Category Archives for "Estate Planning"

Protect IRA

Protecting a Vulnerable IRA Beneficiary

Most IRA owners want the person they’ve named as IRA beneficiary to delay the payment of income taxes for as long as possible. For a vulnerable IRA beneficiary, there is a secondary goal of passing the IRA account in a way that protects the income tax deferral, but also ensures the IRA itself will not be misspent.

If the individual you’ve named as beneficiary of your IRA would not have the ability to make good financial decisions because of dementia, other health issues, inexperience, or just a history of poor money management, leaving outright control of the IRA to that beneficiary does not make sense.

A spouse can treat an inherited IRA like their own retirement account, and roll it over into a new or existing IRA, or leave it as an inherited IRA. Either option allows continued income tax deferral. If the spouse didn’t follow the rules on a timely basis, the benefits of the income tax deferral would be in jeopardy.

The same tax concern applies to non-spouse beneficiaries who can elect to take required minimum distributions over their life expectancy.  Incapacity or poor decision making would put income tax deferral at risk.

For many retirees, their IRA is a significant part of their net worth. Why leave something you’ve worked a lifetime to accumulate to a beneficiary who would not understand the importance of income tax deferral, or be able to preserve and protect the IRA?

The way to protect the income tax deferral and protect the IRA itself is to name a qualified trust for the vulnerable beneficiary as the beneficiary of the IRA.  A trust that meets the requirements of a “designated beneficiary” receives the same income tax deferral as if the individual was named as beneficiary, and a trust provides protection against creditors and predators. The Trustee would make the decisions regarding income tax deferral and investment choices, and would distribute appropriate amounts for the beneficiary’s needs either to the beneficiary, or if the beneficiary would not be capable of paying bills, pay them directly from the trust.

Do you need to update your estate planning to protect your beneficiaries? Reach out to schedule an appointment with our expert Estate Planning Attorneys.  Call us at (770) 817-4999 or click here to send us a message.

SECURE Act

The SECURE Act: How It Will Affect You and the Beneficiaries of Your Retirement Accounts

The SECURE Act, which was effective January 1, 2020, is the most impactful legislation affecting retirement accounts in decades.

The SECURE Act has some positive changes: it increases the required beginning date (RBD) for required minimum distributions (RMDs) from your individual retirement accounts from 70 ½ to 72, and it eliminates the age restriction for contributions to qualified retirement accounts.

The SECURE Act also has a very significant change that will impact your retirement account beneficiaries: it requires most designated beneficiaries to withdraw the entire balance of an inherited retirement account within ten years of the account owner’s death.

There are exceptions to the ten-year withdrawal rule: spouses, beneficiaries who are not more than ten years younger than the account owner, the account owner’s children who have not reached the “age of majority,” disabled individuals, and chronically ill individuals.

Under the old law, beneficiaries of inherited retirement accounts could take distributions over their individual life expectancy. Under the SECURE Act, the shorter ten-year time frame for taking distributions will result in the acceleration of income tax due, possibly causing your beneficiaries to be bumped into a higher income tax bracket, and receiving less from your estate than you may have originally anticipated. 

Your estate planning goals likely include more than just tax considerations. You might be concerned with protecting a beneficiary’s inheritance from their creditors, future lawsuits, and a divorcing spouse. In order to protect your hard-earned retirement account and the ones you love, a trust is a great tool to provide continued protection of a beneficiary’s inheritance.

Although this new law may be changing the way we think about retirement accounts, there are still some tools to minimize the impact of the accelerated income tax:

If you are charitably inclined, now may be the perfect time to review your planning and use your retirement account to fulfill these charitable desires, while providing a life time income to your beneficiaries through a Charitable Remainder Trust. 

In past years when many estates were impacted by federal estate tax, a common technique was to purchase life insurance through an irrevocable trust to fund the tax payment. This technique can now be used to replace the inheritance lost to income tax acceleration.

