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Duluth Georgia Estate Planning Legal Blog

Digital assets may complicate estate planning

Estate planning tends to be more straightforward under Georgia law when an individual only has physical assets. However, it is not uncommon for people today to have a variety of digital assets. These are almost anything that is stored on a server or accessed on a computer. Assets may include email accounts, bank accounts and brokerage accounts. They can also include a social media profile or a subscription to an e-commerce site.

The first step in creating an estate plan that takes these assets into account is to take an inventory. In addition to listing all the items that need to be included in an estate plan, be sure to have the password to an account or other important information available. This should all be listed in a will or kept where an executor will be able to find it.

Single parents and estate planning

For single parents in Georgia, estate planning involves important decisions that can have a huge impact on the future of a child. These decisions are based on a variety of factors that include both the capabilities and the limitations of offspring, and they consider things like schooling, living arrangements, friendships, and financial stability. A solid estate plan creates a situation where a child can seamlessly transition into a new life after the death of their single parent.

Single parents who work to build a healthy and supportive community for their children so that they can thrive independently show that they are truly committed to their children's future. One way to do this is to ensure that a positive relationship remains with the non-custodial parent if they are still in the picture. They are likely to become the guardian after a death, so ensuring they are in a position to create a good life is important.

Estate of deceased actress worth $6.8 million

New probate court papers have determined that the estate of Carrie Fisher, who passed away in 2016, is worth more than $6 million. Fisher is known throughout Georgia and many parts of the world after appearing as Princess Leia in several Star Wars films. The estate executor for the actress requested a final value for the state in order to begin final distribution of the assets.

Before passing away, Fisher stated in her will that she wished her estate be made part of her living trust. The beneficiary of this trust is her daughter, who is also a Hollywood actress. The assets within the estate include investment accounts, memorabilia, furniture, collectibles and rights to using her work for publicity. A certain portion of the assets was held in order to pay state and federal taxes.

Estate planning decisions are not always easy

Many people have a difficult time making estate planning decisions because they find it unpleasant to face their own mortality. Others recognize the importance but face hard choices based on specific issues with certain members of their family. This can be especially true when it comes to asset protection for high-net-worth Georgia residents.

An idealized version of estate planning often involves assets passed on in equal shares to children after death. However, financial planning professionals know that many household situations are not that simple. Children who have yet to demonstrate maturity and self-reliance, siblings who constantly fight with each other and blended families are merely a few of the potential scenarios facing an individual seeking to establish an estate plan.

Why upstream planning can be beneficial

Estate planners in Georgia may have heard of something called upstream planning. Those who implement this strategy will first give an asset that has significantly appreciated in value to someone who is older than they are. The asset is then given back to the individual who originally owned it, and when the asset is returned, the person who receives it gets a step-up in basis.

Upstream planning has gained in popularity because the lifetime gift tax exemption increased to $11.18 million with the recent changes to the tax code. Prior to the change, the exemption was far smaller. Typically, individuals didn't want to use most or all of their exemption by giving assets to someone who is older than them. While any asset could be used for upstream planning purposes, not all assets should be managed in this manner.

Common errors to avoid when creating a will

Estate planning is a necessary task to accomplish. At the very least, your estate plan should include a last will and testament. This document spells out how you want your assets to be distributed once you are gone. 

While drafting a will may sound relatively simple, it is vital to not make any errors during the process. If you make mistakes, your will may not be valid. An invalid will can cause a variety of problems for you and your loved ones. Here are some common mistakes to avoid when creating your will. 

John Singleton's will wasn't updated after 1993

Movie buffs in Georgia may have heard about the passing of John Singleton. He had an estate that was valued at about $35 million, but it is unclear how the assets will be divided. This is because his will had not been updated since 1993. At that time, only one of his seven children were born.

This means that the other six children are not included in his will. One of the children claimed that her grandmother was trying to keep them from inheriting any portion of the estate. Singleton's mother filed the will in probate court, but she listed his assets at only $3.8 million. Therefore, there is a chance that other assets are included in a trust that holds assets outside of the estate. However, it was not clear if this is the case.

Review estate documents regularly to avoid surprises

When Georgia residents with significant means think about the future of their property, they may have a vision for how their assets will be distributed to those they care about. Still, many people refrain from in-depth overviews of their estate because of the complex interpersonal and emotional questions that the task can raise. However, for people with wealth, it can be particularly critical to have a comprehensive plan in place. Preparing a will or creating a trust is a great step forward, but it can be important to regularly review the plan.

In many cases, people forget that they have included provisions that contradict with later ones. In other cases, they planned to make a significant bequest to people who are no longer alive. By reviewing their estate plan, people can help to ensure that the documents follow existing laws and reflect an internal consistency. It can be important to closely review a plan to make sure all assets are included, especially when people have significant overseas holdings. U.S. documents may not be sufficient to address their plans for assets held in another country.

How to handle passwords for digital accounts in an estate plan

When a Georgia resident creates an estate plan, they might overlook the need to ensure access to online accounts. Complicating this is the fact that writing down passwords is not secure. This may have larger implications if the estate owner runs a business. In December, the sudden death of a cryptocurrency exchange owner meant that clients lost access to $190 million in investments when his password could not be located. It's unclear whether they will ever be able to access it.

Writing down passwords is one solution, but it's not the best for security reasons. Placing a list of these passwords in a safety deposit box can enhance security, but passwords become outdated regularly. The tedious process of having to return to the safety deposit box and update the list every time a password is changed could result in the list falling out of date.

Mistakes executors should avoid

Georgia residents who have been named estate executors have a lot of work ahead of them. For instance, they must file income tax returns, get in touch with beneficiaries and take steps to secure assets. It is important to point out that executors have a fiduciary responsibility toward the beneficiaries. Therefore, they should not be ignored or otherwise kept in the dark at any point while the estate is being settled.

If the needs of beneficiaries are not met, it may be possible for them to remove an executor. As a general rule, it is important to defer to the language in a will or trust as much as possible. While being an executor does grant an individual certain power over an estate, it is best to use that power wisely. Those who are unable or unwilling to make decisions or take action in a timely manner should refuse the appointment when it is first offered.

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