by BarryWho Pays Closing Costs in Georgia? A Buyer’s and Seller’s Guide
One of the most common questions we hear from both buyers and sellers is: “What am I actually paying at closing?” The answer in Georgia follows a general pattern, but it’s also negotiable.
What Buyers Typically Pay
As a buyer, your closing costs generally include lender fees, the appraisal, prepaid interest, escrow deposits for taxes and insurance, title search and examination fees, owner’s title insurance, the Georgia intangible recording tax, and your share of the attorney’s fee.
In total, Georgia buyers should expect 2% to 4% of the purchase price in closing costs, in addition to the down payment. On a $400,000 home, that’s approximately $8,000 to $16,000.
What Sellers Typically Pay
Sellers generally cover the real estate commission (typically 5% to 6%), the Georgia transfer tax ($1.00 per $1,000 of the sale price), their share of the attorney’s fee, mortgage payoffs, and prorated property taxes.
Seller closing costs typically run 7% to 9% of the sale price when the commission is included. On a $400,000 sale, that’s roughly $28,000 to $36,000.
What’s Negotiable
Almost everything is negotiable. In a buyer’s market, sellers often agree to a “seller concession,” which is a contributing toward the buyer’s closing costs. Buyers can shop for certain services like title insurance and home inspections.
What isn’t negotiable: the Georgia intangible recording tax and the state transfer tax. These are statutory and apply regardless of what the parties agree to. However, the parties can certainly agree on who will be responsible for paying these taxes.
How Edwards Law Can Help
At Edwards Law, we review your closing costs line by line. No surprises at the closing table.
Ready to close with confidence? Call us at 404-341-9377 or email info@edwardslawatl.com.
by BarryDo I Need a Will or a Trust in Georgia?
It’s one of the first questions we get from new clients: “Should I get a will or a trust?” The honest answer is that it depends. However, not in a vague, unhelpful way. There are specific factors that point clearly in one direction or the other.
What a Will Does
A will is the foundation of most estate plans. It lets you name who inherits your assets, designate an executor, and name guardians for minor children. For many families with straightforward finances, a will-based plan is exactly the right tool.
The trade-off is that a will goes through probate. In Georgia, probate isn’t as burdensome as in some states, but it does mean your estate becomes public record and the process can take several months.
What a Trust Adds
A revocable trust does everything a will does but also transfers assets outside of probate. That matters most when you own real estate in multiple states, have significant assets you want to keep private, want more control over how and when beneficiaries receive their inheritance, or want to provide for a family member who needs ongoing financial support.
A trust also provides a seamless management structure if you become incapacitated. Your successor trustee steps in immediately and no court intervention required.
Which One Is Right for You?
For most professionals in their 30s to 50s, the decision comes down to complexity and goals. If your primary concerns are naming guardians, directing assets to your spouse and kids, and getting basic protections in place, a will-based plan is efficient and cost-effective. If you have multiple properties, blended families, or specific distribution goals, a trust gives you more flexibility.
One important note: regardless of which path you choose, you still need powers of attorney and healthcare directives. A will or trust handles what happens after you die. Powers of attorney and healthcare directives handle what happens if you’re alive but unable to make decisions. All of them are essential.
How Edwards Law Can Help
At Edwards Law, we walk you through both options and help you decide which fits your family’s situation.
Ready to get started? Contact us today to schedule a consultation.
by BarryUnderstanding the Difference Between an LLC and an S-Corp for Tax Purposes
Choosing the right business structure is more than just a legal decision—it directly impacts your taxes, liability, and long-term success. Many small business owners debate between forming a Limited Liability Company (LLC) or electing S-Corporation (S-Corp) status. Here’s what you need to know.
LLC vs. S-Corp: Key Differences
✅ Taxation – LLCs are typically pass-through entities, meaning profits are taxed at the owner’s personal income tax rate. However, an LLC can elect to be taxed as an S-Corp, allowing business owners to take some income as distributions, reducing self-employment taxes.
