Estate planning is something that everyone should plan to do. If you haven't started yet, that's fine. There is time to do it now, and you can build on your initial plan over time.
People in Georgia and across the United States following the spread of COVID-19 across the country might be wondering how the illness could potentially affect their family. As the financial markets fluctuate, estate planning details might change.
Georgia residents and others may be able to derive many benefits from creating a trust. Perhaps the most important benefit is the fact that assets held in a trust are typically not subject to probate. In addition to saving time and money, avoiding probate means that information about a person's finances are not revealed to the public. In many cases, assets that are held in a trust cannot be seized by creditors or taken in a divorce settlement.
Some entrepreneurs and business owners in Georgia have worked hard to amass significant estates over time. They may want to protect these assets and pass them on to future generations without losing a significant amount to estate taxes.
When an individual in Georgia passes, he or she may decide to leave assets to children, grandchildren or other family members. However, even when armed with a set of instructions, it can still be difficult to allocate tangible assets without causing conflict. Fortunately, there are steps that can be taken to minimize conflict while respecting the deceased individual's wishes. The first step is to determine if more than one person wants a certain item.
A recent court decision regarding a mistake made in preparing a will has demonstrated the dangers of DIY estate planning for Georgia residents. Those who are tempted to try to handle their own estate planning out of a desire to save money on a lawyer must be prepared to bear the consequences if something goes wrong.
Wealth preservation for families in Georgia often revolves around the problem of limiting estate taxes. When an estate's assets exceed the exemption level, then as much as 40% of the estate's value might be owed to the government in taxes. Historically, the exemption level has fluctuated quite a bit. Years ago, an estate's value beyond $600,000 was exposed to taxation. The exemption has risen dramatically in recent years with tax law now granting individuals an exemption up to $11 million as of 2020. In 2026, however, tax law will drop the exemption to $5 million.
Having an estate plan is important for all adults. However, what is needed as part of that plan could vary throughout a person's life. A student or recent college graduate in Georgia might only need durable powers of attorney for health care and finance as well as a simple will. The powers of attorney appoint people to make decisions about an individual's health and manage the person's finances if the estate owner is unable to do so. For a young adult, this might be the parents.
When people in Georgia prepare an estate plan, they may have some assets that are passed by beneficiary designation or another method does not involve a will or the probate process. Retirement accounts, life insurance policies and trusts all pass by beneficiary designation. Other types of property, such as a home or a bank account, might be held by two individuals. This could mean that each person has joint ownership with rights of survivorship, meaning that the asset passes to the surviving person when the other person dies.
It isn't uncommon for Georgia residents to name successor trustees. When an individual either dies or becomes incapacitated, the successor trustee may be called upon to administer the trust. A successor trustee may need to obtain a letter from a physician that proves a living person is no longer able to manage his or her affairs. If the settlor has died, the new trustee will need to obtain a death certificate before assuming authority over the trust.