As the summer of 2020 approaches and America cautiously tries to restore some semblance of normalcy, it is a good opportunity for many people to consider and review their estate plans. Every person must consider some form of estate planning and there are some basic steps in the process to ensure adequate preparation of an effective estate plan. Discussing an estate plan with a tax and legal professional is a wise course of action in this situation and will ensure the best possible results.
- Draft a will.
A will sets forth your wishes as to who you want to inherit your property. It also allows you to name a guardian to care for young children in certain circumstances.
- Consider a trust.
Anyone who owns significant assets including real property, such as a personal residence, and intangible property, such as stocks and retirement accounts, may want to consider a trust, specifically a living trust. A trust is an artificial legal entity that requires some trust property (corpus), a trustee, beneficiaries, and some trust purpose.
- Draft health care directives.
An advance healthcare directive, also known as a living will, personal directive, advance directive, medical directive or advance decision, is a legal document in which a person specifies what actions should be taken regarding their health care if they are no longer able to make decisions for themselves because of illness or incapacity.
- Draft a financial power of attorney.
A financial power of attorney (POA) is a legal document whereby a person (principal) grants an agent the authority to act on his or her behalf in financial matters. A durable power of attorney gives a trusted person authority to handle finances in the event of incapacity.
- Protect the property of your children.
It is important to name an adult to manage the money and property that you transfer to your minor children upon your death. This may be the same person as the personal guardian named in your will.
- File forms designating beneficiaries.
A valuable tool for transferring property is the ability to designate a bank or retirement account as “payable on death,” which transfers ownership of the account automatically on your death to your beneficiary and eliminates the need for probate.
- Consider life insurance.
Any person with dependents should consider life insurance. Homeowners with families, minor children, and significant debt should surely consider life insurance.
- Learn about estate taxes.
The estates of most Americans will never pay federal estate taxes. For deaths in 2020, the federal government will assess estate tax at your death only if your taxable estate is worth more than $11.58 million. Married couples may transfer up to twice the exempt amount tax-free, and all assets left to a spouse (as long as the spouse is a U.S. citizen) or tax-exempt charity are exempt from estate tax.
- Cover funeral expenses.
It is a good idea to set aside funds specifically for this purpose such as a payable-on-death account at your bank for funeral and burial expenses.
- Make final arrangements.
Make sure that your end-of-life wishes are clear, especially regarding organ donation and whether you desire to be buried or cremated.
- Protect your business.
Business owners should have a succession plan if they are the sole owner or a buyout agreement if they have partners or co-owners.
- Store your documents safely.
The following documents must be in a safe, dry place but accessible.
- insurance policies
- real estate deeds
- certificates for stocks, bonds, annuities
- information on bank accounts, mutual funds, and safe deposit boxes
- information on retirement plans, 401(k) accounts, or IRAs
- information on debts: credit cards, mortgages and loans, utilities, and unpaid taxes
- information on funeral prepayment plans, and any final arrangements and instructions
It is now possible in Georgia to execute, witness and notarize wills, codicils, powers of attorney, advance directives for health care, and other documents remotely. These documents must still be executed in the physical presence of others through audio and video technology or similar real-time means of video conferencing so all parties may communicate by sight and sound. Contact The Gartzman Law Firm for help with any of these documents.
The documents contained in a typical estate plan help prepare all family members for the situations when important health and financial decisions are required. The COVID-19 quarantine allows you to take care of your estate planning needs from the comfort of your home. Take advantage of this temporary situation. Formulating an estate plan requires the assistance of an estate planning and tax professional to help individuals consider all relevant, necessary issues, and precisely prepare and draft their documents. The Gartzman Law Firm can help you formulate an effective estate plan. Call today at (770) 939-7710.