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Duluth Georgia Estate Planning Legal Blog

Dealing with timeshares in an estate plan

Georgia residents purchase timeshares because they allow them to save money while enjoying designated weeks at their favorite resorts, but selling or disposing of them can be challenging. This is important because most timeshare agreements include what is known as an in perpetuity clause that requires owners to keep paying fees and covering monthly maintenance charges until they die. These fees can be as high as $3,000 per year at luxury resorts, and timeshare owners may also be responsible for paying the costs of correcting code violations and making repairs to the property in question.

Timeshare purchases were once treated in much the same as other types of real estate transactions, but they are now generally sold on a right to use basis and no deed changes hands. This is also how spas and gyms sell memberships. Timeshare purchase agreements spell out who is responsible for paying fees and maintenance charges, and those considering such a purchase would be wise to read them carefully before signing. This is because timeshare salespeople sometimes encourage their clients to add their children to the document. While this could make it easier for children or other relatives to use the property, it could also leave them legally responsible for meeting ongoing monthly costs.

The importance of updating estate plans after a divorce

One life event that some Duluth residents do not realize can have a direct impact on their estate plans is divorce. Contrary to popular misconception, divorce settlements, decrees and intentions do not always take precedence over the state’s laws of intestacy. Regardless of why a relationship does not work out, if the testator does not revise her or his estate plans to reflect the divorce, the state may have the final say over who inherits assets and raises dependents when a person dies. 

One does not have to be old, in a relationship or deceased to benefit from having a will and other estate planning documents. Valid estate plans can keep family members and heirs from fighting over and disputing the testator’s wishes and prevent the courts from having to get involved in the distribution of assets as well as prevent probate issues. When reviewing your estate plans for revision, keep the following information in mind: 

Avoid estate planning errors that start family conflict

In some cases, estate plans may trigger family feuds. That's why Georgia estate owners who are planning for the future should take certain steps to make conflict less likely.

For example, choosing the right executor is important. People often default to the oldest child or a spouse, but they should consider who is best suited to a position that requires organizational skills and strong ethics. Some executors might fail to communicate with other family members or file the necessary paperwork. In some families, there might be accusations that the executor is stealing from others. One solution is to appoint a professional. A corporate trustee usually manages large estates while a professional fiduciary may manage a smaller one.

Strategies for reducing estate tax

Although the current federal exemption is more than $11 million, some Georgia residents may still need additional protection against estate taxes. Annual gifting is one way to do this. Individuals can gift $15,000 per year per recipient, and this means couples can gift $30,000.

Charitable giving, particularly using a charitable lead trust, is another way to reduce estate taxes. The CLT makes annuity payments to the charity, and when a certain time period has passed or the settlor dies, the remaining assets go to a beneficiary. With an irrevocable trust, assets are removed from the estate. However, the settlor can still control the management of those assets.

Understanding the basics of estate planning

The days and weeks following the passing of a loved one in Georgia can be difficult for those left behind. This is especially true when it comes to figuring out who gets certain cherished possessions, what happens with financial accounts and even funeral preferences. But with proper estate planning, all of these decisions can be made in advance and based entirely on what the estate owner had in mind. A common first step is to create a will. However, there are other aspects of estate planning that often go overlooked.

The estate administration and probate process can be streamlined or simplified with some additional planning. For instance, having beneficiary designations for life insurance policies, annuities and retirement accounts may allow the probate process, which is the reading of a will and settling of an estate, to be bypassed altogether so that assets can be distributed sooner. With some IRAs and annuities, it's possible for a beneficiary to only take the required minimum distribution to preserve the tax advantages sometimes associated with these assets.

Pastors are unlikely to have adequate estate plans

Most people in Georgia who have attended a funeral understand how familiar pastors are with the reality of death. After speaking at so many funerals and attending to terminally ill church members, one might assume that pastors are more likely than most other professionals to have estate plans in place. According to a recent survey, that simply is not the case.

According to a study done by the Southern Baptist Convention, pastors of all age groups are consistently procrastinating when it comes to getting wills, healthcare directives and other estate planning essentials in place. The vast majority of survey respondents were aware that having end of life and estate plans in place makes things easier for loved ones left behind, but that had not prompted them to make essential arrangements.

Estate planning important for small business owners

Small business owners in Georgia may be particularly concerned about how to handle their business after they pass away. With the news that music legends Aretha Franklin and Prince died without a will, the consequences of passing away intestate have been widely discussed. Family members have been caught up in ongoing legal disputes about these musicians' substantial estates. However, these celebrities were far from alone; according to one survey, 58 percent of Americans don't have a will. While most entrepreneurs' estates may not rival Franklin's or Prince's, it can be equally important to create a clear plan for the future.

By creating a will, people can determine what will happen to their properties after they die. Without a will, the decision is left to state law and the courts, regardless of sentiments expressed by the person who passed. Family feuds can become bitter and disputes develop over the assets. This can be especially true for small business owners. The future of the business may be at stake in a lengthy court and probate process, and much of its value may be squandered in legal fees. Without someone operating the business, it may cease to do business and even fall into bankruptcy in the long run.

Soul star Aretha Franklin passes away without a will

Georgia fans of renowned singer Aretha Franklin may be giving new thought to estate planning after the news that the 76-year-old star passed away without a will. She died in August after a long fight against pancreatic cancer, but it was discovered that she had never made a will. Her niece has filed with the probate court to be recognized as executor of the estate, and her four sons have also registered as interested parties before the court. However, because she did not have a will or other estate documents in place, her estate could take longer to process and come at a higher cost to her heirs.

Franklin's lawyer said that he had advised her to create trusts, a will and other major estate documents during her lifetime, but that she had never done so. Her estate is estimated to be valued at $80 million and will now be handled according to Michigan's intestacy statute. That means that her estate will be handled in the probate court, and all of the issues involved will be public record - including the value of Franklin's music catalog.

Making an estate plan for cryptocurrency

When people in Georgia consider their plans for passing on their property in the future, they may frequently think about assets like real estate, bank accounts and investment funds. However, the developing interest in cryptocurrency highlights other types of digital assets that can require special attention during estate planning. People need to be able to pass on their cryptocurrency assets to their beneficiaries, but without a traditional bank structure, it can be easy for these major assets to be lost or abandoned rather than properly transferred.

By thinking about cryptocurrency and other digital assets when making an estate plan, people can ensure that they have taken care of both the legal and technical preparations that are needed to transfer their bitcoin or other digital currencies to their beneficiaries. The same estate planning principles used with more traditional properties still apply when transferring these assets. The executor of the will needs to know which assets exist and how to access them. However, the highly secure and password-protected nature of these assets requires special care to pass them on, especially as there is often no central authority or responsible party to present a death certificate for access.

Trusts, estates and tax reform

Georgia residents can include trusts in their estate plans to ensure that assets are distributed in a certain way. With the passage of the Tax Cuts and Jobs Act, it is important that individuals who do use trusts are aware of how the trusts can be impacted.

Individuals are able to claim deductions on state and local taxes for up to $10,000. However, there has been some uncertainty about whether the limit is also applicable to estates and trusts. The taxable income for estates and trusts is determined with the same calculation used for an individual in many cases, which would imply that the $10,000 limit is applicable for estates and trusts beginning with the 2018 tax year.

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