Lynn McNeese Swank
Attorney at law
157 Burke St., Suite 111
Stockbridge, GA., 30281
Phone: 678-833-2874 Fax: 678-833-2870
Email: lswank@swanklaw.com
www.swanklaw.com
 |  |  |  |  |
 |  |  |  |  |
ESTATE PLANNINGClick on the title to go directly to it.
General Information and FAQ
Proper Planning
Last Will and Testament
Power of Attorney
Durable Power of Attorney
Estate Planning
As one of the horrible aftermaths of the tragedies at the World Trade Center and Pentagon attacks, there will be a terrible flood of personal disasters as individuals have to probate the estates of their deceased loved ones, obtain conservatorships on the estates of those missing and not identified as dead, and handle the medical and legal affairs of the wounded.
Properly drafted Powers of Attorney (including General, Financial and Durable Medical) and well crafted Last Wills and Testaments are used in situations like this to smooth over the legal issues without excessive court delays or involvement. Unfortunately those documents cannot usually be created AFTER disaster has struck. This is a good time to put your personal house in order if you have not previously done so or to review your plans and make certain that they are timely and up to date.
Backup copies of document are also desirable in estate planning situations. This type of a disaster is, fortunately, very rare, but the burning of a building has shown us that total loss of records can occur:
loss of the personal business and planning records of the deceased,
This situation may never re-occur but it is a warning to all of us that the World Trade Center disaster and attack on the Pentagon will have repercussions for years in the lives left behind.
We express our condolences to the victims, their families, their friends and all of the volunteers and professionals who are struggling so hard to alleviate the pain, as well as to everyone on our planet who is heartbroken and anguished because of these events.
Georgia has a very flexible and modern probate code which has undergone significant revision in the preceding several years. If a Georgia resident dies after preparation of a competent Last Will and Testament, there is very small cost in probate procedure itself. All statutory reports, inventories and appraisals (which are not required for purposes of the Internal Revenue Code) can be eliminated. Thus, with a properly drawn Will, the administration of an estate can be relatively inexpensive, quick and private.
A Last Will and Testament should generally provide for the payment of the debts of the deceased, the assembly of assets, and the ultimate division among the persons or categories of recipients selected by the deceased. If there is a minor child or a person who cannot manage his or her own affairs due to age or diminished mental or physical condition, then a trust might be used as an internal part of the Will so that funds would be available as needed without actually giving over any control of those assets to the child or sick or aged person. A guardian should be designated for such a person who needs to have legal, adult supervision.
If there is no Will the assets of the deceased do not automatically go to the State by default. Instead, there is a procedure set up by statute which determines the order and priority of distribution among creditors, relatives, and others. That distribution might be the same path as the one chosen by the deceased if a Will had been made, but it might be substantially different. Further, without a Will, the involvement of Probate Court is significantly greater. Request must be made for permission of the Probate Court for each major action, and that Order may involve publication of notice (so that objections could be filed), formal service of notice upon the interested parties, and a Hearing. Each request to Probate Court would require the payment of additional fees. Reports would be required for the original report of contents of the estate, annual income and disbursements, and the distributions permitted by the Court. A bond (obtained from an insurance company) would also be required.
Can an estate be managed without probate? Georgia is not a state where probate is so costly or complicated that it should be feared. Arrangements can be made in property ownership and by contract so that many assets pass immediately without waiting for probate court review, however, it is still desirable to have a Last Will and Testament. For example, the death may have occurred as a result of a vehicle collision or product malfunction for which a lawsuit is needed. Without a Will, the Probate Court would have to be involved step by step in any such claim, including in negotiation for settlement. Disputes are more easily resolved where a Will have given clear authority to an Executor so that only that person’s decision is needed in order to finalize an issue.