We will be holding a presentation in our office on the impact of the SECURE ACT for our Maintenance Plan clients.  If you would like information on joining our Maintenance Plan, please call our office at (770) 817-4999.

If you would like to schedule an appointment with one of our attorneys to review the impact of the SECURE Act on your beneficiaries, please call (770) 817-4999 to schedule that appointment.

New Year's Resolution For A Will 2020

How About A New Year’s Resolution To Finally Get A Will?

Married couples often believe they don’t need Wills because if one of them died, everything would simply pass to the survivor. Whether that happens depends on how the assets are titled or if there is a designated beneficiary. If there are assets titled just in the deceased spouse’s name, with no beneficiary, it isn’t that simple.

If a married person with children dies without a Will, Georgia inheritance law directs that those assets pass in equal shares to the surviving spouse and the children, with the spouse receiving a minimum one third share.

For example, if a woman married a man who had two children, and moved into the house he owned, when her husband died without a Will, she would find that her stepchildren now owned two thirds of that home.

In Georgia, for the ownership of real estate to pass automatically to a surviving owner, the Deed must state that it is joint with right of survivorship. If it does not say that, then each owner owns a percentage. In the same example, if her husband added her to the Deed as an owner, but did not include the provision that it was with right of survivorship, then after his death she would continue to own her one half, but she would inherit only one third of his one half, with his children inheriting the other two thirds. Still not a great result for her.

If her husband had written a Will, he could have left her full ownership of the home, or at least the right to live in the home for her lifetime.

This is just one example of the unpleasant results that survivors face because someone they loved and trusted died without a Will. It may not be pleasant to think about your own mortality, but writing a Will is the responsible thing to do for the people you love. If you haven’t gotten around to having your Will prepared, how about a New Year’s Resolution to finally get a Will next year?

Not sure exactly what you need for you and your family? A trusted Estate Planning Attorney can help!  Reach out to schedule an appointment with our expert Estate Planning Attorneys. Call us at (770) 817-4999 or click here to send us a message.

Things to continually review in your Estate Plan

Things To Continually Review In Your Current Estate Plan

October 21-27, 2019 was Estate Planning Awareness Week. Now that summer vacations are over and the kids are back in school, it is a great time to review or move forward with your estate planning. Because estate planning is a comprehensive plan and not just a single document, it is important to regularly review all aspects of your plan, your finances, and your family’s needs.

We put together a list of the top things you should review when looking at your current estate plan.

Beneficiary Designations: For assets such as life insurance and retirement accounts, the beneficiary designation form is a crucial document. If these documents are not filled out properly, the wrong or unintended person could end up with the asset, completely unraveling your estate plan. As a result, it is a good idea to review these documents periodically to make sure that the correct beneficiary is named. Life can change quickly, and sometimes changing beneficiary designations is the last thing on anyone’s mind.

Temporary Guardianships: In many states, a parent or legal guardian has the ability to appoint a temporary guardian for a minor child for a limited period of time. This appointment allows the temporary guardian to make decisions on behalf of the minor as if he or she were the child’s parent, without court involvement or approval. This document can be helpful if a minor child is going to be staying with a relative or close friend for a period of time because a parent or legal guardian is on vacation or otherwise unavailable. If you live far away from family, it may also be a good idea to have a friend or trusted neighbor have a temporary guardianship for your children. However, this appointment is usually only valid for a short period of time (up to twelve months in some states) and needs to be re-signed regularly. If you have children, you should have a temporary guardianship and make sure that this document has not expired.

Ensuring proper ownership (“title”) on property: If you have a trust as part of your estate plan, you have to ensure that the assets that are intended to be owned by your trust have either been retitled in the trust’s name or will transfer to the trust automatically at your death. To make sure that this is done, check your beneficiary designations, account statements, and any other documents associated with your assets. If you have not properly funded your trust, those assets will go through probate, which can be a time consuming and expensive process. If you are unsure and need help reviewing the ownership of your property, we are happy to help.

