The goal here is to shed light on a few basic concepts related to the writing of one’s will, trust, or estate plan. Fundamentally, when an individual becomes incapacitated or passes away, and that person cannot speak for themselves, the only way that person may have some control over their unfortunate situation is through the estate planning done before the incapacity or death occurs.
Most Georgians do not have a will, no trust, no power of attorney, and no advance directive for health care choices in case of incapacity. In fact, most of the eligible American nation does not even have a simple will. That means that most Americans will likely pass away intestate and the assets of those estates would pass by intestacy. The effect of the majority of the population passing their estates by intestacy means 1) an estate tax or “death tax” windfall to the State for all estates valued at more than $2 million, 2) the decedent did not get the opportunity to express their wishes about how- and to whom- their possessions would be distributed, 3) the probate of the intestate estate will take more work and the and the costs will be higher, 4) many people (non-heirs) who were verbally promised a gift from the decedent’s estate will not receive the promised gift, and 5) more stress for the surviving family left behind.
Wills, trusts, and the probate process are typical issues related to planning, and they are often difficult topics for most people to discuss. For many people, it’s discomforting to talk about one’s own mortality and it’s even harder to discuss it with a spouse or with family. In my experience, it has always been much easier to be an adviser and guide for others in the establishment of an estate plan or in the probate of an estate, than it was to discuss my inevitable demise with my wife and create my own estate plan.
So by not having a will, or similarly by not having a living trust, the Georgia individual is telling the State “I do not have a plan for the distribution of my assets; I do not have a plan for the succession of my business; I want all of my assets to go to my surviving spouse and closest related family; I want to pay the most possible taxes out of my estate; and I want to leave all loose ends to my surviving family. If I have no immediate or identifiable family, then the state may take all of my assets.”
In my experience everybody wants to have a plan, wants control, wants to pay the least taxes, and wants to provide for their family. The decisions controlling your medical treatment during incapacity are made in the advance directive. Control may also be exerted over the financial decisions made with your money during incapacity in the financial powers of attorney.
The difficulties a family experiences after the death of a fellow family member are often lessened if there is already a plan in place when it’s needed most. If the life insurance you currently hold could be constructively redirected to fund a trust for the care of your children- would that be a good thing? It’d surely answer the question: “How will I be able to support my children, if I am not there?”
Suze Ormon will say that you should avoid probate. Well, maybe. Whether or not one should avoid probate is beside the point if you don’t have an estate plan. Without a plan, the estate must be probated by intestacy. Probate in Georgia is relatively a good process. It’s not cumbersome like Florida probate or California probate where a portion of the estate is paid to the lawyer or the costs are higher. Ms. Orman seems to consider all probate systems to be like California’s, but they are not. Georgia’s probate system is better. If you have a property in Florida but live in Georgia, the Florida property may be more cumbersome and expensive to probate than if some basic timely advice and estate planning had been utilized. Given a choice between Georgia and Florida probate, for cost and convenience, always go with Georgia.
The hope is that by showing you a few of the central estate planning concepts focused on the control of your money and the care of your family, you may be inspired to use the knowledge for the benefit of you, your family and friends.
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Random question: I am starting my students blog to share my own experiences. Do you realize its hard or easy to create consistently?
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Tks…
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