One day William’s daughter read in an article that a will was not the best way to leave property to heirs. Wills often involve long and expensive court proceedings and there are other, more efficient ways to pass on savings to family. But William was a person who knew his own mind, and he felt sure that a simple will would be good enough for him.
A will without court approval is nothing more than the paper it’s written on. Wills, by themselves, are not enough to prevent property from staying “stuck” in a decedent’s name. The only way a will could be effective, to give William’s daughter the inheritance he wanted her to have, was for his daughter to go to court after he passed. Courts make sure that wills are valid, debts are paid, and – despite whatever the will may say – whether other family members might also have a legal right to a portion of the estate. Worse, because probate court files are public record, anybody off the street could have open access to all documents filed there, including wills.
So when William’s daughter filed in probate court after he died, she soon found herself besieged by get-rich-quick con artists. William’s estranged second wife’s children showed up to demand a piece of his estate. When a small loan William owed on his house was discovered, a property broker flagged the house for foreclosure and the daughter’s lawyer had to move fast to keep the house off the auction block.
It took over three years to resolve these complications. Even simple probate matters can end up costing between two and eight percent of the total estate value. William’s daughter had to pay around $30,000.00 in court costs, attorneys’ fees, and accounting expenses. She then had a minor traffic accident. Even though nobody was hurt, the other driver sued her and she eventually spent a significant chunk of the rest of her inheritance on attorneys’ fees and court charges.
If only William had heeded his daughter’s advice, these difficulties could have been avoided or minimized. Here is what an experienced Marietta estate planning attorney could have recommended instead.
Making his bank account “POD.” William kept a modest sum in a savings account. He could have left that money to his daughter using a “payable on death” (POD) designation, simply naming his daughter as owner of his account on his passing. Then all his daughter would have to do would be to present William’s death certificate and proper identification, and the bank would pay over the funds to her. No fees, no fuss, no exposure.
Deeding his house. There are several inexpensive and effective options to use deeds to transfer ownership of real estate automatically, without the need for probate. An attorney would know which kind of deed would have suited William best.
Protecting the inheritance. William had several antique cars worth around $50,000.00. An attorney could have created a trust for William, transferred ownership of the cars into the trust, and named his daughter as trustee. As long as the trust was carefully drafted, the money those cars could fetch might have been protected from the accident litigation.
Small-estate proceedings. William’s estate was too large to benefit, but, for smaller holdings, most if not all states permit shortened and simplified proceedings that avoid the costs and delay of full-blown probate proceedings. These go by various names, including “small-estate” or “voluntary-administration,” or “summary-administration” proceedings. As long as an estate is worth less than the upper limit set by law, property can be distributed without the court supervision that probate proceedings otherwise require. The limit varies depending on the state, generally between $30,000.00 and $100,000.00. In Georgia, accounts with less than $10,000 can be transferred by affidavit and without probate and so can automobiles.
When it comes to wills, there are many better alternatives that would have kept William’s financial affairs more-efficiently managed and private. Attorneys know. Please ask. Call our Marietta estate planning lawyers at 770-425-6060 and let us educate you so you can make the decision of what planning tools are best for you and your family.
Like many Americans, your home is probably your largest asset. However, if you have children who have grown and moved away, you’re left with an empty nest, quiet and big. You may be torn between keeping the house and passing it to your children someday, or selling it. On one hand, it may be the biggest asset you could pass onto your children. On the other hand, you have your own immediate needs to consider, and maybe you’re not quite sure your kids could handle the house when you are gone. Before deciding whether to sell or keep your home, consider the following:
Your estate won’t pay federal estate taxes if the property is worth less than $11.2 million (current amount per person in 2018; $22.4 million for a couple), and Georgia has no estate or inheritance tax to deal with. Likewise, if your heirs keep the house, they will have to pay for upkeep, including property taxes. Property taxes increase as property values increase. While your children may want to have your house, they may not be ready to pay the taxes.
Your children will also have to pay taxes if they sell the house. This may be no big deal if the house is very valuable, gets a good price, and is sold in a seller’s market. However, if your children feel compelled to sell it, they may not be able to wait for an ideal time. You, on the other hand, may have time to wait for better conditions and can better absorb the taxes.
Regardless of whether your children keep your house or not, they may have to deal with cleaning, de-cluttering, repairs, and renovations. Unless you’ve been diligent with downsizing, you may be leaving a lot of work for your children, who may also have jobs and families to care for. You, however, may be in a better position to make your house move-in ready for your children or whoever buys the house.
The Here and Now
It’s important to plan for your future, but estate planning is about the present, too. You’re still alive, and you not only have needs, but desires and wishes. You probably don’t want to spend all your golden years planning for the time when you won’t be around.
If you don’t want to keep and care for a big house, you could still maximize the inheritance you are leaving to your family while enjoying your life. You could sell your house and buy a smaller condo, while putting the remaining money in a trust to take care of your expenses while you relax, take up a hobby, explore the world, or spend your time focusing on volunteer and charity work. The trust can then be left to your family when you are gone someday.
A Marietta will and trust lawyer can help you create an estate plan that fits your present needs and your desire to leave something for your children. We can help you understand both the laws that govern your property and the relationships you want to preserve. If you’d like to speak to our Marietta will and trust attorneys about creating an estate plan that is tailored to your needs, simply call 770-425-6060 to set up a consultation.
