As your Atlanta GA asset protection lawyer, I’d like to ask how your holiday shopping is going? If you are like me you are trying your best to fit that in with all of the other holiday planning and day-to-day obligations. What if I told you to skip the malls when looking for a holiday gift idea for your grandkids? What if you give them a family limited partnership instead?
Let me explain…
While the estate tax lapse seems to be hogging the spotlight this year, there is also a lesser-known gap that is offering many people a tax-free way to pass on some of their wealth to their grandchildren.
The generation-skipping transfer tax, or GST, has also been repealed for 2010. This means that you can leave outright gifts to your grandchildren as long as those gifts meet certain conditions. The definition of a “gift” is fairly broad, but one way to take advantage of this is to set up a partnership and then give away units to your grandchildren. This will mean that you can put funds into a family limited partnership and transfer them tax-free but also transfer it in a way to keep the kids from getting control of the assets all at once and possibly squandering them.
The GST is different than income, estate and gift taxes. The purpose of this tax is to keep people from transferring property many generations down without paying any tax. So, the GST is imposed if the transfer avoids gift or estate tax.
So, say a man dies with a large estate and leaves his property in a trust with the income payable to his children. At his death, his trust assets go to his children. The man’s estate would then owe estate tax. But when his children die, the trust property would not be taxable in their name so the family will have avoided paying for a generation of estate tax. In this instance, the GST would apply.
It is important to point out that the GST applies to anyone, not just family, so this would apply to unrelated beneficiaries as long as they were at least 37 and one-half years younger than the deceased.
There are limits to what you can exempt in generation skipping gifts and you are only allowed to use them in certain circumstances. So, it is important to talk to an experienced Atlanta Georgia asset protection attorney when considering this.
So, as you are pondering your holiday list you might want to consider this for your grandchildren. This will be a gift they will remember (and thank you for!) for the rest of their lives!
Foreword You have the right to control all aspects of your personal care and medical treatment, including the right to insist upon medical treatment or direct that medical treatment be withheld or withdrawn. If you cannot (or do not want to) communicate your health care decisions for yourself, you have the right to choose someone to make health care decisions for you. You also have the right to state your treatment preferences if you have a terminal condition or are in a state of permanent unconsciousness.
The Georgia Advance Directive for Health Care Act gives you an opportunity to choose someone to make health care decisions on your behalf and to make a clear expression of your decisions regarding health care if you are in a terminal condition or state of permanent unconsciousness by executing an advance directive for health care.
What is an advance directive for health care? An advance directive for health care (ADHC) is a legal document in which you (1) appoint your health care agent, and/or (2) direct the withholding or withdrawal of life-sustaining procedures and/or the provision of nourishment or hydration if you are in a terminal condition or a state of permanent unconsciousness. (Since 2007, the ADHC has replaced the legal documents called durable power of attorney for health care and living will in Georgia.)
Is any particular form of ADHC required? You may use any form of ADHC that complies with Georgia law. However, the law provides a standard form of ADHC that will be treated as complying with Georgia law if it is properly executed. An attorney can provide you a form of ADHC and help you understand it, complete it and properly execute it. An ADHC must be in writing, signed by you, and attested and signed by two adult witnesses. You may revoke or amend your ADHC at any time.
Who may execute an ADHC? Any adult who is of sound mind may execute an ADHC.
What is a health care agent? A health care agent is a person appointed by you in an ADHC to act on your behalf to make decisions related to the consent to, refusal of or withdrawal of any type of health care. A health care agent may also be given the authority to make decisions related to autopsy, anatomical gifts and the final disposition of your body after your death. A physician or health care provider who is directly involved in your care may not be your health care agent.
What is meant by health care? Health care means any care, treatment, service or procedure to maintain, diagnose, treat or provide for your physical or mental health or personal care.
