Recent studies have shown that only a little more than half of all Americans have a Will or Trust document in place to direct their estate after they pass away, and that the vast majority of those documents have not been updated in the last five years. Even worse, it’s been reported that most adult children are unaware if their parents even have an estate plan and would be unable to find estate planning documents, if they did indeed exist. These can lead to serious troubles down the line and are among some of the top mistakes people make regarding their estate plans. Marietta estate planning lawyers have compiled this list of additional estate planning mistakes that you should be aware of, and hopefully avoid:
In a perfect world, there would be no sibling rivalry – both before and after the death of parents. However, it’s just a fact of life that families don’t always get along, and that could not be more painful or true than when a parent passes and disputes arise about the inheritance. A lot of times this is caused by unequal distributions amongst siblings. Marietta Georgia estate planning attorneys often advise their clients to have a conversation with their future beneficiaries in advance about why they are – or are not – leaving them certain assets or valuables in their estate. If the parent is uncomfortable having this type conversation, a letter written to each beneficiary to be read upon the parent’s passing can serve the same purpose.
Marietta GA estate planning attorneys often see this issue come up with estates that do not leave enough revenue to pay estate taxes, forcing the beneficiaries to sell property such as homes or other assets just to pay off estate tax debt. Careful planning with an estate planning lawyer can help you avoid these kinds of issues, and makes it worthwhile for you to meet with your estate planning attorney on a regular basis to learn about changes in the estate tax law for your financial situation so that you can update your estate plan accordingly.
Out-of-Date Estate Plan
Unexpected changes happen in life, such as a falling out with a family member, a divorce, or a new marriage. However, legal issues arise when these changes are not accounted for in your legal documents. For example, if you were to disinherit a child but not change your Last Will and Testament to reflect this – well, that child won’t technically be disinherited. You can also flip that around and have a situation where you and your child have reconnected after a falling out, but if you never added that child back into your estate plan, they may not receive that inheritance you decided to give them after all. Divorce and marriage can also wreak havoc on out-of-date estate plans, so it is important that you speak to an estate planning attorney after any major life events.
If you have questions about creating an estate plan or you would like to speak with one of our attorneys about reviewing your existing plan to ensure it still meets your needs, please contact us at 770-425-6060 to set up Georgia Family Treasures Discovery Session.
Estate planning lawyers in Marietta are most often considered by folks who are wanting to put their end-of-life affairs in order. The lawyer helps them to draw up important documents such as powers of attorney and medical directives, as well as to develop a plan for how an individual’s property will be distributed upon his or her death. Wills, trusts, executors; these are all typical topics that a Marietta estate planning lawyer will discuss with clients.
There is also a need to protect one’s assets during his or her lifetime. Not only is this important to the quality of life, but it also helps ensure that there is property that can be left behind! Asset protection is about choosing the best strategies to minimize the potential negative consequences of liability. That includes protection from claims made against and individual, as well as claims against your assets. The former would include things such as property damage or physical harm to another that was caused by you. The latter would have to do with damage caused by something you own, such as a business or property.
Commonly, if a claim is made against an individual or their property, just about everything that person owns can be put at risk. For example, a judgment against you in a court of law can give creditors the ability to go after your assets in order to be compensated for damages. It can be an unpleasant eye-opening experience for a small business owner to discover that because someone was injured in their place of business, creditors may be able to take away personal assets that have nothing to do with the business itself. If someone slips and falls in your restaurant, as the owner, you could lose your home.
While estate planning focuses pretty heavily on wills and trusts to distribute assets after death, there are advantages to utilizing these tools during an individual’s lifetime, too. A trust can be especially helpful in keeping a person’s assets out of harm’s way, which is why working with a Marietta estate planning lawyers is such an important part of a solid asset protection strategy.
Using a trust for asset protection doesn’t come without its limitations, though.
- In order to shield the assets from creditors, an estate planning lawyer will likely include a “spendthrift provision” in your documents. However, a spendthrift provision cannot be used with a revocable living trust.
- The trust must be for the benefit of the beneficiaries, rather than the person setting it up.
- Beneficiaries cannot be involved in the management of the trust and cannot make any changes to its terms.
There are other advantages and limitations to using a trust for asset protection during life, and a good Marietta estate planning lawyer will be able to work with clients to determine whether it is a useful strategy based on each individual’s needs. Call us to discuss your needs at 770-425-6060.
