Are you ready to manage your estate? Learn the basic terms that will guide estate planning.
What is estate planning?
Estate planning is a broad term that can look different for everyone. You should become familiar with two basic documents: a will and a trust. The American Bar Association is an excellent resource for all your estate planning needs. It can be overwhelming, but it isn’t as daunting as it seems once you familiarize yourself with the process and the different options.
How you plan your estate depends on several factors, such as your family size, whether you are widowed, married, or single, and the worth of your assets, such as your home or bank accounts. An asset can be your primary residence, vacation or rental property, jewelry, artwork, equipment, stocks, bonds, retirement accounts, ormoney in a bank.
Refrain from believing that estate planning is only for those who are wealthy. It’s a financial strategy that can benefit everyone, regardless of the size of their assets. If you think, ‘I don’t have enough assets for planning an estate,’ think again.
Why should you have a will?
“If you like your heirs, do this for them so they don’t have to fight after your death. You will make it much easier for them if you take the time to get this legal document in order. The will isn’t for you; it’s for your loved ones,” said Murray Saylor, of Saylor Law Firm. The firm assists clients with developing personal estate plans that achieve their objectives for transferring their wealth and facilitating family harmony.
A will is a simple legal document that leaves instructions for your property to be distributed to your beneficiaries after your death. It is the most common estate planning tool that individuals use. According to Georgia.gov, a valid will in the Peach State is required to be in writing and signed by one of two parties: the person making the will or the person who made the will designated. Laws vary by state, and though the basic procedures are similar across the United States, it is always best to check your state-specific laws.
Is a will worth the time and money?
What happens if you don’t have a will? It’s called intestate, which means you’re giving the probate court free rein over your assets. If you’ve left a house for your children to sell, they won’t get to decide its value; the probate court will. This can lead to unnecessary complications and expenses for your heirs.
It is much more complicated if you don’t have a will; you and your heirs gain several benefits if you have one. Without it, you leave it up to someone in probate court to decide what will happen to your personal property and how your money will be distributed. This can become a time-consuming and expensive process for your heirs.
“Our goal is peace of mind,” said Jammie Taire at SmithTaire Legal. “Sometimes, I get clients where a person passes, and the spouse has set up things perfectly; it’s a huge gift to your loved one. They are just coming to me to see if they missed anything. If you do proper planning, that can happen.”
How much will getting a will cost me? Should I consider a trust?
The cost of a will depends on the complexity of your assets and whether you choose to hire an attorney. According to Saylor, it can range anywhere from $3,000 to $5,000 in Georgia.
“As an attorney, I have reviewed many wills. Getting a will for less is possible, but you want to ensure it is done correctly,” Saylor said.
Taire said she charges $750 for a standard will, POA, and advanced directive. This can vary based on complexity, but a standard will is typically sufficient. Her trust planning starts at $3,500. Taire suggests you should consider a trust if you can afford it. Clients often choose this route to avoid probate because they want the privacy a trust offers — a will is a public record. A trust will typically provide the same information. The main difference is that trust can be used and changed while you are still alive, and a will is only effective when you die. Taire suggests that if a trust is something you can afford, you should do that. This will allow your loved ones to manage your money and home should you become incapacitated.
Trusts can also be established if a person is a minor or has a developmental disability. There are several kinds of trusts, the most common being a revocable living trust. With trust-held properties, probate courts are not involved.
If you are looking for a quick, affordable, and easy way to make a will, the National Council on Aging is a great place to start. It has helpful information, including suggestions on how to make your will. If you make a will without an attorney’s help, follow your specific state’s guidelines. Georgia’s government website can offer helpful and practical steps to ensure you make a legally correct will.
What is probate, and how can it be avoided?
Probate is a legal process you go through — even with a will — by which your property is distributed. If you didn’t leave clear instructions and a valid will on how you want your estate distributed, loved ones could be left with the hassle and expense of having the probate courts decide how your assets will be distributed in Georgia. You can transfer your assets to your designated beneficiaries to avoid going into probate.
Many states allow a transfer upon death deed where a parent living in a paid-for house can transfer it directly to a child or grandchild upon their death. Georgia is not one of these states. Though they do not allow you to transfer real estate upon death, there are several other ways for your loved ones to avoid probate. Taire suggested naming a beneficiary on all your accounts, such as bank accounts, life insurance, retirement accounts, and money market accounts. The beneficiary cannot access these accounts until the account holder is deceased. This is just another way to avoid probate.
What is an executor versus Power of Attorney, and why do I need to designate one?
Power of Attorney, or POA, is a legal document used when a person is still alive, while an executor is for after you die. They are the CEO of the estate and must carry out your wishes as best they can. There are two main types of power of attorney: financial and medical.
You can designate one or two people to be executors of your estate. An executor is a person or institution selected to carry out the terms of a will or trust after your death. People often choose to have an adult child as their executor. Consider asking before you name someone. It can be a big job, and they may need to be up for the task.
Frequently, people ask their attorneys or accountants to do this job. Reviewing your accounts with your executor or coexecutors is an excellent idea to ensure this person knows how to find your bank accounts, credit card accounts, titles to your vehicles and home, and any retirement accounts that still have money.
Planning can benefit you and your loved ones; you can leave one last gift for them before you die.
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