Roswell Law Blog

Are your children going to fight over your estate?

You know that you need to leave your assets to your children -- and, potentially, to your grandchildren -- when you pass away. You have started thinking about how you want to do this.

While digging into it, you have started to worry. Are the children going to wind up disputing the estate plan or fighting over the assets? Will you accidentally drive a wedge between two of your children after you're gone? How do you make this go smoothly and avoid these types of difficult arguments?

Tips for creating an estate plan

Putting off the creation of an estate plan is not uncommon. It's a topic that many Georgia residents would prefer to avoid. Furthermore, there is more to an estate plan than just writing a will. Estate owners should start by making a list of all their assets and liabilities. This provides the basis for moving ahead with an estate plan that designates what property will go to which beneficiaries.

It's possible to gift most or all of an estate during one's lifetime; although, there are limits if those gifts are to remain tax-free. In 2019, the limit for tax-free gifting per individual is $15,000. Over a lifetime, the total tax-free gifting limit is $11.4 million. These amounts can change, so it is worth keeping up with those changes if gifting is a significant part of an estate planning strategy. Many people do not realize that estate planning also involves planning for end-of-life care. People should consider what kind of care they want and who they want to make medical and financial decisions for them at this stage.

Celebrity deaths highlight importance of estate planning

Estate planning can be an important part of preparing to take care of family members after people in Georgia pass on. The difficulties that accompany death without a will can grow significantly along with the size of an estate. Nevertheless, some celebrities with massive estates and ongoing, valuable song royalties have passed away without leaving behind a clear plan. As a result, family conflicts may intensify and a significant amount of a valuable estate may be lost to court costs and legal fees.

The deaths of Prince, Aretha Franklin and John Singleton have drawn attention to the importance of estate planning to protect family wealth. Singleton, the famed director, passed away in April 2019, leaving behind a fortune that reportedly totals $35 million. However, he did not leave an updated estate plan. While he had seven children, he left only a will created in 1993 when he had one child alone. All of the children are contesting the distribution of the estate in court. There are some trusts reportedly created by Singleton, and those can pass without the scrutiny and disputes of probate court. However, the lack of an updated will is creating family division as well as economic losses.

Young beneficiaries and trusts

Georgia residents who have young children should make sure that their estate plans include more than just a will. A trust is necessary so that the children will not be able to inherit assets outright when they reach the age of 18; it can ensure that the assets will not be squandered and will be managed responsibly as determined by the trust instructions left by the parents.

The party appointed as trustee of the assets may be able to support the beneficiaries and establish important financial boundaries and guidelines. For example, a trustee can assist the beneficiaries with creating an income flow that will see to all of their needs while keeping the trust principal intact. The trustee can also help the young beneficiaries become financially literate so that they will have the skills necessary to properly handle the assets when they are granted more responsibility over them.

Blended families and estate planning challenges

When blended families in Georgia need to create an estate plan, they need to consider a few unique factors. A simple will may not be adequate enough to protect assets for biological children or fulfill other objectives. Trusts, however, are very flexible legal tools that can be adapted to complicated situations involving ex-spouses, stepchildren, and multiple divorces. There are many different options available.

A common type of trust for blended families is one that gives assets to a current spouse during their lifetime and then passes these assets on to biological children upon the spouse's death. This as known as an AB trust. In an ABC trust, assets are divided and distributed to a set of other trusts that each have their own set of rules and objectives. At one time, these types of trusts were used to avoid estate taxes, but they now play an important role with blended families.

6 reasons you need a health care proxy

Generally speaking, though you are getting older, you feel healthy. If you do wind up in the hospital for some reason, you know what type of care you want. You assume you will simply tell the doctors about it at that time.

That projected future may play out exactly like you hope, but there is really no guarantee. Without any paperwork in place, just how confident are you?

Passwords and other important information in estate plans

In Georgia, people who are planning how their estates will be handled should avoid overlooking some important details. In addition to having a will, power of attorney and other documents prepared, it is also important for people to make certain that their families understand how to find other important documents and access their digital accounts.

Many people have online accounts and password-protected devices such as tablets, smartphones and computers. After they die, their loved ones may be unable to access this information and these devices without the passwords to them. People should also make certain that their families know where to find important information and documents.

Reasons for single parents to make an estate plan

Many adults fail to make an estate plan, but it can be especially important for single parents in Georgia and around the country to do so. One of the functions of an estate plan for parents is to appoint someone to be guardian for their children. While this could be the other parent, if that parent is unable to step into this role for any reason, appointing a guardian can ensure that the child is raised by someone a parent chooses.

An estate plan is also an opportunity for a parent to leave instructions about how the child should be raised. While not all of these instructions may be legally enforceable, it still lets loved ones know what the parent's wishes are. The parent may want to create a trust that can receive the parent's assets. The child may have varying degrees of control over the trust depending on the parent's wishes. For example, a parent may only want the money to go toward education and similar pursuits. On the other hand, parents may leave this largely at the discretion of the trustee.

Choosing beneficiaries for IRAs

Making sure that they have named the right beneficiaries for their IRA is one of the many aspects of estate planning of which Georgia residents should be aware. Not designating someone or not updating the beneficiary designation when needed can result in significant expenses as well as frustration for surviving loved ones. To determine who should be designated, it is important for individuals to carefully consider certain factors.

One issue that has to be addressed is whether the IRA funds are to stay in the family. In situations in which individuals have no family or any desire to leave their IRA to their family, a favorite charity can be chosen as the beneficiary. However, many people tend to want to leave their IRA to family members.

Why a person should seek help with estate planning

Creating an estate plan online can be an effective way for Georgia residents and others to save money. However, it can also cause problems that may be avoided by creating estate plan documents with the help of a professional. For the most part, online services assume that an individual already knows what he or she wants a plan to look like. In many cases, a person doesn't know if this is true or not.

This is because individuals may not take the time to consider how family dynamics come into play when creating an estate plan. Furthermore, most people don't necessarily know how state law could influence their decision to create a trust or how the trust will be structured. In many cases, the only way to know if an estate plan meets a person's needs is to speak with a professional.

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Herman Law Firm, LLC
760 Old Roswell Rd., Suite 119
Roswell, GA 30076

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