Contrary to what some believe, Marietta GA estate planning attorneys aren’t here just for the wealthiest members of our community. In fact, after years of experience we come to see how nearly every person in Marietta can benefit from putting together an estate plan, including a will. While you may not feel that you have a lot of assets to protect or believe that your family knows your wishes and will follow them, here are some points to ponder in determining if perhaps you really should hire a Marietta estate planning attorney after all.
Make Your Estate More Valuable
The idea of making an estate more valuable should actually be pretty important to those who don’t consider themselves to be “wealthy.” With the help of a good estate planning lawyer, you can work toward a more comfortable future, as well as to maximize the assets that you do have. With a retirement plan, life insurance, and other planning tools, things can start to look a lot different than you expected. Not only that, but you’ll also be able to leave an inheritance behind for your loved ones.
Protect Your Privacy (and Your Family’s)
When working with an estate planning attorney in Marietta, you will want to look at the possibility of setting up some sort of trust. Again, these types of legal tools are NOT just for the rich or well-to-do. There are many, many advantages to having a trust, but one of those that resonates with a lot of folks in Marietta is the fact that assets placed into a trust do not necessarily have to go through the very public probate process. This affords way more privacy regarding your estate, what you’ve left behind, and other details that you’d prefer to keep private.
Name Guardians for Your Children
No matter how much money you’ve got in the bank or elsewhere, if you have minor children, there is no question that you need to hire an estate planning attorney to draw up guardianship and other important documents. If you become incapacitated or pass away without these incredibly important papers legally filed, then you are basically giving the court system carte blanch to determine what happens to your children. They make these decisions based on certain legal precedents, and there is a dangerously high chance that the guardian chosen for your children under 18 will NOT be the person you would have chosen. This should be enough to send pretty much every parent in Marietta running to a good estate planning attorney!
Do It While You Can
It’s not uncommon for Marietta residents to want to put off estate planning until they absolutely have to think about it. The problem that they and their estate planning attorney run into, however, is that you can wait too long. When putting together a will or other estate planning documents, the court needs to be satisfied that you are of sound mind and body. If you’ve recently found out you’re gravely ill or are losing cognitive function, an estate plan can be rendered invalid on those grounds.
The bottom line is that nearly everyone in Marietta would end up in a better position by working with an estate planning attorney. From professional retirement planning to naming guardians to protecting your own privacy and more, if you haven’t yet started the process, now is definitely the time to call us at 770-425-6060.
Wrap up 2016 with five smart estate planning moves that will help you protect your assets, your family and start 2017 off on a solid foundation.
Have you experienced a notable life or financial change in 2016 such as the purchase or sale of real estate, the birth of a child, marriage, divorce or retirement? It may be time to revisit your estate planning goals and legal documents before year’s end.
After tax and financial planning, estate planning is one of the most overlooked areas of personal finance. Of course, it’s not always pleasant to think about your eventual death or incapacity, but taking care of your “legal business” each and every year is critical to ensuring your wishes, assets and family are protected, if something happens.
That’s why I am encouraging every adult to take some time this month to review any planning they may already have in place to make sure it still reflects their wishes and provides the proper protection for assets and loved ones. In addition, implementing the five following year-end moves is a great way to ensure that you are starting off 2016 with a rock-solid legal foundation in place.
- Update beneficiary designations- It’s not uncommon for beneficiary designations on your IRA, 401(k), life insurance policies, or retirement plans to go unchanged for years, or even decades. But beware: this is the most common reason an inheritance can be “accidentally” left to an ex-spouse or someone you no longer want to inherit from you. It is well worth the time to make a quick call to your Human Resources department or insurance agent to double-check beneficiary designations and make changes accordingly.
- Reduce the value of your estate with a gift- In 2016, you can give away up to $14,000 to as many people as you want, tax-free. This is in addition to 2016’s lifetime gift-tax exemption of $5.45 million dollars. For those looking to reduce the value of their estate for tax purposes, cash gifts over the holidays often make for a very wise and very merry estate planning move.
- Revisit your will or trust- Having a will or trust is about so much more than who gets your “stuff” after you die. Instead, you should think of your documents as vehicles that will help make life as easy as possible for your loved ones in the event of your death, disability or incapacity. You are doing the people you love a huge favor by keeping such documents valid and up-to-date, so be sure to review your will and trust for any mistakes, errors or changes you want at year-end. If you have minor kids, you should also use your will or trust to document who you want to raise them if something happens to mom or dad.
