So, you’re thinking about estate planning…
In my Cobb County probate and estate planning practice, after naming guardians for their minor children, I ask my clients who they would like as their executor…
Or maybe, someone you know has asked you to be their executor…
If either of these scenarios sounds familiar, it might be a good idea to know exactly what an executor does under Georgia law before you make a commitment either way.
Being an Executor – An Honor and a Burden
The executor of an estate in Georgia is charged with taking care of a person’s final business on earth. You are responsible for protecting the deceased person’s property until all the taxes and debts are paid and making sure that everyone else receives what they’re entitled to under the estate. That can be a huge task or a small one, depending on the size and complexity of the estate.
As an executor, you don’t have to be a legal expert or an accountant but you do have to be honest, impartial and detail oriented. As an executor, you’re charged with a “fiduciary duty” (which means a duty to act in good faith and honesty) in all business of the estate. If you fail to carry out this “fiduciary duty”, you could be held legally liable for that failure. This is a serious consideration when deciding who to name as your executor or whether or not to accept appointment as the executor of someone else’s estate.
Again, depending on the size and complexity of the estate, you could feel like Switzerland in the middle of warring factions for a long time until everything is settled. Make sure your nerves are up to the task before you sign on.
The Daily Business of the Estate
Executors have a lot of work to do to settle an estate, regardless of the size. Some of the things you would be responsible for are:
· Finding and managing the deceased person’s assets until they’re distributed to the heirs of the estate. You may be asked to make decisions on whether or not to sell certain assets or keep them in the estate.
· Determining whether or not the will needs to be sent through probate. If there is a surviving spouse, many of the assets that were jointly owned may pass on to the spouse without the probate process. Always consult an estate planning lawyer to determine what needs to be done.
· Determining who actually inherits property. If you’ve been named as an executor, chances are that your loved one left a will. That makes this part of the process much easier. If your loved one died without a will, you could have a serious chore ahead of you.
· Take care of any necessary court filings. Even if the probate process is not necessary, the will still needs to be filed with the probate court. If it turns out that the estate does need to go through probate, you could have a substantial list of filings to take care of.
· Handling the day-to-day grind. This could be a laundry list of little details that need to be taken care of to close out an estate. You could be cancelling credit cards, notifying the Social Security Administration and Medicare of the death, stopping mail deliveries from the Post Office, determining who takes care of pets, and the list goes on. Make sure you have the time and the ability to handle all these daily details before you agree to the task.
· Setting up a bank account for the estate. If you don’t have signature authority on the decedent’s bank accounts (and you probably won’t), you will need to set up an account to take care of the expenses involved in wrapping up the estate. Any insurance payments, stock dividends or final paychecks will go into this account to pay ongoing bills such as a mortgage or property insurance until the estate is settled and the assets are distributed. A word to the wise – keep thorough records of all sums coming into and going out of this account to head off any potential problems with heirs to the estate.
· Paying taxes. Yes, a final income tax return has to be filed for the deceased person and it will cover the period from the beginning of the tax year until the date of death. If the estate is a large one, state and federal estate tax returns will need to be filed as well.
Being an Executor Requires Commitment
Take another look at the list of duties we just gave you. Stop and seriously think about all the things that would go into settling your estate – who needs to be paid, what needs to be sold, who gets what – and then make a decision on who would be the best person you know to handle all that. Once you have someone in mind, talk to them about it at length. Show them our list and make sure they’re okay with handling this much detail in someone else’s life before you name them as your executor (or before you agree to be the executor of someone else’s estate).
Call us to schedule your Georgia Family Treasures Planning Session today. As part of our Georgia Family Treasures Planning Session, we will sit down with you and go over a list of what needs to be done with your estate and give you an unbiased opinion on your options for an executor. Our Georgia Family Treasures Planning Session is normally $750, but this month I’ve made space for the next five people who mention this article to have a complete planning session with me at no charge. Call us at 770-425-6060 today and mention this article.
As the recession deepens, more Americans are trading high priced attorneys for DIY estate planning kits online. Yet despite the appealing cost, do online estate planning kits really have what it takes to protect your children, assets or wishes should something happen to you? Atlanta estate planning attorney, Steve Worrall, cuts through the hype to reveal when you can go it alone and when DIY planning is a financial disaster in disguise.
ATLANTA, GEORGIA – Who needs a $300 an hour estate planning lawyer when you can buy an entire DIY will kit online for under $100?
That’s the question most Americans find themselves asking lately, as the creation of computer generated wills, trusts and other estate planning documents make DIY planning seem like a very budget-savvy choice.
Yet do these documents really hold weight in the Georgia probate courts and will they truly protect your children, assets or wishes should the unthinkable happen?