What powers does my health care agent have? Your health care agent will make health care decisions for you only when you are unable to communicate your health care decisions or you choose to have your health care agent communicate your health care decisions. Your health care agent will have the same authority to make any health care decision that you could make. The health care agent's authority includes the power to admit you to or discharge you from any hospital, skilled nursing facility, hospice or other health care facility or service; the power to request, consent to, withhold or withdraw any kind of health care; and the power to contract for any health care facility or service for you and to obligate you to make arrangements for these services. Your health care agent may accompany you in an ambulance and may visit or consult with you in person while you are in a hospital, skilled nursing facility, hospice or other health care facility. If you choose, your health care agent will also have the power to authorize an autopsy of your body after your death, make a disposition of all or any part of your body for medical purposes and make decisions about the final disposition of your body.
Does my health care agent have access to medical records? Your health care agent will be your personal representative for all purposes of federal or state laws relating to privacy of medical records and will have the same access to your medical records that you have and can disclose the contents of your medical records to others for your ongoing health care.
How does my health care agent make decisions? When making health care decisions for you, your health care agent should think about what action would be consistent with past conversations the two of you have had, your treatment preferences as expressed in your ADHC, your religious and other beliefs and values and how you have handled medical and other important issues in the past. If what you would decide is still unclear, then your health care agent should make decisions for you that your agent believes are in your best interest, considering the benefits, burdens and risks of your current circumstances and treatment options.
Am I required to appoint a health care agent in my ADHC? You are not required to appoint a health care agent in an ADHC. If you wish, you may use an ADHC only to express your treatment preferences if you have a terminal condition or are in a state of permanent unconsciousness.
How do I express my treatment preferences for a terminal condition or state of permanent unconsciousness in my ADHC? In an ADHC you may express your treatment preferences for either or both of two conditions: if you are in a terminal condition or if you are in a state of permanent unconsciousness. Your condition will be determined in writing by your attending physician and a second physician in accordance with currently accepted medical standards. Your treatment preferences in your ADHC will be followed only if you can no longer communicate your treatment preferences after appropriate efforts have been made to communicate with you about your treatment preferences. Treatment preferences are your decisions as to the withholding or withdrawal of life-sustaining procedures and/or the provision of nourishment and hydration (nutrition and fluids).
What is a terminal condition? A terminal condition is an incurable or irreversible condition which would result in your death in a relatively short period of time.
What is a state of permanent unconsciousness? A state of permanent unconsciousness is an incurable or irreversible condition in which you are not aware of yourself or your environment and in which you show no behavioral response to your environment.
What are life-sustaining procedures? Life-sustaining procedures are medications, machines or other medical procedures which, when applied to you in a terminal condition or state of permanent unconsciousness, could in reasonable medical judgment keep you alive but cannot cure you and where, in the judgment of the attending physician and a second physician, your death will occur without such procedures or interventions. Life-sustaining procedures do not include administration of medication to alleviate pain or the performance of any medical procedures deemed necessary to alleviate pain. Life-sustaining procedures also do not include the provision of nourishment or hydration (nutrition and fluids), but you may direct the withholding or withdrawal of nourishment or hydration in an ADHC.
What are my options for treatment preferences for a terminal condition or state of permanent unconsciousness? The form of ADHC provided by the law allows you to express any one of three preferences for treatment if you are in a terminal condition or state of permanent unconsciousness: (1) Try to extend your life as much as possible, using all life-sustaining procedures, and if you are unable to receive nourishment or hydration (nutrition and fluids) by mouth, then you want to receive artificial nourishment or hydration (by tube or other medical means); (2) Allow your natural death to occur; you do not want any life-sustaining procedures or artificial nourishment or hydration; (3) You do not want any life-sustaining procedures
except as you specifically indicate in the form, and you can choose to receive artificial nourishment and/or hydration, a ventilator and/or CPR. No matter which of the three options you choose, you may also provide additional treatment preferences on the form.
Can my health care agent make decisions regarding my treatment in a terminal condition or state of permanent unconsciousness? Unless you provide otherwise in your ADHC, the treatment preferences expressed in your ADHC are ineffective so long as you have a health care agent who is available and willing to make decisions on your behalf regarding the withholding or withdrawal of life-sustaining procedures and/or the provision of nourishment or hydration. However, your health care agent is required to take any treatment preferences expressed in your ADHC into account when making decisions about your health care.
