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HAVE YOU PLANNED YOUR ESTATE?

Some people incorrectly think estate planning is only for the rich. In reality, anyone who owns any type of asset – a home, car, bank account, investments, business interests, retirement plan, collectibles, or personal belongings – needs an estate plan. An estate plan allows you to direct how and to whom your property will be distributed as well as who will be in charge of an assets after death. If you do not plan your estate, the government will. Estate planning is an ongoing process and should be reviewed every three to five years or earlier in the event of a significant life event. A good estate plan should include at least three basic documents: Last Will and Testament, General Durable Power of Attorney and Health Care Directive.

First, everyone needs a Will to direct who will receive what assets after the time of death. If an individual dies “intestate” or without a Will, the individual’s assets will be distributed among beneficiaries as directed by with state law. A Will reduces the time and money necessary to probate an estate. In Georgia, if all heirs consent, a properly drafted Will can be probated “instantly.” Probate instanter allows the distribution of assets without the expense of posting a fiduciary bond or the delay of filing inventory and returns with the Court. Under a Will, one can name an Executor to manage and settle the estate. Without a Will, a court appointed administrator serves and makes such decisions. A Will can also provide protections for family members with special needs or financial circumstances. Only under a Will can parents designate a guardian of minor children. Finally, a properly drafted Will can help reduce estate taxes, where applicable. Remember, no Will is final until death and may be revoked or revised as circumstances change.

The second document, a General Durable Power of Attorney, can be as important as a Will. This document names an individual to act as agent in legal, financial and business affairs in the event of physical or mental disability or incapacity. Without a valid power of attorney, even a spouse does not have the authority to act in such matters. In Georgia, a “springing power of attorney” becomes effective only upon the occurrence of such an event.

The third document is a Health Care Directive pursuant to which an individual can delegate the power to make medical and health care decisions, if personally unable to do so. These decisions range from admittance to a health care facility to withholding of life sustaining or death delaying treatments.

The main thing to remember is that each person and each family is unique. Each individual should plan his or her estate to accommodate his or her personal needs and desires. An estate plan should consider individual assets, relationships and circumstances. Failure to address these issues in an estate plan almost assures conflict down the road. Dealing with reality now can help avoid disaster in the future. An estate plan, even designed by a highly experienced estate planning attorney, is not a guarantee or a “cure all”; however, a personal and carefully drafted plan can save time, money, conflict and heart ache in the future.