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Three Parts of a Basic Estate Plan

Every person, no matter how significant they may feel their assets are, absolutely needs to have a well thought out estate plan that covers three very basic documents that will serve your best interests and make the lives of those you care about that much easier when the time comes. The three main planning instruments you should have include a durable power of attorney, a health care directive, and a last will and testament. These instruments will cover an array of subjects in our lives and our family’s lives after we pass away and should be taken very seriously, regardless of what you believe you may leave behind.

Power of Attorney

 

The first thing you need to include in your estate plan will be a power of attorney. This allows you to designate a person of your choosing to manage your property, assets, and finances during your life in the event you are incapacitated and unable to act in your own interest. A power of attorney carries a lot of weight and gives someone almost complete control of your financial life and should be vested in a trusted individual you can be sure will act solely in your best interest should a time come where you can’t handle these situations yourself.

Healthcare Directive

 

The second thing you should look into is a health care directive. A healthcare directive is essentially a type of a power of attorney that deals only with health care decisions. A healthcare directive allows you to appoint a trusted person to direct your medical care and make important end of life decisions should you be unable to.

 

Last Will and Testament

The third and most essential piece of estate planning is your last will and testament. A last will and testament is the most basic mechanism used to transfer property to family and friends upon our death. There are numerous other ways to pass along our assets and other parts of our estates, including various forms of trusts, a last will and testament is still necessary to direct our loved ones whom we leave behind about our final wishes including whether we wish to be buried, cremated or shot off into space, types of memorial services and other ways in which we want to be remembered.

It is important to understand that these are just the essentials of an estate plan and what you will ultimately need will vary depending on what your leave behind and who you wish to leave it to. Significant assets like large bank and investments accounts, your home or other real estate assets, your business, and other valuables like expensive jewelry or art may need even more extensive estate planning that satisfies everything from family dynamics and business partners to tax and legal considerations.

If you find that your basic estate planning is not where you want it to be, schedule a no pressure, complimentary consultation with one of our attorneys today so we can go over your wishes and create a basic estate plan that will leave you with peace of mind and your family with valuable information about your wants and desires when the unthinkable happens.

Don’t Make and Estate Planning Mistake

In life, it’s easy to make a mistake. Estate planning is one of the most important things you can do in life.  It should be taken very seriously in order to avoid hassles or other delays that can come when you probate your will and begin transferring assets to family and friends.  With the correct planning, most people are able to avoid the costly mistakes that can lead to a prolonged and painful probate battle.

One of the most common estate planning mistakes you can make is adding a friend or young family member’s name to a joint account.  You may think that it will make it easier to transfer assets or even pay final expenses. Often that isn’t true. It can cause confusion about your intentions once you pass and can complicate the probate process.  It could also open you up to potential unscrupulous conduct by those you put on your account. The better alternative would be to give a trusted person a power of attorney to make financial decisions on your behalf in the event that you are unable to.

Another common mistake is not updating beneficiaries.  By having the wrong beneficiaries listed on bank accounts, life insurance policies and retirement accounts you can prevent your assets from being transferred to your intended beneficiaries. Often, individuals will create a single will and never bother with  updating it when major life events happen like having children or grandchildren, divorcing or remarrying or the death of a loved one. If you don’t update your will when these types of things happen your estate could essentially become intestate and you could be setting your heir up for a legal fight or a situation where the state itself decides what happens to your assets.

Out of all the mistakes listed above, the biggest mistake is having no plan at all.  Yes, there are legal mechanisms that will provide for your surviving spouse and your children and grandchildren but the state can’t possibly understand all your wishes and what you wanted may ultimately not happen.  Estate planning is essential to your piece of mind and also to those family members and friends who will survive you. If your estate plan is lacking, contact the caring and competent attorneys at Harmon and Gorove today for a free consultation about what your estate planning options are.  

If You Die With Debt, Here’s What Happens

When you are making your plans and enjoying the present with your loved ones you build a legacy.  One of the things that people often don’t consider when building that legacy is the debt that they may leave behind in the event that they die with debt.  Unfortunately, many of your debts can and will out live you and the people you leave behind could be affected by those debts. If you have already created a will you will likely have named an executor who will be responsible for taking care of your debts and disposing of your assets when you pass.

When I Die, What Happens to My Debts?

If you die with debt, these are the most common types of debts that can have an impact on the ones you love:

Student Loans: If your student loans were obtained from the Federal Government, they will be forgiven upon your death.  If you took out private students loans, they can recover money from your estate or from a co-signer or guarantor. In the event that your estate has exhausted its resources, the private loans will also be wiped out.

Home Loans and Mortgages: If you own a home jointly with someone else or you wish to pass your home to a loved one and you die with debt on the property, they are responsible for continuing to pay your mortgage(s) after you pass. While the government protects you from having the loan called in upon your death, the note will have to continue to be paid until those you leave behind decide what to do with the property

Car, Boat, Motorcycle Loans: If the payments on these types of loans are not made then the person who lent you the money can take possession of the vehicle.  The person you leave the vehicle to will have the option of continuing to pay on the note but there are other probate concerns that often arise with transfer of title but that is something you may need to speak with a qualified probate attorney about.

