Executor Fees in Georgia

Executor fees are the compensation paid to the executor or personal representative responsible for administering the estate of a deceased person. These fees, also known as personal representative fees, are typically a percentage of the total value of the estate and are intended to compensate the executor for their time, effort, and expertise in carrying out their duties. 

Georgia, USA, like many states, has laws that govern the fees that executors can charge for their services in administering an estate. In Georgia, executor fees are determined by statute, specifically under Georgia Code Sections 53-6-60 through 53-6-64. According to this law, an executor is entitled to receive a reasonable fee for their services. In this article, we’ll take a closer look at executor fees in Georgia, exploring the laws that govern them, how they’re typically calculated, and some important considerations for anyone involved in the estate administration process.

At Trace Brooks Law, we can assist in matters involving probate in Georgia such as determining whether a will is required to undergo probate and the appropriate executor fees. Trace Brooks, an experienced Atlanta probate attorney, possesses extensive knowledge of Georgia’s estate laws and can assist in making the probate process as efficient as possible. We are well-acquainted with the statutory guidelines and previous legal cases that shape the determination of fair compensation for executors. With our experience, we aim to ensure that executors are fairly and justifiably compensated while also complying with the legal requirements. To schedule a consultation, contact our office today at (404) 492-9559.

The Role of an Executor

An executor, also called a personal representative in Georgia, is an individual or institution appointed in a will to manage the estate of a deceased person. The primary duties of an executor are to settle the deceased’s debts, collect and protect the assets, pay expenses, manage the estate’s assets, and distribute the remaining property to beneficiaries named in the will.

In Georgia, the role of an executor is a significant responsibility that requires a considerable amount of time, effort, and careful attention. The executor serves in a fiduciary capacity to the estate, meaning that they must act in the best interests of the estate and its beneficiaries. This may involve making financial and legal decisions, hiring professionals to help manage the estate, communicating with beneficiaries, and ensuring their actions adhere to Georgia state laws.

The executor’s responsibilities typically begin with the probate process, which involves the official validation of the will and the appointment of the executor. To start this process, the executor should file a Petition for Probate in Solemn Form at the Probate Court in the county where the deceased resided. Once the court grants the probate, the executor can begin their duties, which generally include:

1. Gathering and creating an inventory of the estate’s assets
2. Managing and preserving the estate’s property
3. Determining and paying the estate’s debts, claims, and taxes
4. Distributing the remaining assets in accordance with the will
5. Preparing and filing final tax returns and accounting for the estate.

Serving as an executor in Georgia is a significant responsibility that involves managing the deceased’s estate, making important decisions, and ensuring compliance with state laws, ultimately working toward the fair distribution of assets to beneficiaries and the proper closure of the estate.

Legal Obligations

As an executor in Georgia, there are legal obligations that must be honored. The executor must act in the best interest of the estate and beneficiaries by diligently administering the estate and adhering to Georgia’s fiduciary duty requirements. Failure to fulfill these responsibilities may lead to legal consequences, including personal liability for losses suffered by the estate.

Some legal obligations that the executor must adhere to include acting impartially when handling the estate, avoiding conflicts of interest, and properly managing the estate’s funds. Additionally, the executor must follow Georgia’s probate code and any court orders related to the estate.

If the executor fails to perform their duties or is found to have acted in a manner that is detrimental to the estate or its beneficiaries, they may be removed from their position and may be held accountable for any damages.

Factors That Affect Executor Fees

In accordance with Georgia estate law, an executor has the option to serve with or without compensation as specified in the will. In cases where the will does not specify the matter of executor fees, the administrator will receive compensation based on the default guidelines outlined in Georgia probate law.

Personal representatives will receive payment according to the instructions in the will or any written agreement made before the person died. If there is a written agreement signed by all the beneficiaries or heirs, it will also determine the compensation. If a testator (person making the will) and a personal representative have a written agreement, it will be legally enforceable and treated as part of the will.

In Georgia, executors are entitled to reasonable compensation for their services. Georgia law provides that an executor may receive fees for their services based on the size of the estate they are managing in the absence of prior instruction otherwise. 

Regardless of the fee arrangement, the executor is expected to act in the best interests of the estate, and this may include reducing their fees in certain situations, such as when the estate’s assets are insufficient to cover the necessary expenses and distributions to beneficiaries.

Procedures for Calculating Executor Fees in Georgia

The role of an executor or personal representative is crucial in making sure the testator’s estate is distributed according to their wishes. Serving as an executor can sometimes entail a considerable time commitment, especially if the estate is complex or if there are disputes among the beneficiaries. In recognition of the work involved, Georgia law provides for the payment of executor fees. 

Percentage of Estate

One of the most common methods for determining executor fees in Georgia is to calculate it as a percentage of the total value of the estate. In general, the fees paid to an executor in Georgia—including both personal representatives and administrators—are set forth by statute (O.C.G.A. § 53-6-60).

According to Georgia’s probate code, an executor is entitled to a commission calculated as a percentage of the gross value of the estate as follows:

• 2.5% of all money received by the executor in their capacity as executor
• 2.5% of all amounts paid out by the executor in their capacity as executor
• 10% of any interest earned on estate funds while being administered by the executor
• At a rate of 3%, the executor may receive additional compensation by petitioning the appropriate Georgia probate court for the value of the non-money property (such as real estate, stocks, and bonds) distributed to beneficiaries without being sold.

These percentages are applied to the total value of the estate, including the decedent’s real estate holdings if handled by the executor.

It is important to note, however, that these percentages are considered the maximum that an executor can charge under Georgia law. The fees can be negotiated downward, either by the testator when creating the will or by the beneficiaries before the estate is administered.

Tax Implications of Executor Fees

Executor fees are recognized as income, and just like any other form of income, executor fees are subject to taxes.