Are there special provisions to protect a surviving spouse and minor children from creditors of the estate? Yes, Georgia has a probate procedure which is called "Year’s Support" or formerly "Twelve Month’s Support." This proceeding allows the widow or widower and any minor children (of that marriage or any other descent) to have priority rights to assets sufficient to support them for a year’s interval even if there is not enough in the estate for payment of debts.
Is estate planning performed only for tax reasons? No, typically estate planning is done in order to protect surviving family, to control the disposition of assets, and to establish guardianship for minor children or persons who are not competent to manage their own affairs. Estate taxation, income taxation of the decedent’s assets, and gift or transfer taxes do not affect every estate in the same manner. There is a credit which is available to individuals which may be used to offset gifts made while I life or estate tax after death ("the Unified Credit"). The level at which the unified credit will no longer apply has been rising slowing so that for 1999 an estate, which has not previously used the credit for offsetting gift taxes, may have net assets of $650,000.00. For 2000 and 2001 that level rises to $675,000.00 and then gradually increases to $1,000,000 by the year 2006 and thereafter. The use of this credit excludes many ‘smaller’ estates from estate tax burdens.
What is the Marital deduction? For estate tax purposes, property which passes from one spouse to another is not treated as part of the taxable estate. If all of an estate goes from the spouse who dies first to the survivor then there would be no estate tax (although there might be other types of taxes depending on the state of residence and the type of property contained in the estate). However, the tax which is applied to the estate of the surviving spouse could be much higher than it would have been with proper planning due to the consolidation of all assets in that person’s hands.
Is life insurance taxable as part of a person’s estate? The answer depends on who the owner of the policy is and if the estate is the beneficiary. If the deceased was the owner of the policy then it probably would be included in the estate and subject to tax if the level is reached where tax must be reported. If the policy was owned by someone other than the deceased, then the proceeds should be altogether tax free.
Have recent
actions by the U.S. Congress with respect to amendment of the Estate and
Gift Tax laws eliminated the need for estate planning and a Last Will and
Testament?
Proper planning is imperative in this situation.
Should a person create trusts during lifetime for either tax or planning purposes? The use of life time or ‘inter vivos’ trusts is very important in some planning situations and unnecessary in others. A trust may be created to handle financial affairs for someone who is not able to do so. A trust may be created for tax issues - to either remove assets from a projected estate, or to prevent assets from becoming part of another person’s estate. The decision is very much based on the specifics of the person and their individual goals.
Are there planning steps which a person should undertake for use during their lifetime even if they are not wealthy? Yes. There are at least two points which any person should consider:
1. A Last Will and Testament. There are a great many forms and software programs available for preparing Wills. Whether you prepare your own, use a form or program, or receive assistance from someone, you should have your completed product reviewed by competent legal counsel.
2. The use of a general ‘financial’ power of attorney. There are reasons why not every "agent" would wish to have a general power of attorney in place at all times because it allows the named person to act at any time and for any purpose (unless the document contains some limitations.) However, in the event of accident or illness it can be very valuable. Merely having a relative or friend able to sign checks on your bank account is rarely enough. In a crisis, you may need to have someone borrow against your assets, change your locks, file your tax returns, make insurance claims, and possibly run your business. Georgia has a statutory form but if you are not clear on the purpose and use, it would be best to consult with an attorney before putting one into place.
3.
The use of a Durable Power of Attorney for Health Care.
Durable Power of Attorney for Health Care. This is the replacement for
documents which were called ‘living Wills.’ Rather than directing that
a doctor or health care facility make decisions for a person who is not
able to do so, the Durable Power of Attorney for Health Care allows the
patient to pre-designate a human being (friend, relative, trusted
associate) to make that decision. This removes the question from strangers
and allows the patient’s wishes to be followed. The form is set by state
law in Georgia and can be used by anyone who is able to legally express
their choice. Even minors can sign these documents but it would be subject
to the decisions of their parent or legal guardian if medical decisions
were required which the minor was still less than 18 years of age. The
text is basically ‘fill in the blank,’ and is included here.