Estate Planning

by Barry

Reviewing 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.

We Are Here to Help

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.

by Barry

Four Tips for Every New Homeowner

Congratulations on the purchase of your new home! Whether this is your first home or you are upgrading or downsizing from your current home, the purchase of a home is a big event in your life. When major life events occur, it is important that you have a plan in place to ensure that you are properly prepared for the future. Below are a few things to consider now that you finally have the keys to your new home.

1. Update Your Address

Now that you are in your new home, it is very important that you update your address with the appropriate entities. Your local United States Postal Office has a form you can fill out. If you cannot make it into the post office, you can also update this information on their website. This will assist them in forwarding your mail to you. 

To ensure that you do not miss any important tax notices or refunds, you will also want to update your address information with the Internal Revenue Service using Form 8822, as well as with your local state tax agency.

2. Make Sure That Your House Title Coordinates with Your Estate Plan

While it is still fresh in your mind, take a look at your new deed to determine how your new home is titled. Ideally, you had a discussion with an estate planning professional prior to purchasing the new property to determine how you would like to own your new property, whether in your name individually, jointly with a spouse, or in the name of your trust. It is important to review your current estate plan after the purchase of the home to ensure that it aligns with your estate planning goals.

For example, if your plan had a specific instruction to give your prior property to someone, and the instruction references the address of your prior home, you will want to ensure that you update this provision once you no longer own the previous property to avoid confusion down the line. On the other hand, if this is your first home and your estate plan includes a trust to avoid probate, you will need to ensure that your home is titled in the name of the trust and not in your name individually. Alternatively, you could have a transfer-on-death (TOD) deed prepared to add the trust as a beneficiary to the home. Additionally, if you would ultimately like your property to be distributed to a specific individual or held in trust for the benefit of your loved ones (for example, your minor children), you will want to ensure that provisions are added to accomplish this.

3. Check Your Life Insurance Coverage and Beneficiary Designations

Unless you were fortunate enough to pay cash for your new home, chances are you now have a monthly mortgage expense. In order to protect your loved ones, it would be prudent to prepare for the possibility of dying before you pay off your mortgage. You may want to consider whether you have enough life insurance to pay off the balance of the mortgage. This is especially important if you have a surviving spouse or children who will likely continue to reside in the home to ensure that they have sufficient funds to alleviate one of the largest monthly expenses they will probably have. Life insurance can provide valuable funds during what is usually an emotionally—and sometimes financially—difficult time.

When you buy a new home, it is a great opportunity to double check your beneficiary designations. Life changes happen so quickly that sometimes updating beneficiary designations can be overlooked. If your designations do not align with the rest of your estate plan, you may end up inadvertently disinheriting a family member, having a large sum of money fall directly into the hands of an individual (for example, a young adult or minor child) without any guidelines, or having your hard-earned money and property go to someone you no longer want to benefit from your life insurance.

Lastly, now that you have a home and homeowner’s insurance, call your insurance agent to make sure that you are getting all of the discounts to which you are entitled. Many insurance companies will offer discounts when you bundle services. If you already have car insurance through a carrier and use the same company for your homeowner’s insurance, you may be entitled to a better rate than if you obtained the policies at separate carriers. In addition, homeowners often get discounts that renters do not.

4. File for the Homestead Exemption

As a new homeowner, one of the best ways to reduce your property taxes is to file for a homestead exemption in the county where your home is located. The homestead exemption offers a significant property tax break for homeowners who occupy their home as their primary residence. It’s a simple process that can save you money every year!

To file for the exemption, you’ll need to visit your county’s tax assessor’s office or tax commissioner’s office or apply online, depending on your county. Generally, you’ll need to provide proof of residency, such as your driver’s license and a copy of your deed. Most counties require that you file by April 1st of the year after you purchase your home, so don’t wait too long. Once granted, the exemption renews automatically as long as the property remains your primary residence.

This small step can make a big difference in your property tax bill—so make it a priority after settling into your new home!

