By Steve Worrall, Cobb County Probate Lawyer
Avoiding probate in Cobb County, Georgia, is a very real concern for people who want to make sure certain assets such as stocks, bonds, brokerage and bank accounts automatically pass to their heirs upon their death.
In such a scenario, Transfer on Death Agreements (also known as TOD’s) can be a very useful and convenient estate planning tool in making sure your loved ones are financially taken care of in your absence.
Essentially, Transfer on Death Agreements allow you to pass ownership of your accounts directly to a beneficiary of your choosing when death occurs. Without such designations, each account would have to go through the probate court before it can be distributed to your desired heirs.
Yet you may be wondering, “What’s wrong with going through Cobb County probate and why bother with tools such as TOD’s to avoid it?”
Well for starters, many people wish to avoid involvement with the Cobb County Probate Court simply because it could take a year or longer before the funds actually reach your desired beneficiaries. This is problematic for families who desperately need the assets to pay for burial expenses, outstanding medical bills, mortgage payments, and general living expenses.
Not to mention, the value of your assets passing through probate may be reduced by as much as 5%, as mandatory attorney and court fees will be taken directly out of the estate.
Finally, one of the greatest drawbacks of probate is that the value of your assets will be made public for the whole world to see. This aspect of Cobb County probate is especially troublesome for people who do not want every scam-artist or busybody in town knowing what their heirs stand to inherit upon their passing.
Yet it is important to remember that while TOD agreements will help you avoid probate on some of your assets, it won’t help you avoid probate on the rest of your personal effects such as jewelry, collections, family heirlooms, the contents of your home, etc.
Nor will TOD agreements help you minimize the amount of estate taxes your family might have to pay upon your passing or protect your assets if incapacity and not death occurs.
That’s why it’s so important you speak with a Cobb County probate attorney before making any decisions about your financial or legal affairs. While a TOD is indeed a useful estate planning tool that can help you avoid probate, it may not be the best – or the only tool your family needs to ensure they are protected should something unexpectedly happen to you.
Fortunately, we’ve made the process of meeting with a Cobb County probate lawyer easier than ever by offering free Georgia Family Treasures Planning Session (normally $750) to anyone that takes the time to read this informational article. However, these sessions are limited to 10 per month, so call 770-425-6060 to reserve your spot today.
By: Steve Worrall, Atlanta special needs attorney
As an Atlanta special needs attorney, I’m often asked, “What exactly is a Special Needs Trust?”
For starters, a special needs trust is legal entity created to hold assets of a person with a mental or physical disability. The trust names a trustee whose job is to manage the assets and distribute them according to the provisions of the trust. There are specific limitations on the way assets can be distributed so that they do not disqualify the beneficiary from eligibility for government programs.
There are two primary types of special needs trusts. They are:
Self Settled Special Needs Trusts
In a self settled special needs trust the assets in the trust belong to the beneficiary. For example, if the person becomes disabled due to negligence of a doctor or car accident, it is possible that the beneficiary received a settlement as a result of litigation. In this case, a self settled special needs trust would be created for the beneficiary to receive and hold the settlement funds in order to preserve government benefits.
Third Party Special Needs Trusts
A third party special needs trust is created by a third party with assets that belong to the third party. For example, the parents of a child born with Down syndrome or autism might create a special needs trust for their child as a part of their overall estate plan. In the case of a third part special needs trust, family members may make lifetime gifts to the child.
Distributions for Special Needs Trusts
In order to preserve government benefits it is important to direct the trustee not to pay for services that are provided by a government agency. If done correctly, the assets in the special needs trust will not be counted as a resource. The trust must authorize distributions only for special or supplemental needs. Some examples of this might include dental care, specialized therapy, and services of a care giver. Improper distributions of a special needs trust can cause a loss in government services, so it is critical that the trust be set up and then managed properly.
Who Should Create a Special Needs Trust?
Not all Atlanta estate planning attorneys have the training, expertise or knowledge to create a special needs trust. You should consult with an attorney who is experienced in creating these trusts and who knows how to properly advise trustees.
By Steve Worrall, Marietta Elder Law Attorney
If you watch television at all, you can’t miss the increase in ads for Medicare prescription drug coverage.
What you might not know is that the open enrollment period for this coverage expires December 31st.
If you (or your parents) are eligible for Medicare, you need to take advantage of this coverage now or you’ll pay more for it later.
Space does not allow us to break the whole plan down for you, but here’s some information to help you sort out your options.
What Is The Medicare Prescription Drug Plan?
Medicare Part D allows people covered by Medicare to buy additional insurance coverage to help them pay for their prescription medications. Medicare works with various insurance companies to provide this benefit and it’s available to everyone with Medicare regardless of income, your medical conditions or how much your prescriptions cost.
Where To Go For Additional Information
As with most government programs, the Medicare Prescription Drug Plan can be confusing. The following resources are available to help you sort out the best plan for your needs:
www.medicare.gov – This is the official site for people covered by Medicare.
Medicare & You – This is a brochure containing information about various prescription drug plans, how to compare the plans and how to apply for extra assistance.
www.medicare.gov/MPDPF/Home.asp – This is an online tool that helps you compare various plans side by side to decide which plan will work best for you.
www.yourpharmacybenefit.org – This website was created to help people make the best use of their prescription benefits.
www.mymedicarematters.org – This provides basic information on Medicare and what it covers so you can decide what, if any, additional coverage you need.
www.benefitscheckup.org – This website is provided by the National Council on Aging and gives information on any changes to the eligibility requirements and what Medicare actually provides. You may be eligible for benefits you aren’t even aware of.