- “Refresh” your Powers of Attorney and Healthcare Directives- Like bread, legal documents can actually go “stale” after a number of years. This is especially true of documents such as Powers of Attorney and Healthcare Directives that can “expire” and be rejected by banks, hospitals or other financial institutions in as little as 12 months. It’s a good idea to get into the habit of contacting your lawyer every December or January to refresh any documents that may now be out of date.
- Talk with Loved Ones About Long-Term Care- Accidents and illness are unpredictable and nursing home or assisted living can cost in upwards of $8,000-$12,000 per month. Medicare does not cover most long-term care costs, and Medicaid is need-based, unless you plan ahead. Whether you want to stay at home for as long as possible if you get sick or you want to ensure you are never a burden to your family, it’s a good idea to proactively have conversations about long-term care with your loved ones and financial professionals so that you have a rough plan in place to more easily access and pay for any care you may need.
Let This Be the Year You Take Action!
Estate planning is an easy task to check off your “to-do” list, alongside last minute tax and financial moves before year’s end. It’s a great idea to set aside some time to review all of your documents and policies, make updates, and, if necessary, meet with an East Cobb estate planning attorney for the peace of mind of knowing that your legal ducks will be in a row before the New Year begins (or just after; get that resolution crossed off your list!). Call us at 770-425-6060 to get started.
It’s Christmas time and as an East Cobb Wills Lawyer, I look for fun ways to relate legal concepts in popular media. The novelty Christmas song, “Grandma Got Run Over by a Reindeer,” written by Randy Brooks and first recorded by Elmo and Patsy in 1979, is about a grandmother who gets intoxicated on Christmas Eve from drinking too much eggnog at a family gathering. To complicate matters she has forgotten to take her medication and she ignores warnings from her family. As a result, she staggers outside into a snowstorm. On her way home, she is allegedly trampled by Santa Claus’s reindeer-pulled sleigh. At the next day’s Christmas “festivities,” instead of celebrating the holiday, “all the family’s dressed in black.” Grandpa acts as if nothing has happened, and is drinking beer, watching football and playing “cards with cousin Mel.” The song suggests that Santa, “a man who drives a sleigh and plays with elves,”is unfit to drive and that the listening public should be wary of him, as a menace to society.
Since I’m an Estate Planning lawyer, I can’t just leave it there. I wonder about Grandma’s estate. (Yes, I do that sort of thing.)
Imagine Grandma survived the attack but was still seriously injured. After the collision, she is unconscious and unresponsive. Her doctor declares her legally incompetent. What happens to Grandma and her stuff depends on what estate planning Grandma and Grandpa have put into place.
First, assume that, like two out of three of us, Grandma and Grandpa have NOT done proper estate planning. When Grandma is admitted to the hospital, since she does not have an Advance Directive for Health Care, she has no control over who will make health care decisions for her now that she can’t communicate her wishes. Under Georgia’s Medical Consent Law, the next of kin can consent if the patient is unable to do so. The spouse is the first option for a patient who is married. So it’s all up to Grandpa. Yep, he’ll get around to deciding that right after the next round of cards.
For another scenario, let’s assume Grandma makes it, but her care is getting expensive. She and Grandpa had maintained separate bank accounts all these years. Grandma’s pension is in her account and all of the household bills are in her name. Grandpa will have to go through a lengthy, public and costly court process to be appointed as Grandma’s guardian and conservator to access Grandma’s pension to pay hospital and household expenses. He will most likely have to post a bond to make sure he doesn’t mishandle Grandma’s money. This process will take several weeks and will cost several thousand dollars. Considering Grandpa’s greater interest in drinking beer and playing cards, it will probably be a hefty bond.
Now, let’s look several months down the road from the horrific attack. Sadly, Grandma does not make it, and finally, “all the family’s dressed in black.” So NOW what happens to Grandma’s property?
