TOP FIVE (5) REASONS TO UTILIZE ESTATE PLANNING

1) To determine exactly who receives your assets and to ease the burden of paperwork on your family in transferring your assets. Many assets, such as real property (a home), can be planned for now, quite simply (less than $100) and provide a seamless transition of your assets upon your death. A Last Will & Testament makes things immensely easier for your loved ones because it will relieve them from filing bonds and inventories and give them all the powers available under Georgia law.

2) To provide a guardian/trustee for your minor children (the person(s) who will raise your children if you and your spouse are deceased in a common accident). The appointed Guardian assumes the daily parental responsibilities in raising your child. The appointed Trustee controls your child’s money – the purse strings. The Guardian and Trustee are often the same person, but they do not have to be the same person. The Trustee holds the money until your child turns 18 (or some other age you set). Before your child turns the set age, money can be disbursed by the Trustee for your child’s education, medical expenses, a car, anything the Trustee believes is reasonable and appropriate.

This is especially important if you should have a special needs child who receives benefits. If there is a concern that giving your special needs child property under the Will could hurt their benefits, you may give them property under your Last Will & Testament and leave it in a Trust so it does not jeopardize any benefits your child is receiving.

3) To protect your assets if you dislike your son-in-law or daughter-in-law. You can (and most of my clients do) draft their Will so that upon their death, their assets go to their child (often a married adult) and if their child is deceased, the assets go to the grandchild or grandchildren – NOT your son-in-law or daughter-in-law. This is a perfectly reasonable approach because otherwise there is nothing preventing your son-in-law or daughter-in-law from receiving your assets and using them for a new boyfriend or girlfriend rather than your grandkids.

4) To protect certain assets if you are in a second marriage with a blended family. It is very common today to have a husband and wife on their second marriage where each spouse brings children from a prior marriage to the family. Often, the spouses want to ensure that only their biological children receive their assets or receive a greater share of their assets. Proper drafting of your Last Will & Testament can ensure that your assets go only to your biological children, if that is what you desire.

5) To tax plan and ensure your family, not the government, receives the benefits of your many years of hard work. On December 17, 2010, President Obama signed the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010. Section 301 of the Act reinstates the federal estate tax and sets the exemption at $5 million per person and a top tax rate of 35%.

If you are curious, Georgia does not have an estate tax. It was repealed on January 1, 2005. Currently, 32 states have estate taxes, but Georgia is not one of them.

TOP FIVE (5) MISCONCEPTIONS ABOUT ESTATE PLANNING

1) If two names are on a deed of real property, the persons own it as joint tenants and upon the death of one, title will easily and automatically pass to the other. FALSE. It is very important to know how your real estate is titled – it is either Joint Tenants With Right of Survivorship or Tenants in Common. Just because two names are on the deed does not mean the deed is “joint tenants.” The deed must actually say “joint tenants”, “joint tenancy” or “joint tenants with right of survivorship.” If your deed is not titled as you desire, this problem can be corrected for less than $100 by drafting and filing a new deed with the Court.

2) You don’t need estate planning, because you don’t really have anything of great value. FALSE. The biggest fights I have witnessed are over the smallest items – things such as mother’s biscuit bowl or a school bell that mama used to ring at dinner time. These items are not worth $10.00, but they are the cause of lengthy hearings and mediations. You can prevent the fighting and litigation by drafting a Last Will & Testament.

3) You have to be fair. FALSE. For example, evenly distributing your assets amount all of your children or naming your oldest child as Executor. Your money and assets are yours. You worked for it and you can do whatever you wish with it. Often, one child may have stayed close to you and assisted you on a regular basis with doctor visits, home repairs, grocery shopping, bills, etc. You may wish to leave that child a greater share of your estate than your other children. In addition, sometimes your child or their spouse has an addiction issue that renders them unable to adequately manage money. You may wish to leave them a smaller share of your estate or to leave their share in the control of someone else. These are all perfectly appropriate and reasonable ways to divide your estate.

(4) Estate planning is too complicated. FALSE. The cost of a standard Last Will & Testament ($300.00) is no more than the cost of a few months of cable TV. When you probate the Last Will & Testament, the forms to do so are fill-in-the-blank and available on-line. Estate planning actually avoids most complications that arise upon the passing of a loved one.

(5) Having a Power of Attorney is enough. FALSE.
Powers of Attorney ONLY control when you are alive – they are not effective upon your death. That is when the need for a Last Will & Testament arises.