... Cont'd from Part 1
How Does a Will Affect Estate or Inheritance Taxes?
Estate tax is a federal or state tax on the value of your estate that exceeds a certain amount (the exclusion amount). This is assessed against and paid from the estate of the decent. Inheritance tax is a state tax on the amount that your receive from an estate. There is no federal inheritance tax. Georgia does not have estate or inheritance taxes. However, the federal estate tax is still applicable. In 2010 and 2011, the estate tax exemption amount for a single testator is $5 million or $10 million for spouses. There are also new provisions in place to allow one spouse to use the unused estate tax exemption of the other spouse. So it is possible for an individual to have an exclusion amount of $10 million. It is also important to not that you can pass an unlimited amount to your spouse at death without tax. Warren Buffet could pass his entire estate to his wife without paying estate tax. However, when she passes away, she will incur taxes on the value of the estate above available exemptions. Sophisticated estate planning procedure can assist in allocating funds into complex entity or trust relationships to minimize the amount of tax owed.
As we have seen over the past few years, the estate tax law is always changing. You should re-look at your estate plan routinely in order to make sure it achieves your intent.
How long does my will remain valid?
The mere passage of time has no effect on the validity of a will. Of course, laws and circumstances may change, which may render a will ineffective or create unintended results. You should review your will at least once every two or three years, and you should always review your will if you have a major life change, such as a marriage, divorce, birth or adoption of a child, or a substantial increase or decrease in wealth.
How Do I Change or Revoke a Will?
You can change or revoke your will at any time until you pass away or become mentally incompetent. (O.C.G.A.§ 53-4-40).Recall that your will does not take affect until it is admitted to a probate court at the time of your death. Until that time, it is a preparatory document. There are several ways to change or revoke a will. You can change a will by executing a codicil, which is a type of modification or addition to your will. (O.C.G.A.§ 53-4-43). Another option is that you make an entirely new will. A new will will revoke any prior will. (O.C.G.A.§ 53-4-42).Or you can simply destroy the will. (O.C.G.A.§ 53-4-44). Of course, if you destroy the will you must make another will or you may pass away intestate. You do not need to give any notice to your beneficiaries if you change your will. Your beneficiaries have no say in your decision regarding your will and do not need to approve any change to your will.
Is my will from another state valid in Georgia?
A will that was executed in another state that meets the requirements of a valid will in Georgia is usually valid in Georgia. However, if you have moved to Georgia from another state, it is a good idea to have your will reviewed by a practicing attorney in Georgia to ensure that it is valid under Georgia law and that its provisions will have the same intended effect if you die a resident of Georgia.
How Much Does it Cost to Make a Will?
Attorneys usually charge an hourly rate for their time or a flat fee for a particular service. In either case, your attorney should be able to give you an estimate of the fees for the drafting and execution of your will. Typically the process includes at least one initial meeting with the client, legal research, preparing recommendations as to the content of the will, drafting the will, making revisions based on the client's review and supervising the execution of the will. The cost usually depends on the amount of time needed to complete the process, and the amount of time needed to complete the process usually depends on the complexity of the client's will.
Do-It-Yourself Will Programs or Documents Sites
Writing a will involves making decisions requiring professional judgment that can be obtained only by years of study, training and experience. In addition, the laws governing wills and probate are always changing. You should not write your own will or use a form or computer software purchased from an office supply store or online retailer. A do-it-yourself will may leave your estate and your beneficiaries in worse shape than if you died without a will. A practicing attorney with experience in drafting wills can provide the best advice to you about the distribution of your estate and draft a will that is best for your individual situation and intentions.
Does Getting Married Affect My Will?
Possibly. Under Georgia law, your spouse is entitled to one year’s support from of your estate. If you have a will and get married, the will is still effective. However, the wife will have priority to the one year of support from the estate. The rest of your estate will be distributed according to your will. (O.C.G.A. § 53-4-48). If you make the will prior to marriage, but include a provision in contemplation of marriage, then you can avoid this 1/3 share minimum and allocate the amount of property you wish to your spouse. If you do not have such a provision in your will, you should execute a new will as soon as possible following your marriage.
Does divorce revoke my Georgia Will?
Not exactly. Getting divorced does not revoke your will. However, Georgia law applies special provisions regarding your spouse. Specifically, your spouse is treated as having predeceased you. (O.C.G.A. § 53-4-49). There are many other aspects of your estate affected by divorce. Following a divorce you may need to modify your will or execute a new will. You should speak to an attorney to discuss your needs following divorce.
What if I have Another Child or Adopt a Child?
If you a adopt a child, the child is treated as your natural child. So I will treat this issue collectively with having a new child. If you execute your will prior to the birth of a child, then the child is effectively not treated under the will. As such, your child will be entitled to an intestate share of your assets. The rest of your assets will pass accordingly to your will. This is almost never the intent of a testator. If you execute a new will following the birth or adoption of a child, then the child is addressed under you will and your will controls the distribution of your property to your children.
Excluding a Spouse or Child
Under the Georgia Statute a testator can validly exclude a spouse or minor child. (O.C.G.A. § 53-4-1). This is very different from other states that have the concept of elective share. However, Georgia has a similar provision to protect a spouse. The spouse or minor child may petition the probate court for one year’s support. (O.C.G.A. § 53-3-1). The spouse may ask the court for a specified amount or property, but, if there is an objection to the request, the court will estimate the funds based on the current needs of the spouse and child. (O.C.G.A. § 53-3-7). The funds to support the minor child and spouse will be drawn out of your estate for their support and maintenance for a period of 12 months following your death. If you try to provide your wife a certain amount in your Georgia Will to take the place of the year’s support, your spouse has the right to choose to take under your Will or the statutory entitlement. (O.C.G.A. § 53-3-3).
In order to exclude a biological child, you must put language in the will specifically excluding that child. If you fail to address the child, either individually or collectively, then the child will be treated as pretermitted. This means the child will inherit an intestate share of your estate. (§ 53-4-48). This is similar to the situation described above in “adopting or having a new child". The same rule applies to children who are born within 10 months after your death. If you do not address the child in your will, the child receives a share of your estate as though you had died intestate (without a Will). (O.C.G.A. § 53-4-48).
What is a living will?
A living will is not the same as a last will and testament. A living will is a type of health directive that allows you to express your preference regarding life-sustaining medical procedures in the event of a terminal condition or a state of permanent unconsciousness.