Your Appointed Decision-Makers: Proper estate planning involves a lot of moving parts and people. You have probably named a Successor Trustee in your trust, an Attorney-in-Fact (“agent”) under your Financial Power of Attorney, and a Patient Advocate (“proxy” or “healthcare agent”) under your Medical Power of Attorney. Depending upon how long it has been since you first prepared the documents, it is important to review your decisions and make sure that these individuals are still able to act on your behalf if you need them to. Just like your life has gone through changes, these individuals may have had a change in circumstances that make them less able or desirable to serve in these important roles.

Important Information for Trusted Decision Makers: While your estate planning documents appoint individuals to act on your behalf and give them the authority to do so, they sometimes do not contain all of the necessary information to handle your affairs, manage your finances, or make decisions on your behalf. As you review your estate planning documents, it is also a good idea to compile a “road map” for your fiduciaries. Some of the information you may want to consider including is:

● Your social security number
● Your doctor’s names and contact information
● Your pertinent medical information, including care providers and medications
● Your professionals’ (accountant, financial advisor, life insurance agent, etc.) names and contact information
● Bank account numbers
● Where to find your important documents
● Contact information, dates of birth, and social security numbers for your children
● Information regarding your pets

By compiling this information and making it accessible to your trusted decision-makers, you can help them be better prepared to carry out their roles.

Schedule a Meeting with Us

Life changes pretty quickly. It is always a good idea to periodically review your estate planning documents to make sure they reflect any changes that have occurred in your personal life or in the law. In some cases, it can be beneficial to schedule a time for us to review the documents together. If there have been any marriages, divorces, deaths, births, etc. in your family, this can impact your estate plan, and it is crucial that the instructions in your estate planning documents reflect your wishes.

We are here to offer peace of mind to you and your family while you are alive and to your loved ones after you have passed. Give us a call at 770-817-4999 or message us here so we can make sure that everything will still work as intended to achieve your goals. If you do not currently have an estate plan, we are here to guide you and help craft a plan that will protect you and your loved ones.

National Estate Planning Awareness Week

Estate Planning Awareness Week: The Importance to You and Your Family of Having an Estate Plan

In 2008, Congress recognized the need for the public to understand the importance and benefits of estate planning by passing House Resolution 1499, which designated the third week of October as National Estate Planning Awareness Week. Nevertheless, according to a 2019 survey carried out by Caring.com, 57% of adults in the United States have not prepared any estate planning documents such as a will or trust despite the fact that 76% viewed them as important. Many of the respondents said this was due to procrastination, but many others mistakenly believed that it was not necessary because they did not have many assets.

Why should you have an estate plan?

An estate plan can provide significant peace of mind by ensuring your assets are protected, plans are in place in the event you become ill, and your property is passed down according to your wishes.

What key topics should you consider?

  • Do you have a last will and testament and/or a trust? If you do not have these important documents, state law will determine who will inherit your property—and thus it may not occur in the way you would have chosen. In addition, someone appointed by the court, instead of a trusted person of your choosing, will be in charge of caring for any children or pets. Spelling out your wishes in a will or trust will also prevent unnecessary confusion, anxiety, and expense for other family members when you are gone.
  • Have the proper powers of attorney been prepared? A financial power of attorney will allow you to designate an individual to make financial and property decisions for you should you become unable to handle your own affairs. A medical power of attorney enables you to designate a person you trust to make medical decisions for you when you are otherwise unable to speak for yourself.
  • Make sure that you have an advanced directive, also called a living will, which memorializes your wishes concerning your end of life care, such as whether you would like to receive life support if you are in a vegative state or terminal condition.
  • Do you have insurance? If you become incapacitated or die, it is important for your family or loved ones to have information about your insurance (such as life, health, disability, longterm care, etc.) so that claims can be filed.
  • Compile a list of all of your accounts and other important information, including bank and investment accounts, titles to vehicles and homes, credit card accounts or loans, digital accounts (such as Facebook, LinkedIn, and Twitter) and passwords, Social Security cards, passports and birth certificates, which may be needed to manage your property when you are incapacitated or settle your estate once you are gone. This information should be kept in a safe place and shared only with trusted family members or loved ones.
  • A list of legal, financial, and medical professionals who have performed services for you is also important. The list should include their contact information so your family can easily reach them in the event their help is needed if you become disabled or die. If desired, you should also ensure HIPAA authorizations are in place with medical professionals to ensure your family members are able to obtain needed information.