We Are Here to Help

Buying a new home is a big step, and we are here to help you plan to protect both your loved ones and your new investment. Give us a call so we can help ensure that your new purchase and your estate plan are working together to accomplish your goals. Contact us today to schedule your in-person or virtual appointment.

by Barry

Georgia’s New Transfer on Death Deeds: A Simple Way to Protect Your Property

As of July 1, 2024, Georgia property owners have a new option for estate planning: the Transfer on Death (TOD) Deed. This legal tool allows you to name a beneficiary who will inherit your property automatically when you pass away, without the need for probate. It’s a straightforward and effective way to ensure that your property goes to the person you choose, and it offers some important benefits for property owners. In this blog post, we’ll explain what a TOD Deed is, how it works, and what you need to know if you’re considering one.

What Is a Transfer on Death Deed?

A Transfer on Death (TOD) Deed is a special type of deed that allows you to transfer ownership of your real estate to a beneficiary upon your death. Unlike a regular deed, which transfers ownership immediately, a TOD Deed only takes effect after you die. This means that during your lifetime, you remain the full owner of your property and can sell, mortgage, or change your mind about who will inherit it.

How Does a TOD Deed Work?

Setting up a TOD Deed in Georgia is a relatively simple process. Here’s how it works:

1. Creating the Deed: To set up a TOD Deed, you’ll need to prepare a deed that names your chosen beneficiary. This person is called the Grantee beneficiary. The deed must include a legal description of the property and be signed and recorded with the county clerk where the property is located.
2. Maintaining Control: One of the biggest advantages of a TOD Deed is that you keep full control of your property during your lifetime. You can sell it, take out a mortgage, or even revoke the TOD Deed if you change your mind. The Grantee beneficiary has no rights to the property until after your death.
3. Transfer of Ownership: When you pass away, the property automatically transfers to the Grantee beneficiary. To finalize the transfer, the beneficiary must record an affidavit with the county clerk within nine months of your death. This affidavit must confirm your death, state whether you were married to the Grantee beneficiary at the time of your death, and include a copy of your death certificate.
4. Avoiding Probate: One of the main benefits of a TOD Deed is that it allows your property to avoid probate. Probate is the court process that happens when someone dies, and it can be time-consuming and costly. By using a TOD Deed, your property passes directly to your chosen beneficiary without the need for probate.

Important Considerations

While TOD Deeds offer many benefits, there are some important things to consider:

1. Encumbrances on the Property: If you have any mortgages, liens, or other debts tied to your property, these remain in place even after the property is transferred to the Grantee beneficiary. The beneficiary will inherit the property along with any outstanding debts.
2. Spousal Rights: The rights of a Grantee beneficiary under a TOD Deed are superior to those of a spouse you marry after the deed is executed. This means that if you marry after recording a TOD Deed, your new spouse will not have a claim to the property unless you update or revoke the deed.
3. Revocability: One of the great features of a TOD Deed is that it can be revoked or changed at any time before your death. If your circumstances change, you can simply execute a new deed or revoke the existing one.
4. Grantee’s Responsibilities: It’s important for the Grantee beneficiary to understand that they must take action after your death to claim the property. If they don’t record the necessary affidavit within nine months, the property will revert back to your estate.

Is a TOD Deed Right for You?

A TOD Deed can be a valuable tool in your estate planning, especially if you want to ensure that your property passes directly to a specific person without the delays and costs of probate. However, it’s important to consider your overall estate plan and whether a TOD Deed fits your needs. For example, if you have multiple properties or complex family dynamics, you may need to explore additional or alternative estate planning strategies.