✅ Ownership Restrictions – S-Corps have strict limits: no more than 100 shareholders, all of whom must be U.S. citizens or residents. LLCs offer greater flexibility in ownership and can have an unlimited number of members.
✅ Management Structure – LLCs can be member-managed (owners handle operations) or manager-managed (owners appoint a manager). S-Corps must have a board of directors and officers to oversee business operations.
LLC Taxed as an S-Corp: A Middle Ground
Some business owners want the flexibility of an LLC but also want to reduce self-employment taxes, so they elect for S-Corp taxation. Here’s how it works:
- The LLC remains a legal LLC but files taxes as an S-Corp with the IRS.
- Business owners pay themselves a reasonable salary, subject to self-employment tax, but take additional profits as distributions, which are not subject to self-employment tax.
- This structure can save thousands in taxes, but it also comes with stricter compliance requirements, including payroll and tax filings.
Common Mistakes to Avoid
- Assuming an LLC always provides better tax benefits—sometimes, an S-Corp election is the smarter choice.
- Not reassessing entity status as your business grows.
- Forgetting that S-Corp compliance requirements are stricter than LLCs, including payroll obligations and formal meetings.
How Edwards Law Can Help
Choosing the wrong entity could cost you thousands in taxes. At Edwards Law, we help business owners select the right structure to maximize tax savings and legal protection. Contact Edwards today and schedule a consultation today to optimize your business strategy.
by BarryDoes a Trust Provide Limited Liability Protection?
Trusts are commonly used in estate planning to protect assets, avoid probate, and ensure a smooth transfer of wealth to beneficiaries. However, many people mistakenly believe that placing assets in a trust provides the same kind of limited liability protection as a business entity like an LLC or corporation. This post will clarify the legal protections a trust does—and does not—provide.
What Is Limited Liability Protection?
Limited liability protection is a legal safeguard that shields an individual’s personal assets from business-related debts and lawsuits. This protection is typically provided by business entities such as:
- Limited Liability Companies (LLCs)
- Corporations (S-Corps and C-Corps)
- Limited Partnerships (LPs)
If a lawsuit is filed against an LLC, for example, the owner’s personal assets are usually not at risk—only the assets held by the LLC.
Does a Trust Offer Limited Liability Protection?
In general, trusts do not provide limited liability protection in the way that LLCs and corporations do. However, they can offer other forms of asset protection, depending on the type of trust used.
Revocable Living Trusts
A revocable living trust is a common estate planning tool, but it does not provide liability protection. Since the trust creator (grantor) retains full control over the assets in the trust, creditors can still go after those assets to satisfy debts or legal claims.
Irrevocable Trusts
An irrevocable trust, on the other hand, may provide some level of asset protection. Once assets are transferred into an irrevocable trust, they are legally separate from the grantor’s personal assets, meaning creditors may not be able to reach them—provided the trust was properly structured and not created to defraud creditors.
Key factors influencing asset protection with an irrevocable trust:
- The grantor cannot alter or revoke the trust.
- The trust must be established before legal claims arise.
- Certain state laws may impact creditor access to trust assets.
When Should You Use a Trust vs. an LLC for Asset Protection?
If your goal is estate planning, a trust is an excellent tool for managing assets, avoiding probate, and ensuring a smooth transition of wealth.
If your goal is limited liability protection, forming an LLC or corporation is usually the better option. LLCs and corporations are specifically designed to shield personal assets from business-related liabilities.
For maximum protection, a combination of both structures can be beneficial. For example, an LLC can own real estate or business assets, while a properly structured irrevocable trust can hold the LLC interests, offering both estate planning benefits and some level of asset protection.
Key Takeaways
- A revocable living trust does not provide liability protection.
- An irrevocable trust may offer asset protection but not the same level as an LLC.
- For liability protection, an LLC or corporation is typically a better choice.
- A well-designed estate plan may use both trusts and business entities for comprehensive protection.