Income Tax on Executor Fees in Georgia

In Georgia and other states, executor fees are generally considered taxable income for the person receiving them. The Internal Revenue Service (IRS) requires these fees to be reported on the executor’s personal federal income tax return. Georgia state law also requires executors to report the executor fees they receive as income for state income tax purposes. The estate itself may also be subject to Georgia state income taxes on the income it generates during the period of probate or administration. The income tax rate in Georgia is progressive, with rates ranging from 1% to 5.75%. 

All individuals serving as personal representatives are required to include any fees received from an estate in their gross income. If you are not engaged in the regular trade or business of being an executor (for example, if you are fulfilling the role of an executor for a friend’s or relative’s estate), you should report these fees on line 8z of Schedule 1 (Form 1040). However, if you are actively involved in the trade or business of being an executor, you should report the fees received from the estate as self-employment income on Schedule C (Form 1040), specifically under the section for Profit or Loss From Business.

In the case where the estate operates a trade or business, and you, as the executor, actively participate in its operation while carrying out your duties, any fees you receive that are associated with the operation of the trade or business must be reported as self-employment income on Schedule C (Form 1040).

In addition to the executor fee, a federal estate tax return will be necessary if the taxable estate exceeds $12.92 million for deaths occurring in 2023. According to the current tax system, it is estimated that significantly less than one percent of estates will be obligated to pay the federal estate tax.

It’s important to remember that tax laws and regulations can be complex and subject to change. If you need help with how to properly report and pay taxes on your executor fees, it’s always a good idea to consult with a tax professional or an attorney for guidance. They can help you navigate the complexities of the tax system and ensure that you comply with all applicable laws and regulations.

Grounds for Contesting Fees

In Georgia, there are several reasons that beneficiaries or interested parties may contest an executor’s fees. Some common grounds for contesting include:

Breach of Fiduciary Duty

The fiduciary duty of an executor is to always prioritize the best interests of the estate. An executor needs to avoid any form of favoritism towards themselves or any other party involved. Furthermore, an executor must maintain open communication with all parties involved, providing updates on the estate’s status and the progress of the probate process. Acting with integrity, the executor must adhere to the instructions outlined in the will and follow court orders diligently. Additionally, they are responsible for efficiently and competently managing the estate’s assets. Failure to uphold this fiduciary duty can result in various consequences for the executor, including removal from their position and a potential obligation to reimburse any losses caused by their actions.

Unreasonable Executor Fees 

In general, if any concerned party believes that the fees charged by an executor to the estate are excessive, they have the right to object. To determine the reasonableness of the executor’s fees, the probate court will consider various factors in conjunction with relevant state laws. The complexity of the estate and the specialized skills possessed by the executor may be taken into account during this analysis. Several indicators may suggest the executor’s fees are unreasonable. For instance, if it can be demonstrated that the executor devoted minimal time to managing the estate, or if the estate’s assets were relatively straightforward, it could support the argument of excessive fees. Additionally, evidence of negligence or deliberate inefficiency by the executor in guiding the estate through the probate process may be considered. Another compelling aspect could be if the executor billed the estate twice for their work or invoiced the estate for services performed by someone else.

Accounting Objections

Financial reports, known as accountings, are created by the executor of an estate to provide details about its assets and debts. Interested parties, including beneficiaries and creditors, have the right to raise objections if they suspect any inaccuracies or misleading information within the accounting. By petitioning the court, these parties can request a thorough review and potential revision of the accounting. Such objections can also shed light on instances where the executor has acted improperly, potentially breaching their fiduciary duty.

Overall, contesting executor fees in Georgia can be a complex process, but interested parties need to be aware of their rights and the grounds for contesting fees if they believe it is necessary.

Waiving Executor Fees

The role of an executor can be time-consuming and challenging, requiring them to navigate complex legal and financial matters. As a result, it is common for executors to be compensated for their services through a fee. However, in some cases, executors may choose to waive or reduce their fees. 

Reasons to Waive Executor Fees

The decision of whether or not to accept an executor’s fee is a personal one. Some people may feel uneasy about receiving payment for helping their family during a difficult time, and it is perfectly acceptable to fulfill the role of an executor without compensation. However, being an executor is a significant commitment that involves working on behalf of the estate beneficiaries for an extended period, often requiring substantial effort.

There are circumstances where it is reasonable to accept a fee. For instance, if you possess valuable skills that make you well-suited for the job, such as managing the deceased person’s business or navigating complex family dynamics, it is understandable to request compensation for your work. Your expertise in areas like business, finance, or law can also make you a suitable candidate for remuneration.

Nevertheless, if you are inheriting most or all of the estate, it is generally not recommended to take an executor’s fee. This is because the fee is considered taxable income, whereas inherited money is typically not subject to taxes. However, in rare cases where the estate’s size triggers federal estate tax and your personal tax rate is lower than the estate’s, accepting compensation may be a sensible tax strategy. In such situations, it is advisable to consult with a probate attorney who can offer guidance regarding the executor’s fee.

Navigating Executor Fee Disputes

Executor fee disputes can be a divisive and complicated matter. They can arise when there is disagreement among beneficiaries or between the executor and the beneficiaries of an estate regarding the fees charged for the executor’s services. It is essential to address these disputes promptly and efficiently to preserve relationships and avoid costly and time-consuming court battles. 

Considering Legal Representation

Depending on the nature and complexity of the executor fee dispute, it may be in your best interest to seek legal representation. An attorney experienced in estate and trust disputes can help you understand the legal issues involved, evaluate the merits of your case, and explore available options for resolving the dispute. Your attorney can also advise you on your legal rights and obligations as an executor or beneficiary and represent your interests in negotiation, mediation, or litigation.

If you decide to seek legal representation, it is essential to choose an attorney with whom you feel comfortable and confident in their abilities. It may be helpful to interview several attorneys to gauge their compatibility, experience, and track record in handling similar disputes. Keep in mind that while legal representation can provide valuable guidance and support, it may also escalate the conflict and lead to more significant legal fees and expenses.

Preventing Potential Disputes

Executors have the right to request fair compensation for their services rendered to an estate. Nevertheless, the determination of what qualifies as a “reasonable” fee can occasionally differ, taking into account elements like the intricacy of the estate. In such cases, presenting evidence of the executor’s specialized skills or their effective and beneficial management of the estate can assist in resolving any disagreements regarding the fees.