Sadly, Grandma did not have a Last Will and Testament. Are you surprised? Georgia’s laws of intestate succession provide the default or “do nothing” plan. It is a one-size fits all Will (sort of like Grandpa’s overalls) that says Grandma’s estate will be split between Grandpa and her unnamed children. Let’s assume Grandma and Grandpa had two children, Elmo and Patsy. Grandpa receives the same size share as each child (but not less than one third) and Elmo and Patsy will also receive one third each. Don’t worry about old Cousin Mel getting anything: before she would become an heir, Grandma’s spouse, children, and all grandchildren, parents and siblings would have had to have predeceased her before Mel, a cousin, receives anything. Okay, so maybe Mel will get the playing cards.
Just like the guardianship and conservatorship, this matter will be handled in the probate court, and is likewise a public, time-consuming, and costly process. Not the smartest of options, but not an unlikely result, considering this silly family.
Let’s look at a more controlled and alternative outcome to the tragic situation now. This time, because she was thinking ahead, Grandma had signed an Advance Directive for Health Care naming Sister Sally as her health care agent. Since Grandma is now unable to communicate her wishes, Sally can make her health care decisions for her. She can admit Grandma to the hospital and request, consent to treatment or withdraw treatment. (And, unlike Grandpa, Sister Sally won’t hesitate!)
this time Grandma also has a durable power of attorney and a revocable living trust, so when she became incapacitated, Sister Sally is able to immediately act on her behalf to handle her finances as her agent or “attorney in fact.” This works out better for Grandpa, too. Instead of having to file for guardianship and conservatorship over Grandma, he could keep his scheduled card games with the guys. Sally becomes the successor Trustee and gained access to Grandma’s money with minimal time and expense and it was all handled privately.
Grandma’s living trust was fully funded (meaning the title of all of her accounts and property were transferred to it), so when she ultimately passed on, her family did not have to go through the several months of delays and costs of a public probate process (several thousand dollars more), but instead was able to have immediate access to the money and property. Sally took a modest fee allotted by Grandma for her efforts as trustee and transferred funds to Grandpa as he needed them.
So the next Christmas, the goose was on the table, as was the pudding made of fig. As the blue and silver candle that matched the hair in Grandma’s wig flickered, everyone remembered Grandma fondly, as they all waited for the jury award in Grandma’s lawsuit against Santa.
And they all lived happily ever after.
(Adapted from a prior post co-written by Steve Worrall and Shelia Manely, originally posted here)
If you have a properly executed will or trust in place, good for you! You’ve taken a great step toward protecting your assets for future generations. But, establishing an estate plan is only the first step. You still need to make sure that your plan will stay rock solid by keeping it up to date.
With each life change you will need to adjust your estate plan accordingly. If you experience changes to your career, health, residence, family or even tax status, your estate plan can be derailed. In some cases, a change could create new opportunities that can help you increase your net worth.
As Marietta estate attorneys, we don’t want you to spend an unreasonable amount of time continually reviewing your estate plan. A quick and easy way to determine whether you need to update your will or trust is to simply put your plan through the following “stress test.”
- Have there been any “big events” since your last updated your plan? – Most “big events” are related to your family; divorce, a new baby, a death. But a big event could also be business related and sometimes it’s not really big at all. For example, you may simply change your mind about the legacy you want to leave. If any of these have taken place in your life, consider it a trigger to look at your estate plan.
- Who is your named executor or trustee? – If you were to write a new estate plan today would you keep the same executor or trustee? If not, it’s time to update that plan.
- Have you reviewed your insurance plan? – Check your policy to see who you named as beneficiary and update that as needed.
- Have you entered into a joint property agreement with someone other than a spouse? – It’s not just property you own outright that should be in your estate plan. You should also include any property you jointly own with someone else.
- How is your record keeping? – It is important to stay organized so that your executor or trustee has a clear understanding of everything in your plan. If it’s been a while since you’ve reviewed and reorganized your records, do so now!
- Has it been 5 years or more since you looked over your plan?- Even if nothing in your life has changed, it is important to at least review your plan with an experienced Marietta estate planning attorney every five years because estate planning laws and rules are constantly shifting. Your Marietta attorney may be able to save your beneficiaries some trouble after your passing. Or, it is possible that you may be missing out on a benefit you didn’t even know existed. Just make it a rule of thumb to calendar a plan review every 3-5 years to be safe.
Getting your estate plan done is a great way to protect your wealth and everyone you love. But, consider it a living organism that could shift and change over time. Give your plan regular stress tests and then call our Marietta estate lawyers at 770-425-6060 and make an appointment the moment you suspect changes are needed.