How Edwards Law Can Help
Understanding how to protect your assets requires careful planning and legal expertise. At Edwards Law, we help individuals and business owners craft estate plans that safeguard their wealth and limit liability exposure. Whether you need a trust, an LLC, or both, our team is here to guide you.
Contact us today for a consultation and ensure your estate and business are properly protected!
by Barry5 Common Mistakes to Avoid During the Home Closing Process
Buying a home is one of the most significant financial decisions you’ll ever make. However, the closing process can be complex and fraught with potential pitfalls. By knowing what to expect and planning ahead, you can sidestep common mistakes that could delay or derail your closing. Here are five key mistakes to avoid.
1. Failing to Review Closing Documents in Advance
One of the most common missteps is not reviewing your closing documents before the big day. These documents include the Closing Disclosure, loan agreement, and title paperwork. Failing to understand these documents can lead to surprises, such as unexpected fees or terms.
Tip: Ask your closing attorney or lender for the documents at least three (3) days in advance. Then, take the time to review them and ask questions about anything unclear.
2. Not Budgeting for Closing Costs
Closing costs can range from 2% to 5% of the purchase price, but many buyers overlook these expenses until the last minute. This can lead to financial stress or even jeopardize the closing if funds are insufficient.
Tip: Work with your lender to get an estimate of closing costs early in the process. Then, ensure you have these funds readily available before closing day.
3. Overlooking Title Issues
A clear title is essential for a smooth transaction. Undisclosed liens, boundary disputes, or ownership claims can all cause delays or legal issues after the purchase.
Tip: Hire an experienced real estate attorney to conduct a thorough title search and purchase title insurance for added protection against future claims.
4. Skipping the Final Walkthrough
The final walkthrough is your last chance to ensure the property is in the agreed-upon condition. Skipping it could mean missing out on unresolved repairs or new issues.
Tip: Schedule the walkthrough as close to closing day as possible and bring a checklist to confirm that any agreed-upon repairs have been completed.
5. Ignoring Communication Deadlines
Real estate closings involve multiple parties—buyers, sellers, agents, lenders, and attorneys. Delayed responses to emails, calls, or document requests can cause unnecessary delays.
Tip: Stay proactive and responsive throughout the process. In addition, set reminders for key deadlines and keep all communication channels open.
How Edwards Law Can Help
Navigating the home closing process doesn’t have to be overwhelming. At Edwards Law, we specialize in making real estate closings seamless and stress-free. Our experienced team can guide you through every step, ensuring all documents are accurate and deadlines are met.
Ready to make your closing process as smooth as possible? Contact us today for a consultation and let’s get you one step closer to your dream home!
by BarryHow to Protect Your Personal Assets with the Right Business Entity
Starting a business is an exciting venture, but it also comes with risks. One of the most important steps you can take as a business owner is to protect your personal assets from potential liabilities. Choosing the right business entity can create a legal separation between your personal and business assets, safeguarding your financial future.
At Edwards Law, we help entrepreneurs and business owners select the right business structure for their unique needs. Let’s explore how the right business entity can protect your personal assets and set your business up for success.
The Importance of Asset Protection
When you operate a business, you take on various risks, including lawsuits, debts, and financial liabilities. Without the proper protections in place, your personal assets—such as your home, car, and savings—could be at risk if your business faces legal action.
This is where the right business entity comes in. By forming a legal structure that separates your personal and business assets, you create a protective barrier that shields your personal finances from business liabilities.
Business Entities That Protect Personal Assets
Several business structures can provide liability protection. Here are the most common options:
- Limited Liability Company (LLC)
- How It Works: An LLC is one of the most popular options for small business owners. It offers liability protection by separating personal and business assets.
- Key Benefits:
- Simple to set up and manage.
- Provides pass-through taxation, avoiding double taxation.
- Protects personal assets from lawsuits or debts related to the business.
- Best For: Entrepreneurs, freelancers, real estate investors, and small business owners seeking a balance between simplicity and liability protection.
- Corporation (C-Corp or S-Corp)
- How It Works: Corporations are separate legal entities that provide strong liability protection for owners and shareholders.
