What is Estate Planning?

Estate Planning involves both the management and distribution of your assets during lifetime and at death.

What is a Foundational Estate Plan?

There are two main vehicles that are used when implementing a Foundational Estate Plan:

  1. Last Will and Testament

  2. Revocable Living Trust

What is a Last Will and Testament

A Last Will and Testament is a public document which contains instructions on how to distribute your assets to beneficiaries through the probate process.

What is a Revocable Living Trust?

A revocable living trust is a legal document which is created to own the trustmaker’s, or grantor’s, assets.  The assets are managed by a trustee (which is generally the trustmaker, during his lifetime) for a beneficiary or beneficiaries. 

What are the benefits of implementing a Revocable Living Trust?

There are many advantages to a RLT plan, as opposed to a Will based plan.  Some are set forth below:

  1. Probate Avoidance- If the trustmaker places all his assets in his RLT (known as “funding”) and owns nothing in his name, then at death, he will avoid probate. While probate in Georgia is “simple”, it is still time consuming, expensive, and leads to court oversight.  Probate in Georgia is like minor surgery, it is no big deal…until it happens to you!

  2. Incapacity Planning- Assets owned by a RLT can be managed by the trustmaker as trustee. Upon incapacity of the trustmaker, the RLT will name a successor trustee, or “Incapacity Trustee” who will take over and manage the trust assets for the benefit of the trustmaker-beneficiary.

  3. Estate Tax Planning- With a property drafted RLT plan, a trustmaker can take advantage of Estate tax or “Death” tax exemptions; thus, potentially saving his Estate a substantial amount of money in tax. More money left in your Trust/Estate means more money to pass down to your beneficiaries.

  4. Asset Protection after death- Through a RLT plan, (also with a Will) a trustmaker may build in sub-trusts to pass his assets on to his beneficiaries. With certain restrictions, beneficiaries can be named as trustees of their own trust, which gives them the use and limited control of the assets, without exposing the assets to liability from creditors and divorce.  This is because the beneficiaries do not “own” the assets personally, therefore the assets cannot be attached by creditors.

  5. Privacy- A Last Will and Testament is made public through the probate process; this means that anyone that chooses to may go to the courthouse and potentially find out what you owned and who is receiving it. A RLT is not filed anywhere and does not becomes public record, thereby maintaining your privacy from creditors and predators.

What other documents make up my Foundational Estate Plan?

Other documents that should be implemented in a complete foundational estate plan include: a Pour-Over Will (if you choose to use an RLT), Durable Power of Attorney, HIPAA Authorization, and the Georgia Advance Directive for Healthcare.

What is a Pour-Over Will?

A Pour-Over Will is a type of Will that directs your executor to transfer assets in your name at death to your RLT.  It directs your assets to be “poured-over” into your RLT to be distributed in accordance with its terms.

My trustee manages my trust. Why do I need to name a Durable Power of Attorney? 

A trustee only has the power to manage assets that are owned by your trust.  A trustee has no power over any assets that are not in your trust; therefore, an Agent should be named to manage assets that have not been put into your trust. 

*Also, in the Durable Power of Attorney, your Agent should be given the authority to “fund” your RLT.

What is a HIPPA Authorization?

A HIPAA Authorization is a document in which you name those persons who, under the federal HIPAA law which, among other things, may cause a medical provider to restrict access to your medical information.  You want to be sure to name people who can access your medical records on your behalf. Typically, the individuals will be the same as those you name as your agents for healthcare pursuant to the Advance Directive for Healthcare.

What is an Advance Directive?

The Georgia Advance Directive for Healthcare is a document through which you can name a healthcare agent to make healthcare decisions on your behalf if you are unable to make them.  Through the Georgia Advance Directive, you can choose how you want to be treated regarding end-of-life treatment preferences, if you are unable to make those decisions.