In summary, navigating executor fee disputes can be a delicate and complex process, but considering mediation, seeking legal representation, and proactively preventing disputes can help achieve a successful resolution that preserves relationships and benefits all parties involved.

Getting the Help of Experienced Atlanta Probate Attorney Trace Brooks

As a legal firm that focuses on estate planning and probate law, Trace Brooks Law can assist you in navigating the complexities of executor fees in Georgia. We understand the importance of receiving fair compensation for the responsibilities you undertake as an executor. Top-rated Atlanta probate attorney Trace Brooks has extensive knowledge of Georgia’s executor fee laws and can provide personalized solutions tailored to your unique circumstances. Contact our office today at (404) 492-9559 to schedule a consultation.

from Trace Brooks Law https://www.tracebrookslaw.com/executor-fees-in-georgia/

Heirs vs. Beneficiary in Georgia

Estate planning is a crucial aspect of managing your financial affairs and ensuring that your assets are distributed according to your wishes upon your passing. Two key terms that often arise when discussing estate planning are “heirs” and “beneficiaries.” Although these terms may sometimes be used interchangeably, they carry different meanings, roles, and legal implications. In this article, we will shed light on the distinctions between heirs and beneficiaries and delve into their roles in estate planning. We will also explore Georgia’s estate and probate laws to help you gain a better understanding of the processes involved in distributing assets after one’s death.

To ensure that your estate planning aligns with your goals and adheres to state laws, it’s critical to consult with an experienced Georgia estate planning attorney. At Trace Brooks Law, Atlanta estate planning lawyer Trace Brooks may be able to help you create a comprehensive estate plan that safeguards your loved ones’ financial future and guarantees your wishes are carried out according to your intentions. Contact us today at (404) 492-9559 to discuss your options and develop a tailored strategy for your unique circumstances.

Understanding Heirs and Beneficiaries

Estate planning is an essential part of organizing your financial life and ensuring that your assets are distributed according to your wishes after your death. This article seeks to clarify the difference between heirs and beneficiaries and provide insights on their roles in estate planning.

Definition of Heirs

Heirs are individuals who automatically inherit or have a legal right to inherit some, or all, of the assets of a deceased person due to their familial relationship to the estate holder. This is determined by the laws of descent and distribution in the deceased person’s state of residence. The heirs’ rights to inherit solely depend on their position within the family tree, with primary consideration given to spouses and children of the deceased, followed by other relatives in a certain order, such as siblings or parents.

For example, if a person dies without a last will and testament (intestate), Georgia laws will determine the distribution of their assets among their closest relatives. These may include their spouse, children, parents, siblings, or other more distant relatives. The priority given to each family member varies and is based on their particular “order of intestate succession.” In general, an heir cannot choose to be excluded from their inheritance, but they can legally disclaim their entitlement, allowing the assets to pass on to the next in line on the succession order.

Definition of Beneficiaries

Beneficiaries, on the other hand, are individuals or entities (such as a trust, charity, or organization) who are specifically named in a person’s last will and testament, trust document, or other legal documents to receive a particular benefit or several benefits upon the person’s death. Unlike heirs, beneficiaries do not have to be family members. Apart from trust beneficiaries who are children to the deceased; they can also be friends, institutions, or other parties.

Beneficiaries are chosen by the deceased person, and their rights to inherit assets are based on the deceased’s expressed wishes in their will or designated through other valid legal documents such as life insurance policies, payable-on-death bank accounts, or retirement plans. Beneficiaries can accept or reject the benefit that has been bequeathed to them.

Georgia Estate and Probate Laws

Georgia probate laws deal with the administration and distribution of a person’s assets and debts after their death. The probate process in Georgia is governed by the Georgia Probate Code and supervised by the Probate Court in the county where the deceased person resided at the time of their death. This article will provide an overview of the probate process in Georgia, as well as the intestate and testate succession laws in the state.

Overview of Georgia’s Probate Process

The probate process in Georgia begins when a person dies, leaving property that needs to be distributed. If the deceased person had a will, the will must be filed with the probate court within a specified time after the person’s death. If there is no will, a petition for administration must be filed with the court.

The Georgia probate process involves several steps, including:

1. Filing a petition: The probate process begins when someone files a petition for probate with the appropriate court. If the deceased person left a will, the person named as the executor in the will typically files the petition. If there is no will, a close relative or other interested party can file the petition for administration.
2. Notice to heirs and beneficiaries: The court requires that notice be given to all heirs and beneficiaries of the estate. This includes individuals named in the will, as well as those who would inherit under the state’s intestate succession laws if there was no will.
3. Inventory of assets: The executor or administrator of the estate is responsible for creating an inventory of the deceased person’s assets. This includes real property, personal property, bank accounts, investments, and other assets.
4. Payment of debts and expenses: The executor or administrator is responsible for paying the deceased person’s debts and expenses, including funeral costs, outstanding bills, and taxes.
5. Distribution of assets: After all debts and expenses have been paid, the remaining assets are distributed to the beneficiaries and heirs according to the provisions of the will or, in the absence of a will, the state’s intestate succession laws.
6. Closing the estate: Once all assets have been distributed and all required filings have been made, the probate court will close the estate.

Georgia’s Probate Process	Description
Filing a petition	The probate process begins by filing a petition for probate with the appropriate court. The executor named in the will typically files the petition. If there is no will, a close relative or interested party can file the petition.
Notice to heirs and beneficiaries	All heirs and beneficiaries of the estate, including individuals named in the will and those who would inherit under intestate succession laws, must be given notice by the court.
Inventory of assets	The executor or administrator creates an inventory of the deceased person’s assets, including real property, personal property, bank accounts, investments, and other assets.
Payment of debts and expenses	The executor or administrator is responsible for paying the deceased person’s debts and expenses, such as funeral costs, outstanding bills, and taxes.
Distribution of assets	After paying all debts and expenses, the remaining assets are distributed to beneficiaries and heirs according to the provisions of the will or intestate succession laws.
Closing the estate	The probate court closes the estate once all assets have been distributed and all required filings have been made.