- Key Benefits:
- C-Corps can attract investors and issue stock.
- S-Corps offer pass-through taxation, avoiding corporate taxes.
- Best For: Larger businesses or those seeking to raise capital through investors.
- Limited Partnership (LP) or Limited Liability Partnership (LLP)
- How It Works: Partnerships provide liability protection for limited partners while allowing general partners to manage the business. LLPs extend liability protection to all partners.
- Key Benefits:
- Flexibility in management and profit-sharing.
- Liability protection for certain partners.
- Best For: Professionals like lawyers, accountants, or real estate investors.
Business Entities That Lack Personal Asset Protection
While some entities provide strong liability protection, others do not. If you’re currently operating under one of these structures, consider upgrading to a more protective option:
- Sole Proprietorship: The simplest business structure, but it offers no separation between personal and business assets. You are personally liable for all debts and legal issues.
- General Partnership: Similar to a sole proprietorship, a general partnership lacks liability protection for partners.
Additional Steps to Protect Personal Assets
Forming the right business entity is essential, but there are additional steps you can take to strengthen your asset protection:
- Separate Personal and Business Finances:
- Open a dedicated business bank account and credit card.
- Avoid mixing personal and business expenses.
- Maintain Compliance:
- File annual reports, pay taxes, and keep accurate records.
- Failure to follow state regulations can jeopardize your liability protection.
- Get Adequate Insurance:
- Consider liability insurance, property insurance, and professional indemnity insurance to cover unexpected risks.
- Draft Legal Agreements:
- Use contracts to define roles, responsibilities, and liabilities with clients, partners, and vendors.
How Edwards Law Can Help
Choosing the right business entity is a critical decision, but it can feel overwhelming. That’s where Edwards Law comes in. Our experienced team can:
- Evaluate your business goals and risks.
- Recommend the best entity to protect your personal assets.
- Handle all the paperwork, from filing formation documents to creating operating agreements.
We’ll ensure your business is structured correctly, so you can focus on what you do best—growing your company.
Contact Us Today
Don’t leave your personal assets vulnerable. Let Edwards Law help you create a solid foundation for your business with the right legal protections. Contact us today to schedule a consultation. With the right guidance, you can confidently protect your personal assets and achieve your business goals. Let’s get started!
by BarryWills vs. Trusts: Understanding the Differences
Planning for the future is one of the most thoughtful things you can do for your loved ones. But when it comes to estate planning, many people face the same question: Should I choose a will or a trust? Both documents are essential estate planning tools, but they serve different purposes and have unique advantages. Understanding the differences can help you make the best choice for your needs—and ensure your loved ones are cared for according to your wishes.
At Edwards Law, we specialize in personalized estate planning to fit your goals and priorities. Let’s dive into the key differences between wills and trusts.
What Is a Will?
A will is a legal document that specifies how your assets will be distributed after your death. It also allows you to:
- Name an executor to carry out your wishes.
- Designate guardians for minor children.
- Provide instructions for distributing personal property, such as jewelry or heirlooms.
Wills are simple to create and can address most estate planning needs. However, they must go through probate, a court-supervised process to validate the will and oversee asset distribution. Probate can be time-consuming and costly, depending on your state’s laws.
What Is a Trust?
A trust is a legal arrangement where you transfer ownership of your assets to a trustee, who manages them for the benefit of your chosen beneficiaries. Unlike a will, a trust:
- Can go into effect during your lifetime (a living trust) or after your death.
- Avoids probate, allowing for a quicker and more private transfer of assets.
- Provides greater flexibility and control over how and when your assets are distributed.
Trusts are especially useful for individuals with complex estates or specific goals, such as providing for children over time, managing large assets, or reducing estate taxes.
Key Differences Between Wills and Trusts
Probate:
- Wills must go through probate.
- Trusts avoid probate, which can save time and money.
Privacy:
- Wills are public records once they enter probate.
- Trusts remain private, keeping your financial matters confidential.
Timing:
- Wills only take effect after your death.