How should you encourage your family members to create an estate plan?

Estate Planning Awareness Week is a great opportunity not only to take steps to make sure your own estate plan is in place, but also to talk to your family members, especially elderly parents, about creating an estate plan. Estate planning is often a difficult topic to broach, as it brings the unpleasant topics of aging and death to the forefront of our minds. Here are a few tips to help you start the conversation.

  • Be sensitive to your family members’ feelings. Put yourself in their shoes, and keep in mind that few people are eager to dwell on the subject of their own death. One way to begin the conversation is to talk first about the need to plan for an illness and to provide instructions in the event they become too ill to communicate with doctors or handle financial matters for themselves. The conversation can then naturally progress to the importance of having an estate plan that will enable their assets to be transferred in the way that they wish, provide for the care of any dependents or pets, and minimize any taxes, court costs, and legal fees. Communicate that you are not trying to control their decisions, but only want to ensure that their own wishes regarding their medical care and their property are known—and that all their instructions are in writing to guarantee they are carried out.
  • Involve other family members in the conversation. If you are planning to speak to your parents about the need for an estate plan, it is important to try to include any siblings in the discussion to avoid giving the impression that you are trying to influence or control your parents’ choices. You and your siblings should emphasize to your parents that none of you are asking about what you will inherit, but just want to make sure that their wishes are carried out if they become ill or pass away.

Consult an estate planning attorney. An experienced estate planning attorney can help you and your family members create an estate plan tailored to meet each of your unique needs and carry out your wishes—or help you update a pre-existing estate plan. We can provide each family member with guidance and information about the options available to them. We can help each of you put a plan in place that will prevent unnecessary stress, legal expenses and taxes, uneven inheritances, disputes between family members, and delays in passing life savings on to loved ones. In addition, it will provide you and your family members with the peace of mind that comes with knowing there are plans in place for your care if any of you become ill and that your wishes will be honored once you pass away. Call us today at 770-817-4999 or click here to set up a meeting.

Power of Attorney for Dad

You Are Named As Dad’s Power of Attorney, What Does That Mean?

As our population ages, more and more adult children find themselves having to help a parent or other elderly relative deal with legal and financial matters. To legally authorize that help, the senior should have a valid Power of Attorney.

The Georgia Power of Attorney statutory form explains that when someone accepts authority under a Power of Attorney, a special legal relationship is created between the agent and the person signing the document, who is called the principal. That relationship imposes legal duties on the agent.

If the agent knows what the principal’s expectations are for the agent in dealing with the principal’s affairs, the agent is supposed to carry out those expectations. If the principal has not communicated any expectations, the agent is supposed to act in the principal’s best interest and in good faith.

An important rule in acting as an agent is the rule against self-dealing. Don’t benefit yourself to the detriment of the principal. Avoid conflicts that impair your ability to act in the principal’s best interest.

Keep careful records of all receipts, disbursements and transactions.

If it becomes your responsibility to manage the principal’s investments, the principal’s financial advisor could be a helpful resource. If there is no financial advisor and you don’t have experience with investments, see if the Power of Attorney authorizes you to retain professional help.

If you are not the principal’s health care agent, communicate with the health care agent to make sure the principal is receiving proper care, and that you and the health care agent are in agreement on the long term care plan, based on expenses the principal can afford.

