific property we want to leave to specific individuals. To leave these questions up to any family member, or worse yet the State, is a losing proposition. It is important that your family follow your wishes with your money and assets, and the best way to be certain that occurs is through your Will or Trust.
An estate plan is where wealth begins. Most work all their lives and never get a boost from an estate, an inheritance, or a substantial gift. Many are out there on their own, both figuratively and literally. Time after time, however, wealthy individuals have received a jumpstart through inheritance. An estate plan gives your family the chance at this step up to true wealth.
Deep down in our hearts, we know that the gift of an estate plan is a gift to ourselves. We want to be able to determine how our children are taken care of should the worst happen. And, we want to be sure that any children that can’t handle an inheritance has a Trustee that will take care of dispensing those funds. All of this gives the gift that cannot be purchased: peace of mind.
Who needs to know? The individuals you appoint as your Personal Representatives of your estate need to know the basics of your estate plan. We’ve all seen television dramas where a Will was “read” following the passing of a wealthy loved one; however, the best estate plans are those that are settled well in advance of death of the benefactor. All parties should know where they stand prior to your death, and all parties responsible for the probate and maintenance of your estate should know the location of your estate planning documents. All originals you signed or returned to you for safekeeping. Copies are kept in our office; however, the attempted probate of a copy is problematic. It is always best to keep these sacred documents in the safest place you can secure, and at least two people need to know the location and have copies of the originals.
What can you do with the trust you cannot do with a Will? A Trust is a document that transcends the death of the maker. It does not require probate, and the terms of the Trust continue according to the Trust itself. Death of the maker and other beneficiaries do not change the status of the Trust. That is, unless the Trust itself calls for a status change. On the other hand, a Will must be proven (or “probated”) upon the death of the maker. It cannot be indefinitely binding on future generations because of this fact. If you are looking for an article on this comparison, try https://www.suzeorman.com/blog/The-Difference-Between-a-Will-and-a-Trust.
There are three elements that typically drive individuals to choose a trust. These are time, cost, and privacy. Generally, it takes six months to a year to probate a Will. Cost sometimes is prohibitive, depending upon your state. In Georgia the cost to probate a will is relatively low; however, the costs do add up. What if you need to hire attorney to assist you with probate? And if the Will is contested, those costs can result in a very expensive process. A Will is also a public record. We are all concerned about scams, fraud, and unwanted salespeople. Unfortunately, there is an entire industry that preys upon those named in a Will. It is the need for privacy, and all it entails that drives most people to a Trust.
Wills are less expensive than a Trust at the time they are drafted. Over time, a Will may will become more expensive than a Trust. Once a Trust is drafted, the cost of maintenance are very low. Once a Will is drafted, and maker is deceased, other costs come to light. These include but are not limited to, court costs, probate cost, advertising costs, attorney’s fees, and possible pleadings. Yes, a Trust is more expensive at the time it is drafted, but as you see, it becomes a better value over time. More information can be found here https://www.policygenius.com/retirement/living-trust-vs-will/.
Tax planning considerations: First, check and rely only upon your CPA. Trusts can be tailored to avoid taxes. Currently, estate and gift taxes do not apply for individuals until $11.58 million of assets have been transferred. That is a point that remains unreached for all but the wealthiest individuals in our country. That said, a Will is not tailored for tax planning, where a trust can be tailored and amended to make provision for tax consequences after creation. Check with your CPA for specific advice, and Adair & Baker, LLC, will never render tax advice. Here is also a link to the IRS website regarding estate taxes https://www.irs.gov/businesses/small-businesses-self-employed/estate-tax.
How Is A Will Created? A Georgia Will is created by the writing of one’s voluntary wishes, of a competent person 14 years of age or older, which is signed in the presence of two witnesses. That is all that must happen for a Will to be valid. Additionally, an affidavit is attached, which states under oath that the witnesses were signing in the presence of the one making the Will, and in the presence of a Notary Public. This is called a “self- proving affidavit”, which releases the witnesses from appearing in court for the Will to be probated. Here is an article that reviews these points https://www.dcolemanlaw.com/legal-requrements-georgia-will/.
We have a Will form on our website. This allows you to fill in the blanks, and hit “submit”. The form is then sent to us via encrypted email. We take the information you give us and we prepare your draft well for review. It is a simple process!
How is a Trust created? A Trust in Georgia is created by written documentation of your intent to place property into the ownership of a Trustee, to be used throughout your lifetime and for generations to come. It must be signed in the presence of two witnesses. Of course, you must appoint a “trustee” or “trustees” to administer the terms of the trust, see https://en.wikipedia.org/wiki/Trust_law.
Some Trust attempts are fatally flawed. It is routine to see Trusts that are not funded. Funding a trust means merely placing property, and titling some property, in the name of the Trustee in that capacity, and thus transfer the property into the Trust. If you create the document, but do not place any property into the trust, the trust essentially does not exist.
We have created a fillable questionnaire on our site for creation of the trust document. Fill in the information, hit “submit”, in the information will be routed to us. We will draft the trust document for your review. It is indeed a simple process!
Do you really need an Advance Directive? The Advance Directive may prove to be the most important document in your estate plan. The peace of mind that your loved ones will enjoy resulting from the knowledge of your last wishes is a gift of love. http://www.patientsrightscouncil.org/site/do-you-need-an-advance-directive/
What is the function of an Advance Directive? Advance Directives in Georgia inform healthcare providers of your wishes for your last days. Also, they appoint an individual or individuals of your choosing to make healthcare decisions on your behalf should you become incapacitated.
What is a Living Will? Under prior Georgia law, there was a document known as a “living will” which relayed your wishes for your last days. Also, there was a separate document styled a “health care power of attorney” which appointed those you wish to make healthcare decisions on your behalf. Those documents have now been merged into the new “Advance Directive”.
Is it specific? A well drafted Advance Directive will allow you to clearly state the point at which life-sustaining measures should be withheld from you. Also, it will detail the parameters and boundaries of the individuals making healthcare decisions on your behalf.
Do the Advance Directive forms vary? In Georgia, it is a statutory document. This means Georgia law specifies a format these documents should follow. Although not required to follow the exact form, one should have an advance directive that covers the areas that are delineated by the Georgia statute. This is the general format, https://www.piedmont.org/media/file/Georgia-Advance-Directive.pdf
What is a Financial Power of Attorney? The final document to round out the three pillars of a sound estate plan is a General Financial Power of Attorney (in addition to the will or trust, and advance directive). This is also a statutory form which is been adopted by most states throughout the country.
Is it limited? A General Financial Power of Attorney allows you to specifically state what financial powers you would like to grant to the attorney in fact should you become incapacitated. This is a big plus because financial institutions will require this document to allow your loved ones to carry on your financial business while you are incapacitated.
There are numerous choices for the powers that will be granted, and powers that will be specifically excluded. Consulting with your attorney on this form is of upmost importance. Obviously, granting a power you do not wish the wrong individual to possess, can lead to dire consequences for your estate. We recommend you grant enough power to carry on your business, without jeopardizing any estate planning documentation. A great article that lays it out for you is from Georgia Legal Aid, https://www.georgialegalaid.org/resource/the-facts-about-financial-powers-of-attorney.
How is it created? A General Financial Power of Attorney is signed in the presence of a single witness and a notary public. It is recognized from state to state; therefore, having this in your possession is important should you be traveling. Any estate planning attorney worth their salt will recommend the General Financial Power of Attorney in addition to the Will or Trust, and Advance Directive. We have made it easy to complete the fillable form and submit to us via encrypted email, and a draft will be prepared for your review. It is a simple process!