Author: Trish Butcher
Photography: Provided and Repurposed Photography
What is Estate Planning and Why Your Family Needs a Plan Yesterday.
Estate planning is not only for the super-wealthy. Believe it or not, you probably have an estate too. In fact, nearly everyone does. Your estate consists of everything you own: your car, home, other real estate, checking and savings accounts, investments, life insurance, furniture, personal possessions. No matter how large or how modest, almost everyone has an estate. And there are two important truths in life – (1) we all pass away at some point & (2) we cannot take it with us when we die.
As an estate planning attorney, the number one comment I hear is, “I need a Will.” And my answer is always the same, “Yes you do, but you probably need more than just a Will.” Because an estate plan needs to be a comprehensive and personalized plan that protects you during your life and your family and assets after you have passed, and that requires a lot more than just a Will.
What is Estate Planning?
Because we do all eventually pass away, we usually want to control how our property is given to the people or organizations we care most about. To ensure that your wishes are carried out, you need to provide instructions stating whom you want to inherit, what you want them to receive, and how they are to receive it. Most, after consideration, want this to happen with the least amount paid in taxes, legal fees, and court costs and as quickly as possible.
This is estate planning. And if done correctly, it can ensure that your loved ones are able to carry out your wishes as easily as possible when it’s time.
What is a Will?
A Last Will and Testament, more commonly referred to as simply a Will, can accomplish some of these goals. It can direct who administers your estate (executor), who receives your assets (beneficiaries/heirs), what they receive, and who will care for minor children (guardians). However, a Will does not…
- Save your family from the costly and stressful court process known as probate and the associated attorney and court fees.
- Save your family from conflict and fighting.
Include instructions for your care and financial affairs if you become incapacitated before you die. - Provide for the transfer of your business at your retirement, disability, incapacity, or death.
- Provide for family members with special needs without disqualifying them from government benefits.
- Provide for loved ones who might be irresponsible with money or who may need protection from creditors or in the event of divorce.
- Minimize taxes.
Prepare for long-term care costs.
Yes, you read that correctly. Wills do NOT avoid probate. In fact, it is simply a legal directive that tells the judge what you want to happen during probate. It also does not include many other important documents, like Power of Attorney and Advanced Healthcare Directives.
Avoiding Probate
There are really only three ways to avoid probate in Georgia. The first way is to die with no assets – no home, car, property, money, etc. The second is to jointly own everything with a spouse or partner, which is easier said than done. Your house must be owned Jointly with Rights of Survivorship, and all bank accounts and investment accounts must be under both names. Retirement accounts and life insurance policies must name the spouse as the beneficiary. The third and final way to avoid probate is to create a Revocable Living Trust.
Revocable Living Trust
A revocable living trust (combined with a pour-over will) is preferred by many families and estate planning professionals. Establishing and funding a revocable living trust can help your family avoid the probate process altogether at your passing (including multiple probates if you own property in other states), prevent court control of assets if you become incapacitated during life, bring all of your assets (even those with beneficiary designations) together into one plan, protect from family conflict and challenges, and provide increased privacy.
Because the trust is revocable, the instructions governing it can be changed by you at any time. And living trusts are a much more flexible vehicle for leaving inheritances to your children.
Simply put, by creating a revocable living trust and transferring your assets into it (referred to as funding, and it is not as scary or hard as it sounds), your family will avoid all chances of court and conflict following your passing. They will also avoid the hefty probate attorneys fees that come along with it. A living trust is typically the best tool for someone to use to make it as EASY as possible for their loved ones after they are gone.
The Best Time to Plan Your Estate Is Now
Estate planning is not exactly an acceptable dinner conversation. None of us really like to think about our own mortality or the possibility of being unable to make decisions for ourselves. This is exactly why so many families are caught off-guard and unprepared when incapacity or death does strike. Don’t wait. You can put something in place now and change it later – which is exactly the way estate planning should be done.
Estate planning should be an ongoing process, not a one-time event. You should review and update your plan as your family, and financial circumstances (and the relevant laws) change over your lifetime. And it is very important that you find an attorney that you can trust and create a lifetime relationship with to help you with this.
Peace of Mind
Knowing you have a properly prepared estate plan in place – one that is customized to your family and will actually work when it is needed – will give you and your family peace of mind. Estate planning is one of the most thoughtful and considerate things you can do for your family.