When you are signing on behalf of the principal, be sure to disclose your identity as agent by signing the principal’s name, and your name as agent.

Georgia law authorizes an agent to be reimbursed for reasonable expenses. For the agent to receive compensation, the Power of Attorney must specifically authorize compensation.

If you have questions or concerns regarding your responsibilities, you should consult with the attorney who prepared the Power of Attorney.  If you need help in creating a Power of Attorney or have more questions about how to properly create the right Estate Plan for your parent or yourself, please click here to contact.

Widow

How You Can Help A Widow

The day before my husband’s funeral, two of his friends came and mowed the lawn. Two weeks after the funeral, the grass had grown and needed mowing again, but no one came to help. It was nice of them to help before the funeral, but it was in the months after the funeral that I truly needed help. I didn’t even know how to start the lawnmower, but I had to put aside my grief and figure it out.

Most married couples are a team, with each team member handling certain tasks. If you have a relative, friend or neighbor who has lost her husband, and aren’t sure how to help, think about what responsibilities her husband probably handled for their team.

Was he in charge of all the bill paying? If he paid the bills online, and she’s a bit intimidated by computers, you could take the time to show her how to manage online bill pay and help her set up a system she can master.

If her husband handled the minor household maintenance and repairs, tell her to call you when a light bulb needs to be changed, and you’ll be happy to climb the ladder to get that done. You could stop by her house occasionally to see if there’s some little task that might be daunting to her, but easy for you.

If something needs to be done that requires expertise, you could help her find a reputable company to do the job. A woman living alone after years of marriage might feel insecure in dealing with workers alone. She’s used to having a second set of eyes on projects so your opinion could provide reassurance that things are being done properly, or another voice to make objections if they are not.

Too often people don’t know what to do when someone they care about has been widowed, so they don’t do anything, and then feel bad about not offering help. Be someone who asks what you can do to help. She’ll appreciate the offer.

Becoming a widow or widower is not something anyone wishes for or that can be predicted.  It’s important to make sure your loved ones are taken care of and protected if they find themselves in that position.  Attend one of our Free Workshops to educate yourself on how you can protect your stuff in 3 easy steps.  We invite you to register today and take the first step in knowing the right documents you need to protect you and your loved ones.

Protect IRA Taxes

Protect Your IRA For Your Young Beneficiaries

Because the income tax on an IRA is deferred, a beneficiary who inherits an IRA is required to either:

  • withdraw all the funds within 5 years of inheriting and pay the income tax due on the entire account; or
  • take annual required minimum distributions (“RMD”) and pay income tax only on the annual distributions (“stretching” an IRA).

The reality is that most young people who inherit IRAs aren’t thinking of their future, so they withdraw all the funds and pay income tax on the entire account. All the benefits of income tax deferral are lost.

If your beneficiary is under 18, you’ve added more costs and complications to the mix. A minor child can’t legally manage assets, so a Conservator would have to be appointed by the Probate Court. Unless there are other funds available to pay the attorneys fees, court costs and the premium for the required surety bond, at least some of the IRA would have to be liquidated, resulting in additional income tax plus the 10% penalty. At age 18, the child becomes a legal adult, takes control, and probably chooses to liquidate the balance of the IRA. That means the entire IRA is subjected to income tax and the 10% penalty, on top of the court costs, legal fees and bond premium that were already paid for the Conservatorship.

Even if a beneficiary over age 18 is tax smart, and chooses to stretch the IRA and take only the RMD, the IRA is still at risk. In 2014, the US Supreme Court ruled that an inherited IRA does not have creditor protection. That means the entire IRA would still be at risk to the beneficiary’s creditors or an ex spouse in a divorce.

There is a way you can protect the tax deferral, avoid the costs of a Conservatorship, and provide creditor protection for your young beneficiaries. A trust with the right provisions allows the RMD stretch, avoids a Conservatorship, and protects the account from creditors and divorce.