All of these resources are available, free of charge, on the internet. If you have any additional questions, contact Medicare directly at 1-800-Medicare to speak with someone who can help you, one on one.
With all the talk about the future of the Bush tax cuts, one aspect of taxation that isn’t getting quite as much press is the reappearance of the estate tax.
As of January 1, 2011, the estate tax will once again rear its ugly head and take a serious bite out of your estate when it does.
If your estate is valued at $1 million or more (for individuals, not married couples), you can expect your heirs to be hit with a tax bill of 55%.
Here’s a quick and dirty list of things you need to seriously think about before January 1st:
1. Don’t Count On Congress.
The issue of the estate tax may not be resolved any time soon. The Bush tax-cut extension is such a hot button issue and is generating so much press, no one is sure what will result from it. An increase of the estate tax exemption to $5 million is included in the Obama tax plan, but the House and Senate would both have to agree to it for that to become law. The end of the year is only about 3 weeks away and there’s still a lot of squabbling on Capitol Hill about this issue.
2. Plan For The Worst Tax Rate.
Plan your estate based on the worst case scenario. The smart money is on some change in the estate tax for 2011, possibly going back to the 2009 individual exemption and tax rate, but no one really knows what will happen. With the government facing a serious budget crisis, it is highly unlikely that the tax will be repealed and eliminated. No one in government is going to let go of that kind of revenue.
3. Take Advantage Of Every Possible Loophole.
If you or a loved one is critically ill, talk to your estate attorney now. Ask about the possibility of annual gifts of cash (up to $13,000 tax free), securities, property, medical care payments, or even tuition, before year end. If your assets are still at issue, ask about generation-skipping trusts or the formation of other trusts. It may cost you some in taxes but gift tax rates this year are 35%. They will probably never be that low again.
4. Talk To Your Lawyer Now.
Any of the potential changes in the estate tax can have an adverse effect on your estate and the future of your heirs. And none of the options to handle the tax can take place overnight. Talk to your attorney as soon as possible to get your plan in place.
You can’t “wait until after the holidays” to deal with these tax issues. It can take weeks to transfer accounts or securities or even gifts. Talk to us now to get things rolling and make sure your bases are covered, regardless of what Congress does or doesn’t do.
Call us, your Marietta estate planning lawyers, to schedule your Georgia Family Treasures Planning Session today. We can advise you about the steps you need to take now to protect your estate and continue to advise you when Congress finally on the future of the estate tax.
A Georgia Family Treasures Planning Session normally costs $750, but this month I’ve made space for the next four people who call us before December 31 and mention this article to have a complete planning session with me at no charge. Call today and mention this article.
Resolving to get your legal affairs in order is one of the most important things you can do to make sure your family, wishes and assets are protected if something unexpectedly happens to you this year.
Marietta, Georgia- While many people focus on getting out of debt or getting organized for the New Year, estate planning is an equally important personal finance goal that should make every adult’s to-do list.
That’s because according to Marietta estate planning lawyer, Steve Worrall, far too many area residents are without plans to protect their family, wishes and assets should something unexpectedly happen to them. A recent Lawyers.com survey further reveals that only 35% of adults have a basic will or other estate planning documents in place should death or incapacity occur.
“Contrary to popular belief, estate planning isn’t just for the rich,” says Worrall. “At a bare minimum, every adult needs a basic will, power of attorney and health care directives in place to avoid a legal and financial nightmare if something unexpectedly happens to them,” he adds.
So what are these documents and how do they help you in a time of emergency? Worrall explains the following:
- Will- A will is a document that specifies what should happen to your assets if you pass away. A will may also contain guardian nominations to dictate who will care for your minor children if something unexpectedly happens to you.
- Trust- A trust is a legal entity that can hold title to property. With your assets securely placed in a trust, you can minimize your financial exposure to lawsuits, divorce and bankruptcy while alive. Upon death, a trust will keep your affairs private and out of the probate court. It also allows a great deal of control for people who do not want their inheritance going outright to their heirs if something unexpectedly happens.
- Power of Attorney- A power of attorney or POA gives explicit permission for someone to access your personal accounts, pay your bills and handle all other financial and legal affairs if you are incapacitated in an accident but do not die. Under the current privacy laws, even a spouse may have a hard time accessing personal information without such documentation in place.
- Advanced Health Care Directive- Also known as a living will, this document specifies your healthcare wishes if you are incapacitated in an accident and unable to speak for yourself. Such wishes may range from whether you want certain medications administered to when (if at all) to start life support in critical situations. This document also allows you to appoint the person best suited to carry out such wishes should incapacity occur.
“Accidents and serious illness happen every day without warning,” says Worrall. “That’s why it’s so important for any adult who has not tackled their estate planning to add it to their resolutions this year. It will save their family from years of headaches and thousands of dollars in unexpected costs should the unthinkable happen”.
About Steve Worrall
Stephen M. Worrall is an experienced family law and wills, trusts and estate planning attorney in Marietta and Atlanta, Georgia. He concentrates his practice in all areas of family estate planning, including including wills, trusts, guardians for minor children and incapacitated adults, probate and trust administration, and all areas of family law, including divorce, adoption and prenuptial agreements. He also helps families plan to protect their assets and their children in the event of their death or incapacity, and to transfer their whole wealth – their financial, intellectual, and spiritual assets – to their loved ones.