YOU NEED A WILL
Reasons to Have a Will:
- With a will, you decide how your property will be distributed. You may make any disposition of your property that is not inconsistent with the laws or contrary to the policy of the State of Georgia. If you die without a valid will, your assets will be distributed according to a rigid statutory formula which makes no allowances for your personal wishes. In some cases, the state statue will not direct that your property be distributed as you would have distributed it under a will.
- If your estate is subject to estate taxes, a well-prepared will may reduce them. After death, however, relatively little can be done to alter the tax status of an estate. Tax consequences depend upon the individual case and you should discuss them with your financial advisor. Please note-this firm prepares wills for persons with simple estates only, which are not subject to estate taxes. We strongly urge you to consult a tax advisor if you feel that your estate, including benefits from life insurance policies, may be subject to estate taxes. The current federal limit for 2015 is $5,430,000.00 per person. We will not prepare estate planning documents for estates that are subject to estate taxes.
- You can choose the individual, bank or trust company to serve as executor or co-executors of your estate. That person or entity will manage and settle your estate according to the law and the terms of your will. Without a will, an administrator would have to be appointed by the court to manage and distribute your estate.
- You can eliminate unnecessary expenses and court costs involved in the administration of an estate without a will. For instance, bond premiums can be avoided by simply stating in your will that your executor need not give bond. Real estate and other assets may be sold without court proceedings if your will authorizes it.
- Parents can name those they want to be the guardian of the person and the trustee of any property left to their minor children.
- You can make gifts to charity through your will.
If You Die Without a Will
If you do not have a will, Georgia's inheritance statute will determine who gets your property. The property of a husband who dies survived by a wife and three children will be divided among the wife and children. This can present real problems if you have minor children. The property of a person who dies without a spouse or children will be divided among his or her parents, if they are living. If there are no surviving parents, the property will be divided among brothers and sisters. The probate court will have to appoint an administrator to manage and settle the estate. The cost of administering your estate can be more than the cost of a well-prepared will. When there is no will, the administration of an estate can be complex and costly.
Formal Requirements for a Will
A will is the legal declaration of a person’s intention for the disposition of their property after death. The laws of each state set forth the formal requirements for a legal will.
In Georgia:- The maker of the will (called the testator), must be at least 14 years
- The testator must be of sufficient mind and memory to realize they are making a will disposing of their property.
- The will must be writing (only in extreme instances during the last stages of illness does Georgia law provide for an oral will).
- A valid will must be witnessed by at least two witnesses in the special manner provided by law, and their signatures should be notarized.
- The technical formalities required for the execution of a will must be followed exactly in order to make sure the will is valid and can be probated without problems.
Disposition of Property by a Will
A testator may dispose of their property through their will in any way that complies with the laws or is not contrary to the policy of the State of Georgia.
A testator in Georgia may bequeath their entire estate to strangers, to the exclusion of their spouse and children. If this occurs, the spouse may petition the court for an order of Year's Support. If the petition is granted, the court will set aside property from the estate sufficient to support the spouse and the minor children for twelve months. The practical effect of a Year's Support Order is that all property requested to be set aside will vest in the spouse and minor children forever. There are also certain restrictions which apply to charitable gifts only.
Some interests in property terminate automatically upon the death of the testator. A life estate and property owned in joint tenancy with right of survivorship are two examples.
Special Provisions for Minor Children
If you have minor children, you can put something called a ‘minor’s trust’ in your will. A typical will leaves all property to the surviving spouse. If you have children, most wills provide that the children inherit the estate when the second spouse dies. If you have minor children, you can name trustees to manage any money they may inherit under your will. The trustee manages the money until the children reach a certain age, or ages. Many minor’s trusts provide that the children receive half of the money in the trust at a certain age, say age 25, and the remainder later, say age 30. The trustee can use the money in the trust to benefit the minors and provide for their education and maintenance until they reach the ages of distribution. If a minor inherits money when there is no minor’s trust in the will, a conservator would have to be appointed through the probate court to manage their money.
You can also appoint a guardian over the person of your children in your will if both you and your spouse pass away. This person would have the duty of caring for your children and raising them. The guardian and trustee can be the same person, but they do not have to be. You can also name alternate trustees and guardians as well, in case your first choice cannot serve for any reason. Without this provision in your will, a guardian would have to be appointed through the probate court.
Proper will preparation, with these important provisions, will make sure that your wishes are carried out if you or your spouse are no longer around to care for your children.
Probate Expenses, Cost of a Will
In Georgia, there is typically no need to avoid probate through the preparation of family trusts and similar documents. Court costs are low and the probate procedures are fairly simple. The cost of a will may be much cheaper than the preparation of trust documents, and trust documents typically require a will anyway to convey any assets into the trust that have not been conveyed to the trust prior to death. Advanced trust and estate planning documents are a necessity for estates that are over the federal estate tax limit, but they are not required for smaller estates.
Lawyers usually set their fees based on hourly rates. The amount of time needed to prepare a will depends on the complexity of each case. I usually charge a flat fee which I will quote you after a consultation.
Expiration and Validity of a Will
A will does not become final until death. It may be changed or amended by signing a new will or a codicil, which is an amendment executed with the same formalities as a will. A will cannot be changed by writing something in or crossing something out after it has been executed. This could void the will. You should never write on your will or cross anything out after it has been executed.
Changing a Will
Under Georgia law, a child born or adopted after the will has been made revokes a will, a divorce revokes a will, and marriage revokes a will unless the will specifically states otherwise. Changes in the testator’s circumstances require a careful reconsideration of all provisions of the will and may make a change to the will advisable.