- Trusts can manage assets during your lifetime and after your death.
Cost:
- Wills are less expensive to create but may involve higher probate costs.
- Trusts require more upfront investment but can save money in the long run.
Flexibility:
- Wills provide straightforward instructions for distributing assets.
- Trusts allow for more detailed instructions, such as staggered payments to beneficiaries or managing assets for minors.
When to Choose a Will
A will might be the right choice if:
- You have a smaller estate with simple distribution needs.
- You want to name guardians for your minor children.
- You’re looking for an affordable estate planning option.
When to Choose a Trust
A trust might be the better option if:
- You want to avoid probate for privacy or efficiency.
- You have a larger or more complex estate.
- You need ongoing management of assets, such as for minor children or beneficiaries with special needs.
- You’re concerned about minimizing estate taxes.
Can You Have Both?
Yes! Many people use both a will and a trust as part of a comprehensive estate plan. For example, a trust can handle significant assets and avoid probate, while a will can cover smaller personal items or name guardians for children.
Get Personalized Estate Planning Advice
Choosing between a will and a trust—or deciding to use both—depends on your unique circumstances. At Edwards Law, we take the time to understand your goals and craft a personalized estate plan to protect your loved ones and your legacy.
Ready to secure your future? Contact Edwards Law today for a consultation. Let’s build the estate plan that’s right for you.
by BarryWhy Homeowners Need Title Insurance
When purchasing a home, you’re making one of the largest investments of your life. It’s an exciting milestone, but also a complex process with many moving parts. One critical step that sometimes gets overlooked is obtaining title insurance. This vital protection ensures your ownership rights are secure and protects you from unforeseen issues that could arise with the property’s title.
Let’s explore what title insurance is, the risks it mitigates, and why every homeowner needs it.
What Is Title Insurance?
Title insurance is a type of policy that protects property owners and lenders against financial loss from defects in a property’s title. Before a property is sold, a title search is conducted to identify any legal issues, such as unpaid taxes, liens, or ownership disputes. While thorough, title searches can sometimes miss hidden problems. Title insurance acts as a safeguard, covering the cost of resolving these issues if they arise after you’ve purchased the property.
Common Title Issues
Even with the most diligent title search, some issues may not become apparent until after closing. Here are a few common title problems that could jeopardize your ownership rights:
- Unknown Liens: Previous owners may have outstanding debts, such as unpaid taxes or contractor bills, which can result in liens against the property.
- Errors in Public Records: Clerical mistakes or incomplete records can affect the chain of ownership.
- Forgery and Fraud: Past deeds may contain forged signatures or fraudulent transfers, which can cast doubt on your ownership.
- Boundary Disputes: Misunderstandings or errors in surveys can lead to disputes with neighbors over property lines.
- Heirs and Estates: An undisclosed heir could come forward claiming ownership of the property if the estate of a previous owner wasn’t properly settled.
Without title insurance, resolving these issues could lead to costly legal battles, and in some cases, even the loss of your home.
Two Types of Title Insurance
There are two main types of title insurance: lender’s title insurance and owner’s title insurance. Both play an essential role in protecting your investment.
- Lender’s Title Insurance: Required by most lenders, this policy protects the lender’s financial interest in the property. However, it does not protect the homeowner.
- Owner’s Title Insurance: This optional policy provides protection for you, the homeowner, covering the full purchase price of your property. It ensures your rights as the owner are safeguarded against title defects.
While lender’s title insurance is mandatory, owner’s title insurance is an additional cost that’s well worth the peace of mind it provides.
Why Homeowners Need Title Insurance
- Protect Your Investment: Your home is likely your largest financial asset. Title insurance ensures your ownership is secure, protecting your investment from unexpected claims or disputes.
- Avoid Costly Legal Battles: Resolving title issues without insurance can lead to expensive legal fees. Title insurance covers legal costs associated with defending your ownership rights.
- One-Time Cost: Unlike other types of insurance, title insurance requires only a one-time premium payment at closing. This provides lifelong protection for as long as you own the property.
