WILLS & ESTATE PLANNING

Two of the more difficult decisions clients have to make are how to distribute one's property after death, and whether to use extreme measures to prolong one's life.  This requires clients to consider four issues:  wills & trusts, health care decisions, financial power of attorney, and estate planning needs.

Last Will & Testament & Trusts

Many clients raise the initial question, "Do I really need a Will?  I'm not that old, and I don't own a lot of stuff, so why do I need a Will?"

The answer is that in Georgia, if you die without a Will, your estate will be distributed to your legal heirs, commonly known as your "next of kin."  Lacking a Will, the identity of your heirs is determined by law, not by you. 

For example, the law states that a surviving spouse and children are a decedent's heirs-at-law.  However, without a Will, the law generally requires that the estate be split equally amongst the spouse and the children.  A spouse gets no more than a child's share.  Moreover, the children, no matter how young, receive their bequest outright, rather than being held in trust until they are of suitable age and discretion. 

For clients who are not legally married and have no children -- or for clients who are part of a non-traditional family unit -- one's legal heir could end up being an unknown second-cousin twice removed, if that person is the closest living blood relative to the decedent.

Instead of relying on the law to identify one's legal heirs, clients may write a Will that identifies their beneficiaries by name. 

Writing your Will is beneficial in other ways as well.  For instance, in your Will, you can:

• Direct that property be held in trust for minor children, or disabled beneficiaries, and make decisions about how trust assets may be used;

• Name a trustee to invest and manage the funds in any trust;

• Name a guardian who will raise and care for your children;

• Name an executor to probate your Will;

• Direct that your executor be relieved of having to post a bond or file ancillary paperwork with the court, such as inventories, appraisals or returns, which would otherwise increase the legal costs of probating your Will.

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Health Care Decisions

PLEASE NOTE:  EFFECTIVE JULY 1, 2007, THE GEORGIA ADVANCE DIRECTIVE FOR HEALTH CARE REPLACED THE GEORGIA DURABLE POWER OF ATTORNEY FOR HEALTH CARE AND THE GEORGIA LIVING WILL.  ALL POWERS OF ATTORNEY AND LIVING WILLS SIGNED PRIOR TO JULY 1, 2007 WILL REMAIN FULLY VALID; HOWEVER, CLIENTS SHOULD CONSIDER WHETHER IT WOULD BE BENEFICIAL TO UPDATE THEIR HEALTH CARE DIRECTIVES USING THE NEW STATUTORY FORM.

Many clients are concerned about the medical profession's use of extreme health care measures to keep patients alive.  Clients may address this issue in an Advance Directive for Health Care. 

In the Georgia Advance Directive for Health Care or GADHC, a client may identify an agent who will make decisions about whether to use extreme measures to keep the client alive, or whether to withhold or discontinue such measures if it is in the best interests of the client to do so.  The advance directive also allows the client to state her preferences concerning the use of extreme measures, in case her agent is unavailable or unwilling to act on her behalf.

Moreover, the GADHC gives the health care agent the right to visit and have full access to the client in the hospital, to talk with the client's doctors, and to review the client's medical record. 

The GADHC also allows the client to name her guardian - someone who will be her caregiver, or who will ensure that her physical needs are provided for, in the event the client is unable to care for herself.

The GADHC then, is particularly vital to a client who is part of a nontraditional family:  it allows her to name her domestic partner as her agent, to have access to her partner in the hospital, and to allow her partner to make the right decisions in this crucial time.

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Financial Power of Attorney 

Clients should plan for their future needs.  For instance, with a financial power of attorney ("FPOA"), a client may appoint a family member or friend to be her "agent," so that if she becomes disabled, the agent can handle her finances and investments. 

By law, the agent must act in the client's best interest.  Financial powers of attorney can be used to allow the agent to pay household bills, hire and pay for additional nursing care, or manage the client's investments while she is in the hospital.

The financial power of attorney is useful even when a couple own most of their assets jointly.  For instance, elderly clients who need to move a spouse or partner into an independent or assisted living facility can use the FPOA to sell jointly held real estate, without the necessity of the partner attending the closing. 

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Estate Planning 

Depending on one's family circumstances and financial situation, clients may need to consider whether to avoid probate of certain assets, and how to minimize estate taxes.

Avoiding Probate of one's assets may not be necessary where the major beneficiaries named in the Will are the decedent's heirs-at-law, or next of kin.  In this case, the risk of a Will contest is minimal, and there is little need to avoid probate.

However, where there is a high risk that one's next of kin might contest the Will, one should consider ways to remove assets from probate.  For example, there is a greater risk of a Will contest where a parent decides to favor one child in his Will over another child.  There may be important reasons to write the Will in this manner; regardless, the child who is receiving less may file an objection with the court, seeking to have the Will declared invalid.

In a similar manner, where a Gay or Lesbian client intends to leave the bulk of his/her estate to a domestic partner, the client's family of origin may file a Will contest.

In the initial consultation, an attorney may discuss these issues with a client.  The attorney will suggest various ways to transfer property to designated persons outside of one's probate estate, including joint tenancies and/or revocable or irrevocable trusts.  Each method has pros and cons that should be discussed in depth.

Minimizing Estate Taxes is an important issue to discuss in the initial consultation, especially if the client expects to have a large probate estate. 

At the present time (2008), the federal government provides an exemption of $2 million on all estates (increasing to $3 million in 2009).  What this means is that the first $2 million in the estate is not taxed at all.  However, the amount over and above $2 million is taxed, at a current rate between 45-50%. 

Prior to the initial consultation, a client should gather together all documentation of her assets and ascertain their current value.  During the consultation, an attorney will discuss what avenues are available to minimize one's federal tax debt, including utilizing the marital exemption for married couples, and irrevocable trusts.   

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