“It depends,” says Atlanta family estate planning attorney, Steve Worrall. “Certainly someone with no children and assets under $100,000 could possibly benefit from DIY estate planning. The real problem, though, is that you don’t know what you don’t know and like anything in life, one size rarely fits all. In the case of estate planning, one simple mistake can cost your family thousands of dollars and years of headaches if death or incapacity unexpectedly occurs.” he warns.
So what situations warrant meeting with a qualified estate planning professional over a budget-friendly kit online? Worrall recommends the following:
1. You’ve been divorced or remarried– According to Worrall, DIY kits rarely take into account the complexities of divorce, remarriage or having children from a previous marriage. Without proper guidance, a mistake in this area could cause a number of problems, including a spouse losing out financially to a child from a previous marriage (as was the case with Ana Nicole Smith) or the disinheritance of children.
2. You have children– Worrall recalls reviewing documents from a popular online will kit only to find boilerplate language stating that future children were disinherited under the plan. “My client was horrified, and it really opened my eyes as to just how dangerous these kits can be for parents with minor children,” says Worrall. According to Worrall, DIY kits also fail to advise parents of the best way to leave an inheritance to their children, thus setting the stage for money problems down the road.
3. You’re in an alternative living situation– Gays, lesbians and life-partners should always meet with a qualified professional when planning for their death or incapacity. “Unfortunately, the laws are not on the side of people in non-traditional relationships, so I always recommend professional guidance to ensure your family stays protected physically and financially should tragedy strike,” says Worrall.
4. You have a special needs child– According to Worrall, parents of special needs children must be extremely cautious when using DIY estate planning kits online. “Many parents fail to realize that leaving money outright to a special needs child can jeopardize their ability to qualify for Medicaid or other benefits in the future,” says Worrall. He also warns that such kits fail to properly advise parents of guardianship issues and other ways to make sure their child is properly cared for in their absence.
“It only takes one tiny oversight in a DIY estate plan to cause the entire thing to backfire, or even become null and void in Georgia. And of course, by the time people realize such a problem exist, it’s often too late to go back or costs a fortune to fix, “says Worrall. “I’m a DIY’er myself, but I recognize my limitations. And when it comes protecting your assets, wishes and your children, I encourage others to do the same and seek the counsel of a professional lawyer that can guide them through the process.”
You finally got around to making a will, so now you can rest easy.
You went online, found the forms, filled them out and you’re done. If anything happens to you, your loved ones are taken care of.
One less thing to worry about, right?
As an Atlanta and Marietta, GA wills and estate planning lawyer, I hate to cause you more sleepless nights, but just having a will is not the “be all and end all” of planning your estate.
Let’s clear up a few misconceptions about what your will actually does and doesn’t do:
This is What A Sound Georgia Will Actually Does
Your will distributes property that you own at the time of your death. You can divide up your property any way you choose as long as your state doesn’t prevent you from disinheriting a spouse or children. If you intend to do either of those things, you need to talk to a lawyer and make sure it’s even legal. If you have property that would legally pass outside your estate (things like joint property, life insurance, or retirement plans), you will does not provide for how those assets are distributed unless you’ve made them payable to your estate. Additional estate planning documents are required in order to do that.
Needless to say, there are various types of wills and they can be incredibly simple or terribly complex. A very simple will is called exactly that – a simple will. A will that establishes trusts is usually called a testamentary trust will. If your will leaves assets to a trust created during your lifetime, it is called a pour-over will. If you have either a testamentary trust will or a pour-over will, it should provide for property management and protection from creditors for your heirs and minimize their tax obligations on whatever property they inherit.
Aside from creating trusts and distributing property, you can also designate a guardian for your minor children. If your will is properly written and you’ve set up the right kind of trust and chosen the right trustee to handle your minor child’s estate, the need for court supervision will be limited or even eliminated. The same could hold true if you name an executor. Check with an attorney to ensure that you’re taking full advantage of the laws in your state and that these designations are made in accordance with those laws.
What Your Georgia Will Does Not Do
If you have any nonprobate property, such as real estate that would pass to a surviving owner, or an IRA or insurance policy payable to a named beneficiary, your will does not determine how those assets are passed on. These types of assets are governed by contract law. Just because you list them in your will does not ensure that they will be handled as you’ve requested. Always make sure that your beneficiary designations are up to date and in line with your intentions.
Other types of nonprobate property you will want to account for are any jointly owned property, trusts, annuities, and retirement benefits and life insurance, to name a few.
Makes filling out a form online and thinking you can sleep better at night a little less appealing, doesn’t it? A simple piece of paper will not necessarily ensure that everyone gets what you want them to have and that Uncle Sam doesn’t take more of what you’ve worked for than your loved ones receive.
If you would like an expert opinion on exactly how effective your current will is, or advice on actually drafting a will, call us to schedule your Peace of Mind Planning Session today. We can help ensure you take the right steps to take care of your loved ones if something happens to you.
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 Family Wealth 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.