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Be Careful of "Simple" Wills, Trusts and Estates Plans

Tonight's post on the simplicity of "simple" wills, trusts and estates plans was written by our Wills, Trusts and Estates Guru, Steve Worrall

"I just need a simple Will." As an estate planning attorney serving clients throughout Georgia, I hear this statement frequently. In over 32 years of practice, I have yet to hear a client say, "I want a complicated Will."

My client, without being informed of all of the options, sees no reason to do anything complicated, especially if it might costs more in legal fees. Sadly, what you may think of as "simple" estate is all too often filled with complications that, if not covered during the planning process, can create a nightmare for you and your heirs at some point in the future. Those complications can include:

Probate - Probate is the court process where property in your name is transferred after your death to the people you have named as beneficiaries in your will or who are specified by law as your heirs if you do not have a will. Probate can be expensive, public and time consuming. A revocable living trust is a great alternative tool that allows your estate to be managed more efficiently, at a lower cost and with much more privacy than probating your will. A living trust may be more expensive to create, but it can, if fully funded, avoid a potentially complex and costly probate proceeding.

Minor Children - If you have young children, you need to nominate a guardian, both for the long term and for the short term, but you should also think about creating a trust to hold your property for those children. If both parents die, and the children do not have a trust, their inheritance could be held and managed by a conservator appointed by the probate court until he or she turns 18, at which time the entire inheritance may be given to the child, outright and unprotected. By using a trust, either a living trust, described above or testamentary trust, which comes into existence after you pass away, you can make certain that any money left to your children can be used for their educational and living expenses and can be administered by someone you trust. You can also protect the inheritance you leave your children or other beneficiaries from a future divorce as well as from creditors.

Second Marriages - Are you part of a couple where one or both of you have children from a prior marriage or relationship? If so, you should carefully consider if a "simple" Will is enough for your family. Too often, spouses design and sign simple Wills in which they leave all of their property to each other, at the first death and then divide the property among their children if the other spouse has died first. Let's say the husband dies first. The wife inherits everything. Now, suppose she remarries and leaves everything she received to her new husband or to his children. She has now disinherited her children and also her previous husband's children of any inheritance left by their father. Couples in these situations should seriously think about creating a special marital trust to make sure that children of both spouses will be provided for. They should also consider providing something for their children immediately upon their death, so the children don't have to wait until the step-parent dies before receiving something from their deceased parent's estate, if anything ever.

Taxes - Georgia does not have a separate state estate tax. Federal estate taxes, from 2011 forward, only apply to estates over $5 million for individuals and $10 million for couples, (with those amounts increasing as they are indexed for inflation each year - so in 2015, the exemption for individuals is $5,430,000). But that does not mean that if your estate is less than that amount, you should forget about tax planning. Remember the old adage about that which is certain.

Incapacity Planning - Estate planning does not only involve planning for death. What would happen if you became disabled or incapacitated? You must have proper legal documents in place to enable someone you trust to manage your affairs if you become incapacitated. There are lots of choices that you need to be aware of when you authorize someone to make decisions on your behalf, whether that is to address your medical care or to cover your financial, legal and property affairs. If you fail to create these important documents while you have legal capacity, your loved ones might have to go through an expensive and time-consuming guardianship or conservatorship proceeding and petition a probate court judge to allow them to make those decisions on your behalf. By simply planning for your incapacity up front, you can more readily avoid those problems.

If you fail to properly address these potential obstacles, over the long term, your so-called "simple" Will can turn out to be extremely costly and incredibly ineffective. A one-size fits all "simple" Will may not fit you. A will bought off the store shelf or even found on line for a bargain price is almost certainly worth what you paid for it.

An experienced Georgia estate planning attorney can provide you with valuable insight and offer you effective tools to make sure your wishes are carried out efficiently and provide maximum protection and comfort for you and your loved ones for many years to come.

Steve Worrall

Steve works principally out of our Marietta headquarters but is available to all of our clients for their Wills, Trusts and Estates needs, whether in Atlanta, Lawrenceville, Canton, Gainesville or Savannah.

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