Am I required to express my treatment preferences for a terminal condition or state of permanent unconsciousness in my ADHC? You are not required to express treatment preferences for a terminal condition or state of permanent unconsciousness in an ADHC. If you wish, you may use an ADHC only to appoint a health care agent.
Is my health care provider required to honor my ADHC? If your health care provider receives your ADHC, your health care provider has the responsibility to enter the ADHC in your medical records, to grant your health care agent adequate access to you, to consult with your health care agent, to comply with the decisions of your health care agent and to give your health care agent the same right to examine and copy your medical records that you would have. A health care provider who fails or refuses to comply with your treatment preferences regarding the withholding or withdrawal of life-sustaining procedures and/or the provision of nourishment or hydration must advise your health care agent (if you have one) or your next of kin or guardian and, if directed to do so, must allow you to be transferred to another physician who will comply with your treatment preferences.
What effect does my marriage or divorce have on my ADHC? Unless you provide otherwise in your ADHC, if you get married after executing an ADHC, the marriage revokes the designation of anyone other than your spouse as your health care agent. And unless you provide otherwise in your ADHC, if you get divorced after executing an ADHC, the divorce revokes the designation of your former spouse as your health care agent.
What is the difference between an ADHC and a durable power of attorney for health care? Georgia law used to provide for the appointment of a health care agent in a document called a durable power of attorney for health care. Since 2007, the ADHC has replaced the durable power of attorney for health care in Georgia. Your durable power of attorney for health care executed under the old law remains effective, but it would be a good idea for you to replace it with an ADHC.
What is the difference between an ADHC and a living will? Georgia law used to provide for the declaration of treatment preferences for a terminal condition and state of permanent unconsciousness in a document called a living will. Since 2007, the ADHC has replaced the living will in Georgia. Your living will executed under the old law remains effective, but it would be a good idea for you to replace it with an ADHC.
What is a guardian? A court will appoint a guardian for you if the court finds that you are not able to make significant responsible decisions for yourself regarding your personal support, safety or welfare. A court will appoint the person nominated by you if the court finds that the appointment will serve your best interest and welfare. In an ADHC, you may nominate a person to serve as your guardian in the event a court decides that a guardian should be appointed. You may (but are not required to) nominate your health care agent to be your guardian. A guardian does not have the power to manage your property or financial affairs.
This pamphlet was prepared by the Fiduciary Law Section of the State Bar of Georgia as a public service. It is not intended to be a comprehensive statement of law. Its purpose is to inform, not to advise on any specific legal problem. If you have specific questions regarding any matter contained in this pamphlet, you are encouraged to consult an attorney.
Any of these documents can help to establish your wishes when it comes to the medical treatment you receive at the end of your life.
But do they really work?
According to one of the largest studies on the effectiveness of documents specifying medical treatments desired, or not desired at the end of life, yes, these documents do work. And more and more Americans are using these tools to make their wishes known.
The results of this study, published in the New England Journal of Medicine, showed that seventy percent (70%) of the people followed in the study lacked the ability to make choices toward the end of their lives because of their mental or physical health. Fortunately, most of them had advance directives and their wishes were not only known but followed. The will of the patient prevailed.
So which documentation is the right choice? Here’s what you need to know:
A Living Will specifies the type of medical treatment you desire if you become incapacitated. If you are permanently unconscious or terminally ill, your Living Will merely tells your family and the medical community whether or not you desire to receive life sustaining treatment. The Living Will does not allow you to appoint someone else to make decisions for you. It just makes your wishes known.
Durable Power of Attorney for Health Care
A Durable Power of Attorney for Health Care allows you to appoint an agent with the legal authority to make decisions for you, relating to health care issues and treatment, should you become unconscious, mentally incompetent or otherwise unable to make those decisions. By making this a “durable” document, you are including language to make sure that this document remains effective or will take effect if you are mentally incompetent. In many states, you can also include language to make your wishes known with regard to “life-sustaining procedures” if you are in a coma or terminally ill. But a word to the wise, even if you include language about your wishes in this regard, make sure you discuss them with the person you designate as your agent.