The Achieving a Better Life Experience (ABLE) Act, which was created by Congress in 2014, allows people with disabilities and their families to save up to $100,000 in accounts for the benefit of a disabled person. The funds can be saved without jeopardizing the individual’s eligibility for Medicaid, Supplemental Security Income (SSI) and other government benefits. ABLE accounts may be opened by anyone with a disability as long as the disability began before the person turned 26.
Starting in 2018, the amount of money that can be deposited in an ABLE account per year without jeopardizing public benefits will rise from $14,000 to $15,000. The amount that can be deposited in an ABLE account is tied to the federal gift tax exclusion, which has also risen to $15,000.
Other changes to the program in 2018 include the following:
- Traditional 529 plans can now be rolled into ABLE accounts. This helps parents utilize funds that were accumulated in traditional college savings plans before learning their child had a disability.
- Individuals with disabilities who are working may be able to save up to the federal poverty level. Rather than savings being capped at $15,000 per year, in some cases the new law will allow people with disabilities to save their earnings beyond that threshold up to the federal poverty level to potentially accumulate as much as $27,060 per year in savings.
- A note of caution: there are no real “safeguards” built into the legislation to help people monitor contributions that go over $15,000. There have been delays implementing this new part of the law, as financial professionals fear that mistakes are easy to make, and benefits could inadvertently be jeopardized.
Setting up an ABLE account is often a solid way to save money toward future expenses for an individual with disabilities. As with most federal or state programs, there are intricacies in the rules that should be understood prior to establishing an account. I encourage you to seek the assistance of a qualified Marietta Special Needs Lawyer to ensure that you understand the process before tying up your funds.
If you would like to speak to an attorney about the creation of an ABLE Account or to create an ABLE account in conjunction with a Special Needs Trust for your disabled loved one, please contact our Marietta special needs attorneys at 770-425-6060 to schedule a consultation.
Stephen M. Worrall, Marietta Estate Planning, Elder Law and Probate Attorney at Georgia Estate Plan: Worrall Law LLC, has been selected to the 2018 Georgia Super Lawyers list. He was named as a Top Estate Planning and Probate Lawyer, one of only 34 named in that practice area in Georgia this year. No more than five percent of the lawyers in the state are selected by Super Lawyers.
Super Lawyers, part of Thomson Reuters, is a rating service of outstanding lawyers from more than 70 practice areas who have attained a high degree of peer recognition and professional achievement. The annual selections are made using a patented multiphase process that includes a statewide survey of lawyers, an independent research evaluation of candidates and peer reviews by practice area. The result is a credible, comprehensive and diverse listing of exceptional attorneys.
The Super Lawyers lists are published nationwide in Super Lawyers Magazines and in leading city and regional magazines and newspapers across the country.In Georgia, the results are posted in Atlanta Magazine. Super Lawyers Magazines also feature editorial profiles of attorneys who embody excellence in their practice of law. For more information about Super Lawyers, go to SuperLawyers.com. To see Mr. Worrall’s listing, go here.
After the loss of a loved one, there’s so much to do. You need to communicate with family members, plan the funeral, and begin the process of settling their estate. As a Marietta probate lawyer, I can help you along these lines by giving you a list of important documents that you should gather to begin closing out his or her final affairs. The documents needed will vary depending on the person and their assets. As you start preparing, keep your eye out for the following:
- Account statements – This may include bank statements, investment accounts, 401(k)s, IRAs, pensions, health savings accounts, annuities, and 403(b)s. It is best that these statements are dated as close to the date of death as possible.
- Life insurance policies –If you are not sure if your loved one had a life insurance policy, check their bank statements to see if they were making payments to a life insurance company. Some people make their life insurance policy payments yearly instead of monthly. Also, if they were employed, you can check with their employer to see if they had a life insurance policy through their company. If they once served in the military you should check with the Department of Veterans Affairs as well.
- Beneficiary designations – These may include beneficiary designations for life insurance, retirement accounts (IRAs, 401(k)s, 403(b)s, and annuities), payable on death accounts, transfer on death accounts, and health savings accounts.
- Deeds for real estate – If the deeds are not available, many states will now allow you to view and print copies of deeds online.
- Automobile and boat titles – If you cannot locate these, you can contact the department of motor vehicles.
- Stock and bond certificates – Including cooperate certificates and local and state bonds.
- Business documents – If your loved one owned a small business, it is important to locate important documents for the company as well. These may include bank and investment statements, corporate records, tax returns, business licenses, deeds for property, loan documents, contracts, bills, and employee records.
- Bills – This will include utilities, cell phones, credit cards, personal loans, property taxes, insurance (real estate, automobile, boat), storage units, medical bills, and the funeral bill. Check their bank statements to see if the deceased was making regular payments to a company and contact that company for copies of the bills.
- Estate planning documents – Last Will and Testament, revocable living trust, etc.
- Other legal documents – Prenuptial Agreement, Postnuptial Agreement, leases (real estate, automobile), and loan documents (personal loans, mortgages, lines of credit).
- Tax returns – Both federal and state returns for the last 3 years.
- Death certificate – It is advised to order at least 10 copies of the original death certificate so you don’t have to keep ordering them.
If you are overwhelmed and would like help in settling your parent’s affairs, feel free to call our Marietta probate lawyers at 770-425-6060, and we can help you get through the process as quickly as possible.