Intestate Succession in Georgia

Intestate succession is the process by which a person’s assets are distributed when they die without a valid will. In Georgia, the intestate succession laws determine how a person’s assets will be distributed based on familial relationships. Some key points of the intestate succession laws in Georgia include:

1. Spouse’s share: If the deceased person was married and had no children, their surviving spouse inherits the entire estate. If the deceased person was married and had children, the spouse and children share equally in the estate, with the spouse receiving no less than one-third of the estate.
2. Children’s share: If the deceased person had children but no spouse, the children inherit the entire estate, divided equally among them.
3. Parents and other relatives: If the deceased person had no spouse or children, their estate would be distributed to other relatives in the following order: parents, siblings, nieces and nephews, grandparents, aunts and uncles, and, finally, cousins.

Testamentary Succession in Georgia

Testamentary succession refers to the process by which a person’s assets are distributed according to their will. In Georgia, a valid will must meet certain legal requirements, including being written, signed by the person making the will (the testator), and witnessed by at least two competent individuals.

As long as a will is valid under Georgia law, it will generally be followed during the probate process. Some key points of testate succession in Georgia include:

• Devise of property: A testator can leave specific property or assets to specific beneficiaries named in the will. This includes real and personal property, as well as financial assets such as bank accounts or investment accounts.
• Residuary estate: The residuary estate refers to the remaining assets after all specific devises have been distributed. A testator can specify how the residuary estate should be distributed among the beneficiaries or heirs.
• Trusts: A testator can establish a trust in their will. These trusts can be used to distribute assets to minor children, provide for the care of a disabled beneficiary, or accomplish other estate planning goals.
• Power of appointment: A testator can grant a power of appointment in their will, allowing a named individual to distribute certain assets as they see fit, within the limits set in the will.
• Contingent and alternative beneficiaries: A testator can name contingent beneficiaries to inherit in case a named beneficiary predeceases the testator or is otherwise unable to inherit. Similarly, a testator can name alternative beneficiaries to inherit if the primary beneficiaries cannot or will not accept the bequest.

The probate and estate laws of Georgia seek to protect the rights and wishes of testators and their heirs, as well as provide an orderly process for the distribution of a person’s assets after their death. With the help of a skilled Atlanta estate planning attorney, individuals can better plan for the disposition of their estate and ensure that their wishes are carried out after their death.

Georgia Inheritance Rights and Protections

In Georgia, inheritance rights and protections exist to ensure that family members are justly provided for following the death of a loved one. These rights and protections, which are governed by Georgia’s probate and estate laws, generally fall into three main categories: spousal inheritance rights, children’s inheritance rights, and inheritance rights of other family members. This article provides an overview of these categories and their legal implications within the state of Georgia.

Spousal Inheritance Rights

Georgia has some of the more restrictive spousal inheritance regulations in the United States. In many states, the surviving spouse receives the entirety of the deceased spouse’s estate, regardless of whether they share children.

A surviving spouse’s share depends on the existence of surviving children or other descendants. If the decedent (the person who has died) has no surviving children or descendants, the spouse will inherit the entire estate.

However, if the decedent has children or descendants, Georgia law stipulates that the surviving spouse shall receive no less than one-third of the estate. The remaining two-thirds will be distributed among the children and their respective descendants. 

In accordance with Georgia’s inheritance statutes, an individual can purposefully exclude their spouse from their will, effectively disinheriting them. The disinherited spouse has the right to receive financial support for a period of one year following the death of their partner. Beyond this timeframe, the estate bears no responsibility to provide any further assistance.

Children’s Inheritance Rights

In Georgia, children have the right to inherit from their parent’s estates, regardless of whether a will is in place. If a person dies intestate with surviving children, the share of the estate allocated to each child is determined by Georgia’s inheritance laws. As mentioned earlier, the spouse is entitled to at least one-third of the estate, and the children will share the remainder equally. Importantly, these shares are determined by a legal concept called ‘per stirpes.’ This means that descendants of a child who predeceased the decedent would receive the share that the child would have been entitled to if they were still alive.

Additionally, Georgia law allows for adopted children to inherit from their adoptive parents in the same manner as biological children. However, adopted children generally do not inherit from their birth parents unless their original birth certificate lists the birth parent(s) and adoptive parent(s) by the decree of the juvenile court. In cases of illegitimate children, those born out of wedlock can inherit from their biological father if a parental relationship has been established through a court order, written acknowledgment of paternity, or another legal process.

Inheritance Rights of Other Family Members

If an individual dies intestate without a surviving spouse, children, or descendants, Georgia law provides that the estate will pass to other close relatives. The estate would first pass to the decedent’s parents. If there are no surviving parents, then the estate would be divided among the decedent’s siblings or their descendants. Further, if the decedent has no surviving siblings or descendants, the estate passes to the grandparents and any extended family members, following the priority set by Georgia laws.

Common Estate Planning Tools in Georgia

Estate planning is an essential process that ensures the proper management and distribution of an individual’s property upon their passing. In Georgia, numerous estate planning tools are available to help individuals efficiently manage their assets and minimize potential disputes among family members. This article will discuss some common estate planning tools in Georgia, including wills, trusts, joint tenancy with right of survivorship, and payable-on-death accounts.

Wills

A will is a legal document that expresses an individual’s desires for their property distribution upon their passing. To be legally valid in Georgia, a will must meet specific requirements:

• The will must be in writing.
• The testator (person making the will) must be at least 14 years old and of sound mind.
• The will must be signed by the testator.
• Two competent witnesses, who are not beneficiaries, must sign the will in the presence of the testator.

It is crucial to review and update wills regularly, especially after significant life events like marriage, divorce, or the birth of a child, to ensure that the estate plan accurately reflects the testator’s current wishes.