Advance Health Care Directive
In many states, such as Georgia, the Advance Health Care Directive has replaced the Living Will and Durable Power of Attorney for Health Care as the document for making your wishes known with regard to health care treatment and decision making. This document instructs others (your family and the medical community) about your care if you are unable to make those decisions on your own. It only becomes effective under the specific circumstances you provide for in the document itself. The Advance Health Care Directive allows you to do either or both of the following:
- Appoint a health care agent
- Prepare instructions for health care
This document provides a very clear statement of your wishes about your choice to prolong your life or to withhold or withdraw treatment. You can be as specific as you like about the medical care you want at the end of your life. For example, if you are a vegetarian or vegan, you can specify that you do not want to be fed meat. You can indicate whether or not you want hydration and nutrition to be withdrawn and that it goes beyond whether or not you can breathe on your own.
The Advance Health Care Directive allows you to do everything in one document that a Living Will or Durable Power of Attorney for Health Care allow you to do separately. If you already have a Living Will or Durable Power of Attorney for Health Care, don’t worry. Both of these documents are still valid until you take steps to replace them with an Advance Health Care Directive.
If you have any of these documents in your current estate plan, make sure that copies are provided to your appropriate family members, your primary care physician and/or anyone you have named as an agent in these particular documents.
If you don’t currently have these documents in your estate plan and would like an expert opinion on which is appropriate for your particular circumstances, call us to schedule your Georgia Family Treasures Planning Session today. We can identify what needs to be done to ensure that you have the right documentation to make your wishes known and followed.
Also, as part of our estate planning process, we will interview you about your specific wishes and what you want your family to know. We provide you with a copy of the interview so you can pass on the information you want your family to remember. We understand that it’s not just about the paper you leave behind, but the voice you leave behind. Our Georgia Family Treasures Planning Session is normally $750, but this month I’ve made space for the next two people who mention this article to have a complete planning session with me at no charge. Call today and mention this article
By Steve Worrall, Atlanta wills and estates lawyer
Perhaps you saw it on the news a few weeks ago that economists on Wall-Street declared the recession officially over.
I’m not sure how they came to such conclusions, but I look around and still see far too many friends and family struggling to recover from the chaos to really consider it over. And while I acknowledge things may be improving on some fronts, I still find it hard to objectively look at a father who can’t find work or a mother who’s lost a huge chunk of her 401(k) plan to say our Country is officially in the clear.
I’m equally saddened by the number of bankruptcies taking place right now. For many families, bankruptcy is the only way to break free from the mountain of debt that constantly rests on their shoulders. Of course that’s not to say this decision is ever taken lightly by those who file, as the consequences of bankruptcy are long-lasting and sometimes severe—especially if you stand to inherit money.
Let’s say for example that you had a family member pass away who left you a cash gift in their will or trust. On the surface it seems like this would be a much needed and timely relief for a family going through bankruptcy. However, Federal bankruptcy rules declare that if you inherit money from a person who dies within 180 days of the date you filed for bankruptcy, you must tell the courts. In simple terms, that means the inheritance now becomes a part of your bankruptcy estate and will be distributed to your creditors as the courts see fit.
This also applies to items that you may inherit such as cars, jewelry or furniture. All of these items are subject to the administration of the bankruptcy estate. However, this doesn’t mean that items like this are certain to go up on the auction block. You can claim exclusion on certain things and the bankruptcy trustee has a certain amount of discretion in choosing what to liquidate. However, it can be extremely stressful to think about a family heirloom that has been in your family for years going to your creditors.
Hopefully your loved one had an Atlanta wills and estates attorney who knew a thing or two about protecting their inheritance from things like bankruptcy, creditors, divorce and the like. Ideally, your loved one would have been advised to set up a trust so any inheritance passed down to their family members would be out of reach from creditors and the courts. If they did not, and you have not filed bankruptcy yet, this may still be an option if your loved one is willing to have their plan looked at by a qualified Atlanta wills and estates attorney.