- Peace of Mind: Knowing that your property is free of hidden title issues allows you to enjoy your home without worrying about future ownership disputes.
- Compliance with Lender Requirements: Since most lenders require a title insurance policy, having one in place helps ensure the smooth completion of your home-buying process.
Who Needs Title Insurance?
Whether you’re a first-time homebuyer or a seasoned investor, title insurance is essential for anyone purchasing real estate. It’s especially crucial if you’re buying:
- Older Properties: These are more likely to have complex ownership histories or unresolved title issues.
- Foreclosures: These properties often come with a higher risk of unpaid liens or unclear ownership chains.
- Vacant Land: Boundary disputes or past claims on the property are common with undeveloped land.
Choosing the Right Title Insurance Provider
Not all title insurance providers are created equal. When selecting a policy, work with a trusted attorney or title company to ensure the coverage is comprehensive and tailored to your property. At Edwards Law, we guide homeowners through every step of the real estate process, including reviewing title policies to ensure your investment is fully protected.
We’re Here to Help
Althought title insurance may not be the most glamorous part of buying a home, it’s one of the most important. By protecting you from unforeseen title issues, it provides financial security and peace of mind, allowing you to fully enjoy your new property. At Edwards Law, we’re here to help you navigate the complexities of real estate transactions and safeguard your investment.
If you have questions about title insurance or need assistance with your home purchase, contact us today and let us help you protect what matters most!
by BarryGeorgia’s Amendment on Foreign Land Ownership and How It Impacts Foreign Real Estate Investment
For foreign investors interested in acquiring real estate in Georgia, understanding local laws is crucial to avoiding costly pitfalls. One of the most significant pieces of legislation impacting foreign real estate investment in the state is O.C.G.A. § 2-1-7. This law imposes restrictions on foreign nationals and entities acquiring certain types of land, particularly agricultural land and property near military bases.
Whether you’re a real estate investor, a foreign corporation, or an individual looking to invest in Georgia, it’s important to be aware of the provisions under this law to ensure compliance and protect your investment. In this post, we’ll explain the key aspects of O.C.G.A. § 2-1-7, how it affects foreign investors, and provide practical advice on how to navigate these restrictions.
Key Provisions of O.C.G.A. § 2-1-7
The Georgia law O.C.G.A. § 2-1-7 places specific restrictions on nonresident aliens and certain foreign entities seeking to acquire land in the state. The key points include:
Restricted Land Types: Nonresident aliens are prohibited from acquiring an interest in:
- Agricultural land: Land that can be used for farming, timber production, and similar activities.
- Land within a ten-mile radius of a military base: This includes military installations and military airports within the state.
Who Is a Nonresident Alien?: A nonresident alien is defined as:
- An individual who is not a U.S. citizen or legal resident and has been physically absent from the U.S. or Georgia for extended periods.
- A corporation or business entity domiciled in a foreign country designated as a foreign adversary by the U.S. Secretary of Commerce (this currently includes countries such as China, Russia, Iran, North Korea, and Venezuela).
Exemptions and Special Situations
Under certain circumstances, a nonresident alien may acquire a possessory interest in the restricted lands, but the law requires that these interests be disposed of within a set time:
- Security for Indebtedness: A nonresident alien can acquire agricultural or restricted land if it is part of a debt enforcement process (e.g., foreclosure or lien enforcement), but the land must be sold within two years.
- Inheritance: If a nonresident alien acquires the land through inheritance or a will, they have one year to dispose of the property.
- Termination of Nonresident Alien Status: If the individual or entity’s nonresident alien status changes, the restriction on ownership may be lifted.
It’s important to note that these restrictions do not apply to residential property, meaning foreign investors can purchase houses, residential buildings, or land intended for residential use without facing these limitations.
How Does This Affect Foreign Real Estate Investors?
For foreign real estate investors, particularly those looking to invest in agricultural land or properties near military installations, O.C.G.A. § 2-1-7 presents a significant barrier. Failing to comply with the law can lead to voided transactions, resulting in the loss of the property and the investment.