Trusts

A trust is a legal entity that holds and manages assets for the benefit of designated beneficiaries. Trusts can bypass probate, potentially saving time and money, and provide greater control over asset distribution. There are multiple types of trusts available in Georgia, including revocable living trusts, irrevocable trusts, and special needs trusts. Each trust type serves a specific purpose and has unique advantages or restrictions.

Joint Tenancy with Right of Survivorship

Joint tenancy with right of survivorship is a form of property ownership where two or more individuals share ownership, and upon the death of one owner, the surviving owner(s) automatically acquires their share. This estate planning tool helps protect assets from probate and can be beneficial for married couples sharing property ownership.

Payable on Death Accounts 

Payable on death (POD) accounts are financial accounts that allow the account holder to designate a beneficiary who will receive the account’s funds upon the account holder’s death. POD accounts bypass probate and provide a simple way to transfer assets to a chosen beneficiary.

Getting the Help of a Skilled Atlanta Estate Planning Lawyer

Navigating the complex world of estate planning can be a daunting task. With the intricacies of Georgia’s probate and estate laws, ensuring that your assets are distributed according to your wishes and in compliance with state laws requires the assistance of a skilled Atlanta estate planning attorney. 

An estate planning attorney can help you effectively navigate the distinctions between heirs and beneficiaries, ensuring that your estate plan clearly outlines your intentions for asset distribution after your death. By carefully designating beneficiaries in your will or trust, and understanding the implications of Georgia’s laws regarding heirs, a skilled attorney can help you avoid potential disputes and complications among your loved ones. Atlanta estate planning lawyer Trace Brooks may be able to help ensure that your assets are distributed according to your wishes while adhering to state laws, giving you peace of mind and providing your family with financial security and stability. Contact Trace Brooks Law today at (404) 492-9559 to schedule a consultation.

from Trace Brooks Law https://www.tracebrookslaw.com/heirs-vs-beneficiary-in-georgia/

Seven Major Life Events That Should Prompt Georgia Residents to Prepare or Update Their Estate Plans

Estate planning is a critical, but often overlooked, aspect of managing your financial and legal wellness. As you know, estate planning involves creating a plan for the distribution of your assets, property, and wealth after your passing. Comprehensive estate planning should also include making provisions for your healthcare and decision-making in case of incapacitation. An experienced Atlanta estate planning lawyer can provide guidance and assistance in developing a comprehensive estate plan that takes into account your unique circumstances and goals.

There’s never a “wrong” time to prepare or review your estate plan in Georgia. Though estate planning is commonly considered something that only older individuals need to think about, young families in Georgia also benefit from having an estate plan in place. 

Several major life events should prompt estate planning to ensure that your wishes are honored and your loved ones are taken care of. In this article, we look at seven major life events that should prompt you to prepare or review your estate plan. Let’s get started!

Marriage or Divorce

Marriage is a significant life event that impacts the disposition of your estate, even if you do not have an estate plan. If you die without a will or trust, Georgia intestacy law gives at least a portion of your estate to your spouse. Creating or updating your estate plan after getting married can ensure that your spouse is taken care of and inherits your assets according to your wishes. 

A comprehensive estate plan can also take into account the birth of children and the acquisition of additional assets, making the time shortly after marriage an ideal time to have your estate plan prepared. Further, estate planning can ensure your and your spouse’s estate plans are aligned. Conversely, divorce also has implications for your estate plan, as you may want to revise beneficiary designations and consider changes to powers of attorney and healthcare directives. Any time your marital status changes, you should strongly consider reviewing and updating your estate plan.

Birth or Adoption of a Child

Like marriage, the birth or adoption of a child is an ideal time to create or update your estate plan. If you already have a comprehensive estate plan, your documents may include provisions for your children. You should, of course, review these documents with your estate planning attorney to confirm everything is as you wish. Further, you should appoint a guardian for your child. The birth or adoption of a child is a joyous occasion and is also an ideal time to create or update your estate plan. 

Retirement

The first time many people begin thinking about their estate plan is upon retirement. Because retirement ushers in many changes (income, lifestyle, healthcare needs), retirement is an ideal time to create or update your estate plan. Your estate plan should align with your financial and lifestyle goals in retirement. In addition to revising your will, updating your trust, and updating beneficiary designations, you may also wish to consider long-term care insurance. Further, you may consider certain irrevocable trusts to pass assets you will not need in retirement to your beneficiaries so that they can enjoy their inheritance earlier in life. If you anticipate being subject to the estate tax, these trusts also move assets out of your estate, thereby lowering or removing your potential estate tax burden.

Death of a Loved One

If you are like me, the death of a loved one was your first introduction to the importance of estate planning. The death of a spouse, parent, or other loved one is emotionally challenging, but it’s also a time when estate planning becomes critical. If your loved one had a comprehensive estate plan, you’ve hopefully seen first-hand how relatively easy the disposition of their estate was. If your loved one did not have a comprehensive estate plan (or had a flawed or incomplete estate plan), you’ve likely suffered the stress and frustration of dealing with probate. Either way, the death of a loved one is a stark reminder to create or update your estate plan. Further, if you inherit property or assets from a loved one, you may experience a change in your financial situation, which is always a good time to create or update your estate plan. 

Change in Financial Situation

As suggested above, a change in your financial situation is an ideal time to create or update your estate plan. Positive changes in your financial situation, such as receiving a significant inheritance, selling a business, or winning the lottery, have a profound impact on your estate plan. You may have the means to leave more to your beneficiaries, to name new beneficiaries, or to leave more to charity. Further, without estate tax planning, your estate may also be subject to the estate tax. Negative changes in your financial situation should also influence a review of your estate plan, as you may wish to reallocate your remaining assets amongst your beneficiaries. It’s important to review your estate plan to consider how these changes in your financial situation may affect your overall financial picture and make adjustments accordingly.