Credit Card Debt and Medical Bills: While these types of debt are not secured by collateral (a car, house, etc.) if your estate has remaining funds they can be recovered by the credit card company or medical firm.  If the estate has no remaining assets then your debts are generally wiped out. In the event that that you have a JOINT credit card account, the non-deceased person will be on the hook for the debt incurred by you.  This generally doesn’t apply to an authorized user but if the primary passes away and you do not intend to continue to pay on the credit card, you shouldn’t continue to use that card.

Taxes: If you die with debt owed to the IRS or your state department of revenue it can create a headache for those you leave behind.  If you die owing back taxes and you have filed jointly with a spouse, your spouse is liable for the entire amount of the taxes.  Additionally, the IRS can try to collect any tax debts owed from your estate, even if you did not file jointly with your spouse. The IRS does allow certain exemptions but it would be advisable at that point to consult a qualified tax attorney to discuss your options.  

These situations can be avoided

If you need to file bankruptcy, get help now. Reach out to a qualified bankruptcy attorney, tax attorney or financial planner to discuss your particular situation. Ridding yourself of debt before you pass might be a good option for you.  The best thing you can do for your loved ones is to prepare your estate so they aren’t hit with unpleasant surprises in a time of profound grief. At the very least, you should have a last will and testament in place. You should also keep those you love apprised of your financial situation.  Provide them with a list of assets and liabilities, where you keep safe deposit boxes, a list of passwords and combinations to safes and lockboxes to assist your loved ones in closing out your affairs when the time comes. While your creditors are allowed to contact your heirs about collecting on debts when you retire, they must follow the guidelines set out the the Fair Debt Collection Practices Act.

Dying Without A Will In Georgia

It’s a task that many of us put off because of one reason or another.  Maybe you don’t want to talk about it, maybe you think it’s too hard or maybe you are just scared to start the process but when someone dies without a will that person’s “estate” will go through Georgia’s intestacy laws. There have been some very prominent people dying “intestate” lately including the musician, Prince. His massive estate is now in probate in Minnesota, his home state, and a fight is brewing amongst his possible heirs. Very few comprehend what this means or what the laws are in place, but essentially the State of Georgia, through its system of laws, has written a Will for you and you have no control over what’s in it.

What’s Affected

Only property that is solely in the decedent’s name will be handled under the intestacy laws. Certain property is considered to be out of probate. This property normally includes things that are owned jointly with someone else or have a designated beneficiary.

Accounts (401k, IRAs, checking and savings, pensions, etc.) that have a POD (payable on death) designation or property that is owned in joint jointly with someone else, go to the surviving owner following the death of the other owner.

Retirement accounts, IRAs or life insurance proceeds, where a beneficiary is named, are also considered out-of-probate and will go directly to the beneficiary and not through the probate court.

Intestate Succession

The most significant problem that arises when it comes to handling an estate through the laws of intestacy involves who receives what from the deceased’s estate. A large part of who gets what depends on whether the deceased passed leaving a surviving spouse, children or parents.

If you were Married with children:

If you leave a surviving spouse and children, your spouse and your children will have to share your property. In Georgia, the spouse’s portion of the estate can’t be less than 1/3 of your estate.

Married with no children:

If you have died and did not have any children your surviving spouse will receive the entirety of your estate.

Not married but you have children:

If you aren’t married at the time of your death but you have surviving children your children receive equal portions of your estate.

No spouse, No children but surviving parents:

In you aren’t married and don’t have living descendants, but one or both of your parents are still alive, the property goes to your parents.

No spouse, No descendants, No living parents:

If you die with no spouse or living descendants and your parents have predeceased you but DO have living siblings, your brothers and sisters will inherit your estate.

How Is The Amount of The Surviving Spouse’s Share Determined

Georgia’s intestacy laws are formulated to make sure that any spouse you leave behind is taken care of in the event that you die leaving children or grandchildren.

The law makes it clear that, even if you die leaving a significant number of descendants, your surviving husband or wife’s share of your estate can’t be less than 1/3 of the total value of the assets. Whatever is left over is split equally among the children and/or grandchildren.

What Will The Size of The Children/Grandchildren’s Share be?

How much of your estate that your kids will get depends on how many kids you have. All legally recognized children of yours will receive a portion of your estate. Legally recognized children are children born naturally to you and your spouse or adopted by you or your spouse The law does not include step-children.

If one of your children died before you but did leave grandchildren that child’s share is divided equally among their children.

Will the State Get My Property:

While it is extremely unlikely, situations where someone dies with no family do occur on extremely rare occasions.

The law is set up so that in the event that you die without a will and you have no immediate family, your extended family will receive your property.  Your extended family would be cousins, aunts and uncles, and others on down the line. The laws exists for the purpose of ensuring that anyone who is related to the deceased receives the property. If absolutely no relative is available, then, and only then, will the state receive the property.

Avoiding costly battles:

Dying intestate happens frequently. It even happens to the most famous and wealthy among us.  Developing even a simple will is something that most people don’t want to think about but it can make the grief and stress of losing a loved one much more bearable.  If your family knows your wishes it can alleviate the stress of making decisions at one of life’s most trying times. Having a will can also help avoid costly legal battles to determine who gets what.  It also allows you to have a sense of peace knowing that your property will be divided up as YOU want it to and only those people that YOU approve will get your stuff. If you want to get the ball rolling on preparing a will give the compassionate and understand attorneys at Harmon and Gorove a call today.  We will meet with you and discuss your options and we offer cost effective estate planning options.  Let us help you have peace of mind.