Life Insurance and Wills
Life insurance is only one kind of property that a person may own. It is not a substitute for a will. A will is still needed to dispose of the rest of one’s property. If the life insurance policy is payable to the estate of the insured, the disposition of the proceeds can be controlled by the will. (If a policy is payable to an individual, however, the will of the insured has no effect on the proceeds.) Also, life insurance proceeds are added to the calculation of the value of your estate to determine if the value of your estate is high enough to be subject to estate taxes.
Joint Ownership and Wills
Joint ownership of real property is an estate planning tool, but it is not a substitute for a will. Joint tenancy of real property may help the first spouse that dies avoid probate, by automatically conveying the marital residence to the surviving spouse. You will need a will for distribution of the property when the second spouse dies. Joint tenancy does not provide for the distribution of the joint property in the event of a common disaster. Only a will can do this.
Persons Who Should Prepare a Will
Drafting a will involves making decisions requiring professional judgment which can be obtained only by years of training, experience and study. A practicing lawyer with experience in the field can avoid problems that may need to be addressed, and advise the client on the course of action best suited for their individual situation. It is relatively simple for a lawyer to draft the custom provisons that might be necessary for your particular situation that are not contained in the boilerplate language typically found in pre-printed or internet wills. They may be cheaper, but they may cost you much, much more in the long run. I receommend that you avoid do-it-yourself wills as they may create many problems.
Advance Directives and Wills
The State of Georgia recognizes the right of a competent adult person to make a written directive, known as Advance Directives, instructing his physician to withhold or withdraw life-sustaining procedures in the event of a terminal condition. Advance Directives let you nominate an Agent or Agents to make medical decisions for you in the event you are unable to do so. The power granted ceases at your death. Advance Directives have absolutely nothing to do with the distribution of your proprerty after your death. You still need a will to distribute your property after death.
Financial Powers of Attorney and Wills
The State of Georgia recognizes the right of a competent adult person to make a written directive, known a Financial Power Of Attorney, to nominate an Agent to make financial decisions, convey real property, and handle many other financial matters. The power granted ceases at your death. A Financial Power of Attorney have absolutely nothing to do with the distribution of your proprerty after your death. You still need a will to distribute your property after death.
Notes About Wills:
- A will signed in another state will usually be valid in Georgia. However, if you have moved here from another state, you have your will reviewed by a Georgia lawyer in order to make sure that it is properly executed according to Georgia laws and that your executor is qualified to serve in this state.
- An improperly executed will may be void. This could definitely cause complications when it is time to probate when it is too late to correct them.
- Tax laws change. If you have an old will that was prepared under old tax laws, you should have your will reviewed to determine what, if any, action should be taken in light of the new laws.
Notes about Advance Directives and Financial Powers of Attorney
- Unlike Wills, Advance Directives and Financial Powers Of Attorney are Georgia creations, established by the Georgia Legislature to assist the citizens of the State of Georgia.
- While a Will directs the disposition of property at your death, Advance Directives and Financial Powers Of Attorney are designed to assist you while you are still alive but may not be able to communicate your wishes or act on your own behalf.
- A proper approach to simple estate planning should include all three documents, and that is why I recommend the preparation and executions of all three documents to all of my clients.
Joint Tenancy Deeds, Insurance Policies, Investments, and Bank Accounts
Joint Tenancy Deeds
A Joint Tenancy Deed can be a valuable estate planning tool. When you are planning to get your will and supporting documents drawn, you should also check to make sure that you and your spouse own your real property as Joint Tenants with Right of Survivorship, and not as Tenants in Common. Tenancy in common will require that probate occur when the first spouse dies. With many couples, this could be an unnecessary expense if you already jointly own most of your property. An interest in real estate can only pass by deed or through the probate or superior court. If your property is not held as Joint Tenants, we recommend that you execute a new deed at the time your will is prepared to correct that problem. The cost of preparing a deed is minimal compared to the cost of probate. You may be able to avoid probate on the first estate, and only incur probate expenses when the second spouse passes away.
Insurance Policies
An insurance policy is a contract between you and the company to pay money to beneficiaries that you select upon your death. Your will does not control who gets the money unless the beneficiary of the policy is your estate, i.e. “The Estate of John Doe”. You should review your beneficiaries when you get your will prepared. If you have three children, and name only one as beneficiary, that child will get the money and there is probably nothing the other children can do about it. You could also name all of your children as beneficiaries, and the proceeds would be divided between them. If you have minor children, and you have included a minor’s trust in your will, it may be better to make your estate the beneficiary of the policy to insure that your wishes contained in your will are carried out. This is something you need to talk to your insurance company or agent about.
Investment and Retirement Accounts
The same rules that apply to insurance policies also apply to investment and retirement accounts. You should review your beneficiaries when you get your will prepared. Talk to your investment advisor, plan manager, or agent.
Banks
If you have a bank account that is 'payable on death', or 'POD', the person listed on that account may be the one that gets all the money in that account when you pass away. You need to talk to your bank and make sure your account is set up the way you want it. Also, many banks refuse to honor Financial Powers of Attorney, even though they are legal. Many banks use the excuse that your account is regulated by the documents you signed when you opened the account, which may require you to execute the bank's own documents to grant powers or allow someone else to access your funds. You should review your bank accounts with your bank at the time you get your will and other documents prepared to make sure that your Financial Power of Attorney is acceptable to the bank. They may make a copy and put it in your file, or they may suggest you execute their document. If someone not on the account shows up at a bank with a Power of Attorney the bank knows nothing about, they may not honor it. Check with your bank.