Relocation to Another State

Whether you moved to Georgia from another state or are planning to move out of state, reviewing your estate plan upon relocation is crucial. Estate planning laws vary from state to state, and what may have been valid in the state your documents were created may not be valid in your new state. With a will-based estate plan, often the entire estate plan will need to be recreated to comply with your new resident state’s laws. For clients who plan to relocate, we often recommend revocable living trust-based estate planning. While the pour-over will and powers of attorney will need to be updated in the new state, the primary estate planning document – the revocable living trust – likely will not. This significantly reduces the cost of maintaining effective estate planning despite moving across state lines. 

Changes in Health

Finally, changes in your health, such as a diagnosis of a chronic illness or a debilitating condition, should prompt the creation or review of your estate plan. It is doubly important to prepare estate planning documents quickly if you are at risk of becoming incapacitated, as you may lose the legal capacity to create or update your estate plan. When you suffer a change in health, you should pay particular attention to creating or updating advanced healthcare directives, appointing a healthcare proxy, and ensuring that your loved ones are aware of your medical wishes.

Estate planning is a crucial aspect of managing your financial and legal affairs. While a comprehensive estate plan can be drafted to account for many changes in life, these seven major life events should prompt you to create or review your estate plan. Whether it’s getting married, having a child, retiring, experiencing a loss, facing a change in your financial situation, relocating, or dealing with changes in health, estate planning can provide you with peace of mind that your wishes will be honored and your loved ones will be taken care of. 

If you have recently experienced any of these major life events, contact Trace Brooks Law at (404) 492-9559 to speak with an experienced Atlanta Estate Planning Lawyer and learn more about an estate plan that is right for you and your family.

Life Event	Reason to Create or Update Estate Plan
Marriage or Divorce	Ensure spouse is taken care of and inherits assets according to your wishes; revise beneficiary designations; consider changes to powers of attorney and healthcare directives
Birth or Adoption of a Child	Review and confirm provisions for children in your estate plan; appoint a guardian for your child
Retirement	Align estate plan with financial and lifestyle goals in retirement; revise will, update trust, and beneficiary designations; consider long-term care insurance
Death of a Loved One	Reminder to create or update estate plan; change in financial situation due to inheritance
Change in Financial Situation	Leave more to beneficiaries, name new beneficiaries, leave more to charity; adjust estate plan according to changes in financial situation
Relocation to Another State	Review and recreate estate plan to comply with new resident state’s laws; consider revocable living trust-based estate planning
Changes in Health	Prompt creation or review of estate plan; pay particular attention to advanced healthcare directives and appointing a healthcare proxy

from Trace Brooks Law https://www.tracebrookslaw.com/seven-major-life-events-that-should-prompt-georgia-residents-to-prepare-or-update-their-estate-plans/

What is the Difference Between a Will and a Revocable Living Trust in Georgia?

When planning your estate in Atlanta, GA, there are a lot of good options of estate planning tools that can each provide a benefit to your plan. The two primary estate planning documents in Georgia are wills and trusts and each one brings something different to the table.

However, you shouldn’t just include these estate planning tools in your plan without consulting an experienced Atlanta estate planning attorney. You should consider many factors when deciding whether to build your estate plan around a revocable living trust or a will. An experienced attorney can assist by making a comprehensive evaluation of your specific circumstances and clear up any misconceptions regarding living trusts and wills. At Trace Brooks Law, we can help you explore your options and determine which can help you fulfill your estate planning goals. 

Contact an Atlanta Estate Planning Attorney at Trace Brooks Law today to discuss whether a will or revocable living trust is right for you.

A will is a document in which you declare what you want to happen to the assets in your probate estate after your death. A will takes effect at your death, and must be formally acknowledged as valid by a court of law. Probate is the process of having the will acknowledged by the court. During the probate process, your will becomes part of the public record. The disposition of your estate’s assets is called estate administration.

Your will should appoint an executor to administer your estate and include guidance for the disposition of your probate assets. Your will can also name guardians for any minor children. Finally, your will can serve one of two roles: as your primary estate planning document or as a supporting document for a revocable living trust. The second type of will, known as a pour-over will, simply directs the executor to move all your probate assets into your revocable living trust.

A revocable living trust is a trust often used as a primary estate planning document. Revocable living trusts are more complicated to establish than wills but provide many additional benefits. Like a will, a revocable living trust can be amended or revoked at any time, as long as the grantor (the person creating the trust) is living and has capacity. Because revocable living trusts become effective immediately (i.e., during life instead of at death), the grantor names a trustee (often, the grantor and trustee are the same person) to manage the assets in the trust during the grantor’s lifetime. The grantor should also name a successor trustee (and sometimes more than one) to take over trustee duties when the grantor trustee becomes incapacitated or dies. 

For a revocable living trust to control assets during the grantor’s life, assets must be formally transferred to the revocable living trust – called “funding the trust.” During the grantor’s life, the revocable living trust may be funded with real property, personal property, or other assets. Further, the revocable living trust should also be named as the designated beneficiary on various accounts. At the grantor’s death, the revocable living trust will receive all the assets on which it is the designated beneficiary and all the probate assets as directed by the pour-over will (a necessary supporting document for a revocable living trust). 

If the grantor trustee does not transfer all assets to the revocable living trust during their lifetime, subject to a beneficiary designation, or through joint ownership with rights of survivorship, assets will likely end up in the probate estate. If this happens, your pour-over will must be admitted to probate to ensure the assets in your probate estate are transferred to your revocable living trust.

Once all assets are in the revocable living trust, the trust acts just like a will – directing the disposition of your assets and payment of debts – with one important distinction: privacy. Unlike a will, which requires a formal acknowledgment process and entry into the public record, a revocable living trust has no such requirements. 

Choosing between a will or a revocable living trust as your primary estate planning document is a personal decision. Many clients balance the initial lower cost and ease of implementation of a will-based estate plan with the additional benefits of a revocable living trust that may apply to their unique situation. 