Not sure exactly what you need for you and your family?  Does a trust even make sense for your situation?  Reach out to schedule an appointment with our expert Estate Planning Attorneys.  Call us at (770) 817-4999 or click here to send us a message.

Pros and Cons of Joint Bank Accounts with Mom Or Dad

Pros and Cons of a Joint Account with Mom or Dad

Adding a child to a bank account might seem like the perfect solution to safeguarding an elderly parent’s finances. Once added to the account as joint owner, the child can help with bill paying, and can monitor the account balance to control double payments or excessive gifts.  When the parent dies, the account passes to the surviving joint owner without requiring probate.

But there are down sides to adding a joint owner to a bank account that should be considered, and too often aren’t.  If the child added to the account has financial problems, the child’s creditors can access the funds in mom’s or dad’s account to satisfy the child’s debt.  In that circumstance, the decision to add a child to the account to make it easier to protect the parent’s money can result in the loss of the entire account.

Another down side to adding a joint owner that is often not considered is what happens when mom or dad dies if there are other children.  Under Georgia law, the child on the account as joint owner receives one hundred percent of the account. Even if the parent has left a Will leaving everything equally to all the children, the other children will not receive a share of the joint account.  Of course, the child who receives the account is free to split the funds with the other children, but there is no legal requirement to do so. If the joint owner chooses to keep all the funds, the decision to add that child to the account caused the other children to be disinherited and undid the parent’s intended estate plan.

If the risks to adding a child to the account as joint owner outweigh the benefits, there is another solution.  The parent can execute a Power of Attorney. Georgia’s 2017 statutory power of attorney form includes provisions authorizing an agent to pay bills and manage bank accounts.
A properly executed Georgia Power of Attorney can accomplish the goal of safeguarding mom’s or dad’s account, without the possible legal risks.

If your parent has not created their Power of Attorney, or you are not sure if it is correctly created, then you want to make it a priority to take the time now to get a proper one set up.  Don’t put it off and wait, because you never know when that emergency situation could arise.

We are able to provide the expertise for you to help make sure that Mom or Dad has their wishes carried out along with making sure you as the child has proper control over their finances. Call (770) 817-4999 or contact us here today.

How Do You Probate Out of State Real Estate

How Do You Probate Out of State Real Estate?

Many Georgia residents own real estate that is located in another state. The property might be a vacation home, rental real estate, a home that has been in the family for generations, or a future retirement home. Whatever the purpose might be for maintaining ownership of out of state real estate, families are often faced with unforeseen complications when the owner of the out of state property dies.

Unless the real estate is owned in a way that passes title outside of probate to a surviving owner, it will be necessary to file for probate in the other state. This “ancillary” probate will be in addition to the probate filed in Georgia. While Georgia probate is relatively straightforward, there are many “gotchas” for Georgia residents filing for an ancillary probate in other states.

For example, states differ on whether a nonresident can even be appointed as Executor. Florida and Kentucky allow a nonresident to serve as Executor only if that person is legally related to the deceased.

Some states, such as Virginia, require a nonresident Executor to post bond, even if the deceased’s Will waives the bond requirement. In Tennessee, a nonresident can serve as Executor only if there is also an in state Co-Executor and the nonresident appoints the secretary of state as agent to accept legal papers. The Tennessee probate court may also require the nonresident executor to post bond even if the Will waives that requirement.

Given the potential drawbacks of having to probate for real estate owned by a Georgia resident outside of Georgia, it is important to understand what the laws are of the state where the real estate is located. It may be that an ancillary probate in that state would not impose any great difficulty. But if there is a chance that problems might occur, it would make sense to either title the non Georgia real estate so that it passes outside of probate, or to create a trust and title the non Georgia real estate in the trust.

It can be complicated to try and navigate these issues alone, and that’s why it’s important to have an Estate Plan in place before an unexpected death occurs.  If you want support in creating the right plan for your needs, then please click here to schedule with our staff of trusted attorneys.

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