Planning to avoid giving your hard-earned wealth to creditors is not illegal or immoral either. You should think of it the same way you would when considering tax planning. Tax planning is fine, but tax evasion is not. The difference is whether you play by the rules and are honest. For example, not telling the courts you received an inheritance is illegal and you could face serious consequences. However, you are not skirting the rules if you are the recipient of a spendthrift trust. That wasn’t your choice.
If you or your loved one needs help facilitating such a trust to protect your inheritance from the claims of creditors, simply call our Atlanta and Marietta GA wills and estates office at 770-425-6060 to schedule a Georgia Family Treasures Planning Session at no charge ($750 value). We will walk you through the necessary steps that must be taken to protect your inheritance from a bankruptcy filing or any other creditor’s claim. However, these appointments are limited to 5 per month, so call today.
The face of the American family is changing. As an estate planning lawyer in Atlanta, Georgia, I have certainly seen that change.
Since 1970, the number of what are considered “non-traditional” families (i.e., unmarried opposite sex couples, same sex couples, single parents with minor children and single adults with neither children or a partner) has more than doubled.
And now, with the divorce rate at almost 50%, more and more people are either on their second marriage, getting married later, or have children from previous marriages.
These changes in the structure of the American family have given rise to the need for estate planning options and considerations that had never really been talked about before the 1990’s.
If your life situation falls under the umbrella of the “non-traditional” family, here are a few things you need to take into account when you’re considering estate planning:
1. Marital Status and Your Estate
If something happens to you, your surviving spouse often has a statutory right under state law to receive property from your estate in spite of a valid enforceable will that says otherwise. The key word in this scenario is “spouse”. The person taking from the estate must be considered a spouse under state law. Domestic partners are not entitled to this right (unless your state allows you to register as domestic partners by statute and you have legally registered; Georgia does not have this option at the time of this article).
2. Understanding the Definition of Family Members
Whether or not your partner can be considered a spouse for a specific purpose is determined by state law. For example, in some cases a person can be deemed a spouse for purposes of collecting health insurance benefits from your employer, without being considered your spouse for any other reason. However, state laws with regard to certain benefits are changing rapidly, many in response to the changes in what constitutes a family relationship. Check with your estate planning lawyer to see what the current situation is in your state.
Adoption issues are another area to give serious consideration in your estate plan. In many cases, an unmarried partner has no legal rights or obligations in relation to the other partner’s children if they are not the child’s natural parent or have not legally adopted the child. They are not defined legally as a parent. And the length of time the unmarried partners have lived together makes no difference. Make sure to have provisions for the care of your children in your estate plan and that your wishes are legally enforceable.
3. Property Rights
Every state has laws that specifically deal with the rights, privileges and duties associated with marriage when it comes to real property. While some states are adding statutes to deal with the relationship of domestic partners, most unmarried couples don’t have the same rights and privileges as married couples. That is true in Georgia.
One way to establish a legal relationship between the unmarried partners and provide for legal treatment and transfer of property is through a relationship agreement between domestic partners. If permitted by state law, the agreement can be enforced as a contract and address a multitude of estate planning issues including signature authority, asset disclosure and values, life insurance, health and disability insurance, and the transfer of property. If the agreement is treated as a partnership, it can provide enforceable inheritance rights.
As American society and its view of what constitutes a “family” continues to evolve and change, we will need to be more and more creative in dealing with estate planning and tax issues to make sure that everyone receives the appropriate planning assistance. Talking to a trained estate planning lawyer to make sure all your bases are covered is the best place to start.
If you are a member of a “non-traditional” family and would like to know more about how to provide for your loved ones if something happens to you, call us to schedule your Georgia Family Treasures Planning Session today. We can explain your legal rights and help you plan properly. Our Georgia Family Treasures Planning Session is normally $750, but this month I’ve made space for the next two people who mention this article to have a complete planning session with me at no charge. Call today and mention this article.