Contact an Atlanta Estate Planning Attorney at Trace Brooks Law today to discuss whether a will or revocable living trust is right for you.

from Trace Brooks Law https://www.tracebrookslaw.com/what-is-the-difference-between-a-will-and-a-revocable-living-trust-in-georgia/

Common Misconceptions About Revocable Living Trusts

Due to the many benefits of revocable living trusts, they are becoming increasingly common estate planning documents. But with their recent rise in popularity, several common misconceptions have emerged. Before you make any decisions, speaking with an experienced Atlanta living trust lawyer is important. Our skilled Atlanta estate planning attorney at Trace Brooks Law can do a comprehensive evaluation of your financial situation and walk you through why you should add a revocable living trust to your estate plan.

In this article, we answer several common questions about the benefits of revocable trusts.

Does a revocable living trust help me save on taxes?

No. Like other grantor trusts, revocable living trusts are ignored for income tax purposes during the grantor’s life. Taxable events that happen to trust-owned property during the grantor’s life must be reported on the grantor’s personal income tax return. Further, revocable living trusts and wills can accomplish the same tax benefits at death. 

Does a revocable living trust protect my assets from creditors?

Asset protection is on many clients’ minds. A revocable living trust, however, is generally not an effective asset protection strategy. Because the grantor creates the trust and has full access to assets in a revocable living trust, Georgia law does not allow asset protection benefits during the grantor’s life or after death.

In very limited and rare circumstances, a revocable living trust may provide tangential asset protection benefits. Because it can be slightly more difficult for a creditor to collect from a trust than an estate, the trustee may have additional leverage in negotiating a settlement. Also, a revocable living trust may protect from a creditor of the estate that the grantor did not owe during their lifetime (this situation is rare). The limited circumstances in which a revocable living trust might protect your assets from current or future creditors should not be the primary reason to use a revocable living trust as your primary estate planning document. There are many more effective ways to protect your assets from current and future creditors, both during your life and after your death.

Contact an Atlanta Asset Protection Attorney at Trace Brooks Law to discuss options that could effectively protect your assets from current and future creditors.

Is a revocable living trust better than a will?

It depends. Whether a revocable living trust is better than a will depends on your unique circumstances and estate planning goals. Many clients balance the relative simplicity and cost-effectiveness of a will-based estate plan with the additional privacy and ease of administration afforded by a revocable living trust-based plan. 

Contact an Atlanta Estate Planning Attorney at Trace Brooks Law with your questions about revocable living trusts, including whether a revocable living trust or will is right for you.

from Trace Brooks Law https://www.tracebrookslaw.com/common-misconceptions-about-revocable-living-trusts/

Estate Planning for Young Families in Georgia

Though estate planning is commonly considered something that only older individuals need to think about, young families in Georgia also benefit from having an estate plan in place. Simply, estate planning is the process of making a plan for how your assets will be treated after you pass away or become incapacitated. Speaking to an experienced Atlanta estate planning attorney in Atlanta can help you start planning for the future of your loved ones. Here are some things to consider when estate planning for young families in Georgia.

Choosing a Guardian. One of the most important decisions that parents with minor children need to make is choosing a guardian for their children. The guardian will be responsible for your children if you pass away before your children turn 18. There are many factors to consider when choosing a guardian, including your and your children’s relationship with that person, their values and parenting style, and their age, health, and financial situation. It is important to discuss your decision with the potential guardian and obtain their agreement to serve in this role.

Writing a Will. A will is a legal document that outlines your wishes for how your assets will be distributed after you pass away. It is important to have a will in place to ensure that your assets are distributed according to your wishes. Without a will, Georgia intestacy laws will determine how your assets are distributed, which may not be what you would have wanted. 

Establishing a Trust. In addition to a will, a trust can also be useful for young families. A trust allows you to transfer assets to a trustee who will manage the assets on behalf of your beneficiaries. One of the most common trusts is a revocable living trust. There are many benefits to using a revocable living trust as a young family. A trust can be especially useful if you have minor children, as it can provide for their care and education until they reach adulthood. A revocable living trust can also ease the burden of managing your assets if you become incapacitated.

Updating Beneficiary Designations. It is important to regularly review and update your beneficiary designations on your life insurance policies, retirement accounts, and other financial accounts. This ensures your assets go to the intended beneficiaries and avoid the probate process. 

Powers of Attorney. A power of attorney is a legal document that allows you to appoint someone to make decisions on your behalf if you become incapacitated. This can include financial decisions, medical decisions, or both. It’s important to have powers of attorney in place to ensure that your wishes are respected if you are unable to make decisions for yourself. Spouses commonly list each other as their first power of attorney, though it is wise to list successor powers of attorney in case your spouse is unable or unwilling to serve.

Long-Term Care Planning. Long-term care planning is another important consideration for young families. This can include setting up a trust or purchasing long-term care insurance to ensure that you and your loved ones are taken care of in the event of a serious illness or disability.

Digital Estate Planning. Your estate plan should consider everything you own – real property, personal property, and digital property. Digital property can include your social media accounts, email accounts, and online financial accounts. It’s important to have a plan for how these assets will be managed after you pass away. It is also important to ensure your estate planning documents provide for access to these accounts so that they may be managed according to your wishes.

Estate planning is important for young families in Georgia to ensure that their wishes are respected and their loved ones are taken care of in the event of their passing. Contact an experienced Atlanta Estate Planning Attorney at Trace Brooks Law to discuss the estate plan that is right for you and your family.

from Trace Brooks Law https://www.tracebrookslaw.com/estate-planning-for-young-families-in-georgia/

Benefits of a Revocable Living Trust in Georgia

There are many benefits to using a revocable living trust as your primary estate planning document in Georgia. In this article, we take a look at several benefits of revocable living trusts and the funding requirements required to take advantage of each benefit. Some benefits, like avoiding probate, are easily explained. Others, like incapacity planning and minimizing post-death disputes, are more nuanced. 

For more information, working with an experienced Atlanta living trust lawyer can be helpful. At Trace Brooks Law, we can walk you through the different benefits of a revocable living trust and how it can be a useful addition to your estate plan. Contact us today at (404) 492-9559 to schedule a consultation.