- Agricultural Land Investment: If you’re interested in purchasing agricultural land for farming, timber production, or other commercial purposes, this law will require careful planning. Nonresident aliens are restricted from holding these types of property unless acquired under specific exemptions, and even then, the ownership must be temporary.
- Land Near Military Bases: Investors looking to acquire land near military installations must be aware of the 10-mile restriction radius. This is particularly relevant for those interested in property development or large-scale land acquisitions near Georgia’s many military sites.
Planning Your Real Estate Investment Strategy
Foreign investors can still invest in Georgia real estate, but it’s crucial to plan your purchases carefully to avoid running afoul of O.C.G.A. § 2-1-7. Here are some practical steps you can take:
- Know Your Land Type: Before making any purchase, verify whether the land is considered agricultural or falls within the restricted zone near a military base. Work with a real estate attorney to assess the zoning status of the land and ensure it complies with local laws.
- Understand Your Status: If you or your business is considered a nonresident alien under Georgia law, be sure to understand the limitations on acquiring land. Pay special attention to the countries currently designated as foreign adversaries by the U.S. Secretary of Commerce, as this will impact your ability to own land in Georgia.
- Explore Exemptions: If you find yourself acquiring restricted land due to foreclosure or inheritance, understand the deadlines for selling the property and plan accordingly. This can help you avoid losing the investment.
- Focus on Residential Properties: Since O.C.G.A. § 2-1-7 does not apply to residential properties, foreign investors can confidently explore opportunities in Georgia’s residential real estate market, including single-family homes, condos, and apartment buildings. This may be a better route for long-term investments without the risk of restricted land ownership.
Conclusion
While O.C.G.A. § 2-1-7 restricts foreign ownership of certain types of land in Georgia, it doesn’t mean foreign investors are barred from real estate investment altogether. By focusing on residential properties, understanding the type of land you’re purchasing, and working with a real estate attorney, you can navigate these restrictions and make informed investment decisions.
At Edwards Law, we specialize in helping foreign investors navigate Georgia’s real estate laws. Contact us today to schedule a consultation and let us help you make the most of your real estate investments in Georgia.
by BarryReviewing Your Estate Plan after the Death of a Loved One
The death of a loved one is never easy. Regardless of your relationship with the deceased (for example, a relative, significant other, or close friend), you need space and time to process and grieve your loss. Once you have had time to cope with all that has happened, you should consider updating your estate plan in light of your loved one’s death.
Although your estate plan primarily focuses on what will happen if you become incapacitated (unable to make or communicate your wishes) or die, the death of a loved one can have a significant impact on your planning. If you have an estate plan, one of the first things you need to do when a loved one dies is to review the documents with the following questions in mind:
Was your deceased loved one named as a beneficiary of money or property under your will or revocable living trust? If so, do your documents address what happens to that money or property should your loved one predecease you?
One of the main objectives of establishing a will or revocable living trust is to create a plan for what will happen to the things you own at your death. If you have strong feelings about who should receive your money and property, you must name who will inherit from you and also who will inherit the money and property if your first choice dies before you.
If your will or trust does not list a contingent (backup) beneficiary, the gift in question is canceled when the first-choice beneficiary passes away, and the accounts and property you wanted to leave to your now-deceased loved one become part of your general estate and will be distributed according to the remaining terms of your will or trust. This cancellation can be problematic if your beneficiary has a spouse, children, grandchildren, or other loved ones whom you would have wanted to receive the beneficiary’s inheritance instead.
Some states have enacted antilapse laws to protect against this result. In these jurisdictions, the beneficiary’s heirs will receive the gifts. There are a few caveats and distinctions from jurisdiction to jurisdiction. For example, some states limit the heirs who can benefit from antilapse laws to blood relatives.
Is a trusted decision-maker now deceased?
