At Georgia Family Law, P.C., we understand that planning a Will is more than just what do I want to leave to whom, but rather an entire process to help you determine what is in the best interests of you and your family.
What is Estate Planning?
Estate planning is a process. It involves people—your family, other individuals, and, in many cases, charitable organizations of your choice. It also involves your assets (your property) and the various forms of ownership and title that those assets may take. And it addresses your future needs in case you ever become unable to care for yourself.
Through estate planning, you can determine:
How and by whom your assets will be managed for your benefit during your lifetime if you ever become unable to manage them yourself.
When and under what circumstances it makes sense to distribute your assets during your lifetime.
How and to whom your assets will be distributed after your death.
How and by whom your personal care will be managed and how health care decisions will be made during your lifetime if you become unable to care for yourself.
Many people mistakenly think that estate planning only involves the writing of a will. Estate planning, however, can also involve financial, tax, medical and business planning. A will is part of the planning process, but you will need other documents as well to fully address your estate planning needs.
What is involved in Estate Planning?
There are many issues to consider in creating an estate plan. First of all, ask yourself the following questions:
What are my assets and what is their approximate value?
Whom do I want to receive those assets—and when?
Who should manage those assets if I cannot—either during my lifetime or after my death?
Who should be responsible for taking care of my minor children if I become unable to care for them myself?
Who should make decisions on my behalf concerning my care and welfare if I become unable to care for myself?
What do I want to be done with my remains after I die and where would I want them buried, scattered, or otherwise laid to rest?
Once you have some answers to these questions, you are ready to seek the advice and services of a lawyer who can help you create an estate plan, and advise you on such issues as taxes, title to assets and the management of your estate.
Who needs Estate Planning
You do—whether your estate is large or small. Either way, you should designate someone to manage your assets and make health care and personal care decisions for you if you ever become unable to do so for yourself.
If your estate is small, you may simply focus on who will receive your assets after your death, and who should manage your estate, pay your last debts and handle the distribution of your assets.
If your estate is large, your lawyer will also discuss various ways of preserving your assets for your beneficiaries and of reducing or postponing the amount of estate tax which otherwise might be payable after your death.
If you fail to plan ahead, a judge will simply appoint someone to handle your assets and personal care. And your assets will be distributed to your heirs according to a set of rules known as intestate succession. Contrary to the popular myth, everything does not automatically go to the state if you die without a will. Your relatives, no matter how remote, and, in some cases, the relatives of your spouse will have priority in inheritance ahead of the state. Still, they may not be your choice of heirs; an estate plan gives you much greater control over who will inherit your assets after your death.
What is included in my estate?
All of your assets. This could include assets held in your name alone or jointly with others, assets such as bank accounts, real estate, stocks and bonds, and furniture, cars, and jewelry. Your assets may also include life insurance proceeds, retirement accounts, and payments that are due to you (such as a tax refund, outstanding loan or inheritance).
The value of your estate is equal to the "fair market value" of all of your various types of property—after you have deducted your debts (your car loan, for example, and any mortgage on your home.) The value of your estate is important in determining whether your estate will be subject to estate taxes after your death and whether your beneficiaries could later be subject to capital gains taxes. Ensuring that there will be sufficient resources to pay such taxes is another important part of the estate planning process.
How should I provide for my minor children?
First of all, in your will, you should nominate a guardian to supervise and care for your child (and to manage the child’s assets) until he or she is 18 years old. Under Georgia law, a minor child (a child under age 18) would not be legally qualified to care for himself or herself if both parents were to die. Nor is a minor legally qualified to manage his or her own property.
Your nomination of a guardian could avoid a "tug of war" between well-meaning family members and others. You also might consider transferring assets to a custodian account held for the child until he or she reaches age 18, 21 or 25. Or you might consider setting up a trust to be held, administered, and distributed for the child’s benefit until the child is even older.
When does Estate Planning involve tax planning?
Estate taxes are currently imposed upon estates that have a net value of $3.5 million. In 2010, the estate tax will disappear completely. Then, unless Congress passes an extension, the exemption will revert back to $1 million in 2011. For estates that approach or exceed these amounts, significant estate taxes can be saved by proper estate planning, usually before your death or, for couples, before one of you dies. Keep in mind that tax laws often change and estate planning for tax purposes must take into account not only estate taxes but also income, capital gains, gift, property, and generation-skipping taxes as well.
Are there other ways of leaving property?
Yes. Certain kinds of assets are transferred directly to the named beneficiaries. Such assets include:
Life insurance proceeds.
Qualified or non-qualified retirement plans, including 401(k) plans and IRAs.
Certain "trustee" bank accounts.
Transfer on death (or TOD) securities accounts.
Pay on death (or POD) assets, a common title on U.S. savings bonds.
Keep in mind that these beneficiary designations can have significant tax benefits and consequences for your beneficiaries—and must be carefully coordinated with your overall estate plan.
At Georgia Family Law, P.C., we represent you to ensure that all of your Estate Planning needs are addressed to allow you to make the right decisions for the best interest of you and your family.