In short, Georgia’s new Transfer on Death Deed offers a simple and effective way to manage the transfer of your property after your death. By understanding how it works and the responsibilities involved, you can make informed decisions that help protect your assets and provide for your loved ones. If you’re interested in setting up a TOD Deed or have questions about how it fits into your estate plan, contact Edwards Law today to learn more about how we can assist you in securing your property’s future.

by Barry

Pet Trusts: Ensuring Lifetime Care for Your Beloved Pets

If you’re a pet owner, you’ve likely worried about what will happen to your furry, feathered, or scaly friends if something were to happen to you. Pet trusts are an excellent solution to ensure that your pets receive the care they need throughout their lives. This blog post will guide you through common issues and concerns about pet trusts, particularly focusing on choosing the right caretakers and sufficiently funding the trust to cover all necessary expenses.

What is a Pet Trust?

A pet trust is a legal arrangement that allows you to set aside funds to care for your pets if you become unable to do so. The trust provides instructions for how the money should be used and who should manage it. This ensures that your pets are well taken care of according to your wishes.

Choosing the Right Caretakers

One of the most critical decisions in setting up a pet trust is choosing the right caretaker. This person will be responsible for the day-to-day care of your pets. Here are some common concerns and recommendations:

Reliability and Commitment

• Problem: Will the caretaker be committed to caring for your pet for its entire lifetime?
• Solution: Choose someone who loves pets and has a stable living situation. It’s a good idea to have a conversation with them about their willingness and ability to take on this responsibility. It may also be wise to name an alternate caretaker in case the first choice is unable or unwilling to continue.

Knowledge and Experience

• Problem: Does the caretaker have the necessary knowledge and experience to care for your pet, especially if it has specific needs?
• Solution: Select someone familiar with your pet’s breed and any special care requirements. Provide detailed care instructions in the trust document to guide the caretaker.

Geographical Proximity

• Problem: Will the caretaker’s location be convenient for taking over pet care?
• Solution: Ideally, choose someone who lives nearby to minimize stress on your pet from relocation. If this isn’t possible, ensure that the caretaker is prepared for the potential challenges of moving your pet.

Funding the Pet Trust

Adequately funding the pet trust is essential to ensure your pet receives proper care. Here are some common concerns and recommendations:

Estimating Costs

• Problem: How much money should be set aside to cover your pet’s lifetime expenses?
• Solution: Calculate the annual cost of food, veterinary care, grooming, and other necessities. Consider the pet’s life expectancy and factor in potential increases in expenses over time. It’s better to overestimate than underestimate to ensure there are sufficient funds.

Trustee Management

• Problem: Who will manage the trust funds to ensure they are used appropriately?
• Solution: Appoint a trustworthy and financially responsible person as the trustee. This could be the same person as the caretaker or someone else. Provide clear instructions on how the funds should be managed and distributed. Regular oversight and accountability measures can help prevent misuse of the funds.

Legal and Administrative Costs

• Problem: Will the trust cover all associated legal and administrative costs?
• Solution: Include provisions in the trust for these expenses. Consult with an estate planning attorney to ensure all potential costs are accounted for in the trust document.

Recommendations for Setting Up a Pet Trust

Consult with an Attorney

• Work with an experienced estate planning attorney to draft a comprehensive pet trust document. They can help ensure all legal requirements are met and that the trust is enforceable.

Provide Detailed Instructions

• Include specific instructions about your pet’s care, including dietary needs, medical history, exercise routines, and any other important information. The more detailed you are, the better the caretaker can fulfill your wishes.

Review and Update Regularly

• Review the trust periodically and update it as necessary, especially if your pet’s needs change or if there are changes in your chosen caretakers’ circumstances.

Communicate with All Parties Involved

• Ensure that everyone named in the trust, including caretakers and trustees, are fully aware of their roles and responsibilities. Open communication helps prevent misunderstandings and ensures your pet’s needs will be met.

Setting up a pet trust is a thoughtful way to ensure your beloved pets are taken care of if you are no longer able to do so. By carefully selecting caretakers, adequately funding the trust, and providing detailed care instructions, you can have peace of mind knowing your pets will continue to receive the love and care they deserve.