As part of your comprehensive estate plan, you likely selected several different important decision-makers to act on your behalf if you become incapacitated (agents under your financial and medical powers of attorney and a successor trustee) or to wind up your affairs after your death (a successor trustee, personal representative, or executor). If your deceased loved one held any of these positions, make sure a backup was nominated. If not, you need to update the affected document to include a new first choice and at least one alternate. If you have already named a backup in the document, you will want to update your document to name your backup as your new first choice and remove your deceased loved one’s name to prevent confusion when a third party reviews the document.
Personal representative (also known as an executor). This trusted individual, appointed in your last will and testament, is responsible for collecting all your accounts and property, paying your outstanding debts and taxes, and distributing your money and property to your named beneficiaries after your death. This person’s task is to wind up your affairs, which can be time-consuming. If your chosen personal representative dies before you and there is no named backup at the time of your death, the probate court will use your state’s laws to determine who is next in line to serve as personal representative.
Co-trustee or successor trustee of your trust. Serving either with you (as co-trustee) or after you become incapacitated or die (as successor trustee), this trusted person or entity is charged with managing, investing, and distributing the money and property from your trust to you during your lifetime (if you are incapacitated or are otherwise unable to act as trustee) and to your chosen beneficiaries after your death.
If your deceased loved one was a co-trustee with you, you should review your trust agreement to see what happens next. There may be a provision that either allows you to continue serving as the only trustee, names a specific person to step in and serve with you as co-trustee, or describes how to determine who your new co-trustee will be.
If your deceased loved one was named as your successor trustee, nothing noticeable will happen with respect to how your trust is managed right now. However, if you become incapacitated or die and there is no successor trustee, your loved ones must look to your trust agreement for guidance on filling the vacancy. Your trust may provide that a certain number of your beneficiaries can appoint a new trustee without court involvement, or your trust might require that the court approve any new trustee. The outcome will depend on the trust’s wording and your state’s laws. Because your trust is revocable and amendable during your lifetime, it is best to update your trust to appoint a new successor trustee or change any of these provisions as needed while you still have the ability to do so.
Agent under a financial power of attorney. Your agent is an individual you choose to manage your property and finances (such as communicating with your mortgage company, paying your bills, or accessing funds in your bank account for your care) on your behalf. If the person you selected is deceased and there is no named backup, no one else can act on your behalf when needed. If you become unable to manage your property and finances without appointing an agent in a financial power of attorney, your loved ones will have to go to court and have someone appointed by a judge to take care of your financial and property matters. The judge will make this determination based on state law, which prioritizes a spouse or blood relative serving in this role, and the person selected may not be the person you would have chosen. Not only is this process time-consuming during a stressful time, but it can be expensive and exposes the details of your condition and family dynamics to the public.
Agent under an advance directive for healthcare. Your agent under your advance directive for healthcare is typically authorized to make decisions or communicate your medical wishes in the event you are unable to do so yourself. Because this person can act only when you cannot, you may not feel an immediate need to update your advance directive for healthcare if your chosen agent has passed away. However, if you have an accident, become incapacitated, or are otherwise unable to communicate your medical wishes and you do not have an agent who can act for you, your loved ones must go to court to have a guardian appointed before anyone can speak on your behalf. The judge will look to the standards and guidelines provided under state law to aid them in appointing the appropriate person, who may not be the person you would have chosen to make your decisions. Second, the selected person may not know your wishes about the medical care you want to receive.
Guardian for your minor child. You have likely invested a lot of time and consideration in deciding who you would like to serve as the guardian of your minor children if you and the children’s other parent are unable to care for them. If the loved one you have selected has passed away, it is imperative that you update this selection. While your circumstances may vary, if your chosen guardian is unable to serve for any reason, and you have no alternate guardian nominated, the probate court will determine who will raise your child. As with other roles, the selected person may not be the one you would have chosen, and absent input from you, the judge may have limited information when making this critical decision.
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We understand that you are grieving the loss of a loved one. When you are ready, we are here to help you take the next step in your estate planning journey, whether you are starting, completing, or updating your estate plan. Contact us today to schedule your in-person or virtual appointment.