Added privacy by avoiding probate. In Georgia, a will must be filed with the probate court of the county where the decedent resided, as well as any ancillary probate courts. This requirement applies even if all assets pass outside the probate estate and no formal probate is necessary. Revocable living trusts, on the other hand, are private documents that are not typically filed with any court and therefore do not become public records. To take advantage of the added privacy that a revocable living trust provides, you must fully fund your trust.

Avoid out-of-state probate. A revocable living trust can be a valuable tool to help you avoid probate if you own or may acquire real property outside your state of residence. In general, a will must be probated in each state where you own real property at your death, in addition to the state of your primary residence (even if you do not own property in that state). However, if your out-of-state property is owned by your revocable living trust, there is generally no need to probate your will in that state because the property owner – the trust – has not passed away. By using this ownership structure, the trustee of the revocable living trust can more quickly and cost-effectively transfer title to the intended beneficiaries. To take advantage of this benefit, you only need to transfer your out-of-state real property to your revocable living trust.

Incapacity Planning. A revocable living trust can be an essential tool to ease the burden on your loved ones if you become incapacitated. Unlike a will, a revocable living trust can provide protection both during life and after death. With a fully-funded revocable living trust, the management of your assets during your incapacity and after your death becomes much simpler for your loved ones. While it may take some additional initial effort to fully fund your revocable living trust, it can be well worth it to ease the burden on your loved ones.

As the legal owner of the trust assets, a trustee of a revocable living trust has an easier time managing the assets in question than someone acting under a power of attorney. The trustee’s legal authority makes it easier for banks, government institutions, and other third parties to accept and recognize the trustee’s authority.

Additionally, a revocable living trust is one of the most powerful ways to protect yourself, your loved ones, and your wishes if you suffer from a weakened mental state later in life. Declining mental and physical function commonly occurs later in life and is often imperceptible at first. Many aging people go through a period of several years where they are not fully incapacitated but have decreased mental capacity and make increasingly poor decisions. A revocable living trust can help prevent others from taking advantage of you during periods of declining cognitive capacity by preventing you from engaging in harmful or ill-advised transactions.

With a revocable living trust, you or your agent can transfer your assets to the trust, allowing a co-trustee or successor trustee to manage your financial affairs. To enable others to manage your affairs under a revocable living trust, you can resign as trustee or be removed if you are determined to be incapacitated under the terms of the trust. The choice of a co-trustee or successor trustee is critical in protecting yourself and your loved ones, and should be carefully considered.

In Georgia, easing the administrative burden on loved ones by planning for incapacity is one of the primary reasons to use a revocable living trust as your primary estate planning document. Though assets must be in your revocable living trust to take advantage of this benefit, they can be transferred by you or by your agent acting under a power of attorney if you become incapacitated. 

Avoid post-death disputes. A revocable living trust can be a valuable tool to avoid post-death disputes, especially for those with complex family situations or those who wish to distribute their assets unequally or to non-family members. Legal disputes often arise when family members or other beneficiaries disagree with the distribution of assets outlined in a will or trust. By using a fully-funded revocable living trust, you may curtail these disputes because assets owned by the trust do not go through probate – making it more difficult for disgruntled family members to challenge the distribution of assets. Further, it is generally more difficult to successfully challenge a trust than a will. 

A post-death dispute can also arise if the surviving spouse makes a claim for “Year’s Support” from their deceased spouse’s probate estate. Assets that are held in a revocable living trust, however, are not subject to a potential Year’s Support claim. This can be advantageous in blended or contentious families, particularly where the spouse and heirs may have conflicting interests.

To avoid post-death disputes, owning your assets in a revocable living trust can help ensure that your estate planning wishes are carried out. You must fully fund your revocable living trust to help realize these benefits. 

Ease of moving to another state. For individuals who may move to another state, revocable living trusts offer greater flexibility and cost-effectiveness than wills. While states generally recognize wills created under the laws of another state, updating a will-based estate plan to take full advantage of the probate and estate administration laws in a new state can be a costly and time-intensive process. Revocable living trusts, however, avoid this issue, as a well-drafted trust contains all the necessary provisions, regardless of state of residence. Therefore, only the standard and less expensive powers of attorney and pour-over will need to be redone upon moving to a new state. 

It is important to update your estate plan, regardless of whether you use a will or a revocable living trust as your primary estate planning document, to reflect your new home state’s laws. Fully funding your revocable living trust is not necessary to realize this benefit.

Easily make and change specific bequests. Georgia law allows individuals to make specific bequests of tangible personal property such as artwork, collectibles, and jewelry before the remaining assets are distributed. A revocable living trust allows for the creation of a schedule of specific bequests that can include any type of property, including money, without the need for an attorney’s assistance. Therefore, creating and modifying a schedule of specific bequests in a revocable living trust is cost-effective and can be done at little to no cost without the help of an attorney. (You should, of course, advise your attorney of any changes to your specific bequests.) When using a will as your primary estate planning document, providing a specific bequest would require amending the will every time changes to the specific bequest list are desired, which would require the assistance of an attorney. Fully funding your revocable living trust is not necessary to realize this benefit.

To use a corporate fiduciary as your agent under your power of attorney. While most corporate fiduciaries are hesitant to serve as an agent under your power of attorney, some are willing to do so if they are also named as the successor trustee under your revocable living trust. If you become incapacitated, the corporate fiduciary would use their authority under the power of attorney to transfer your assets to your revocable living trust, where they will serve as successor trustees. Because you cannot typically change the ownership of tax-deferred retirement accounts, such as IRAs or 401(k)s, to a revocable living trust during your lifetime without incurring negative tax consequences, the corporate fiduciary should use your power of attorney to manage these accounts. Fully funding your revocable living trust is not necessary to realize this benefit.

As you can see, there are many benefits to using a revocable living trust as your primary estate planning document in Georgia. Contact an Atlanta Estate Planning Attorney at Trace Brooks Law today to discuss whether a revocable living trust is right for you. 

from Trace Brooks Law https://www.tracebrookslaw.com/benefits-of-a-revocable-living-trust-in-georgia/