Need help with your estate planning? Contact Edwards Law today to schedule a consultation and ensure your estate plan is comprehensive and effective.

by jenrchapman

Navigating Co-Fiduciaries in Estate Planning: Common Issues and Solutions

When setting up your estate plan, choosing the right individuals to serve as your fiduciaries is one of the most critical decisions you’ll make. Fiduciaries are responsible for carrying out your wishes, managing your assets, and ensuring your loved ones are cared for according to your instructions. These roles can include executors for a will, trustees for a trust, or agents under a power of attorney or healthcare directive. Sometimes, you might consider appointing two or more individuals to share these responsibilities. This can be a wise choice, but it also comes with its own set of challenges. Let’s explore the common issues raised by having co-fiduciaries and some recommendations on how to resolve them.

What Are Co-Fiduciaries?

Co-fiduciaries are two or more individuals appointed to serve in the same fiduciary role. For example:

• Co-Executors: Two or more people managing the execution of a will.
• Co-Trustees: Multiple individuals overseeing a trust.
• Co-Agents: More than one person handling power of attorney duties or healthcare decisions.

Having co-fiduciaries can provide checks and balances, distribute the workload, and combine different skill sets. However, it can also lead to conflicts and complications.

Common Issues with Co-Fiduciaries

Decision-Making Conflicts

• Problem: Co-fiduciaries may disagree on decisions regarding asset management, healthcare choices, or distribution of assets.
• Solution: Clearly define how decisions should be made. This can be done by specifying in your documents whether decisions need to be unanimous or if they can be made by majority vote.

Geographical Challenges

• Problem: If co-fiduciaries live in different locations, coordinating meetings and decisions can be difficult.
• Solution: Use technology such as video conferencing, and ensure all parties have access to the same documents and information. Specify in your estate plan how to handle logistical challenges.

Unequal Participation

• Problem: One fiduciary may take on more responsibility than the other(s), leading to resentment or burnout.
• Solution: Clearly outline each fiduciary’s duties and encourage regular communication. Consider appointing a primary fiduciary who has the final say, with the co-fiduciary(s) acting as backups or advisors.

Potential for Conflicts of Interest

• Problem: Co-fiduciaries might have personal interests that conflict with their duties.
• Solution: Choose individuals who are impartial and trustworthy. Include conflict-of-interest clauses in your documents to guide fiduciaries on how to handle potential issues.

Increased Complexity and Costs

• Problem: Managing multiple fiduciaries can complicate the administration process and increase legal costs.
• Solution: Weigh the benefits against the potential costs and complexity. Simplify the process where possible by limiting the number of fiduciaries.

Recommendations for Appointing Co-Fiduciaries

Assess Compatibility

• Choose individuals who have a good working relationship and complementary skills. Consider their ability to communicate and collaborate effectively.

Clearly Define Roles

• Specify the responsibilities of each fiduciary in your estate planning documents. This helps prevent misunderstandings and ensures that all duties are covered.

Provide Clear Instructions

• Leave detailed instructions on how you want your affairs managed. This can include guidelines on how decisions should be made, how disputes should be resolved, and what steps to take in various scenarios.

Consider an Odd Number of Fiduciaries

• If possible, appoint an odd number of fiduciaries to avoid tie votes. This can be particularly useful for decision-making purposes.

Regular Reviews

• Regularly review your estate plan and update it as needed. Changes in relationships, health, or other circumstances can impact your choice of fiduciaries.

Professional Assistance

• Consider appointing a professional fiduciary, such as a trust company or an attorney, to serve alongside or instead of family members. Professionals bring expertise and impartiality to the role.

Choosing the right fiduciaries is crucial to ensuring your estate plan is executed smoothly and according to your wishes. While co-fiduciaries can provide valuable support and oversight, they also bring potential challenges that need careful consideration. By understanding these common issues and following the recommended solutions, you can make informed decisions that will benefit you and your loved ones.

Need help with your estate planning? Contact Edwards Law today to schedule a consultation and ensure your estate plan is comprehensive and effective.