One of the first things to note is that every estate plan or financial situation differs and must be tailored to your specific wishes and needs. Small estates may seem more straightforward, but other matters not about money often come into question. Things that matter include who cares for your minor children, business interests and holdings, real estate holdings, and much more.
You must note that Georgia is one of 38 states with no estate tax. However, if you’re formulating an estate plan, there remain many other factors to consider, like the possibility of having to pay the federal estate tax.
The estate tax is levied by the federal government (and some local governments) on your estate if you are a recently deceased person. It is commonly called the “death tax.” The estate tax is applied before the people inheriting the money receive it.
The estate tax is different from the inheritance tax. Inheritance taxes are applied to a person’s heirs after they have already received money from someone who recently died.
However, an estate plan is not always just drafted to plan the distribution of your assets after your death. You can also arrange for retirement, what may occur if incapacitated, and more.
It may seem that the more extensive your financial holdings, the more difficult this planning may be, but that may not be the case. A myriad of subjects, including finances, can be discussed and an estate plan drafted to ensure your future wishes are followed. So, even if your finances are small, many other matters may have to be discussed, so your exact wishes are carried out at your retirement or death.
Suppose you’re dealing with a large or small estate or any other financial planning situation. In that case, the wise path is to find a professional and experienced estate planning law team to help you navigate a laborious and complex legal process. You can ensure that your finances, loved ones, and future are secure.
Do I Need a Certain “Net Worth” to Require an Estate Plan or Trust?
A standard benchmark is: If you have a net worth of approximately $100,000 or more, which may include a substantial amount of your real estate assets, you should consider an estate plan or a trust. Many people confuse an estate plan with a will or trust. Your retirement estate plan, simply, may include a will or require trust, but they are altogether different legal entities. Your knowledgeable estate planning lawyer will thoroughly explain what your specific situation calls for and will be invaluable in doing so with only your wishes in mind.
One hundred thousand dollars may not seem like a significant “net worth” today and will include most families’ homes which put them into this category. However, allowing your estate to go through probate at your death is always a tricky situation. If your final wishes are important to you, then a properly drafted estate plan will allow you to make your directives clear.
Your estate planning will look at your entire estate and always attempt to simplify it as much as possible but still carry out your plans. In a smaller estate, things such as a “small estate affidavit” may be used if you and your lawyer feel it’s applicable and your state permits it.
I Don’t Have a Large Financial “Estate,” Should I Still Consider an Estate Plan?
The simple answer is yes, you should. At its most fundamental level, estate planning is about controlling the uncontrollable. Death, of course, is inevitable; however, disability is increasingly probable as we age. When death or incapacity occurs, what happens to us, our property, assets, and loved ones?
Planning and taking advantage of our many applicable federal and state laws allow us to control what happens and name exactly who will effectively “take our place,” and ensure that our wishes are carried out as intended.
You may believe that you need a will, but estate planning is only for those folks with more money than me. However, this is not the case, and estate planning does not involve simply getting a will, a trust, or a power of attorney. You also don’t have to have vast wealth for estate planning to be significantly beneficial and critical to your situation.
The essence of estate planning is figuring out what you want to see happen in the event of your death or incapacity and then forming a legal plan that follows the steps to ensure that your desired wishes occur. The steps involved in an estate plan usually include drafting and signing various legal documents; however, these documents are simply tools used to carry out your singular plan. So, the entire plan itself should focus on you, your family, your loved ones, and the professional help of your estate planning law team.
What Some of the “Must Have” Documents In My Estate Plan?
Having an estate plan is the right and legal way of making provisions for your friends and loved ones and yourself, should you become disabled or die.
Three legal documents will ensure this process is as smooth and stress-free for you and your family as possible.
These are:
- Last will and testament – Your will is a legal document in which you provide instructions for distributing your assets upon death. This can be used for many things, such as designating a guardian for any minor children. Your executor will help to ensure that all your final wishes are put in place.
- A durable power of attorney – This document enables someone you elect to act on your behalf in the event of your disability. This person can manage your affairs, including financial matters, real estate transactions, and legal decisions.
- An advance directive for health care – This is a directive in which you list your personal health care preferences in detail (treatment, medical testing, and care options). It puts family members, doctors, and hospitals on notice of your wishes and is only used if you cannot communicate your wishes.
These three documents (and many more) provide the foundation for an estate plan and help you remain in control of your financial, legal, and health decisions, no matter the overall value of your estate.
I Know I Need an Estate Plan; How Should I Proceed
So, although there may be other ways that the size of your estate may vary your estate plan, you begin to see that even the most “modest” of estates should have one. Finances are only one of the many demanding and highly personal decisions you will address. The best path to follow is to consult with an experienced, empathetic, and thorough estate planning law firm and get the best possible advice for your specific situation and needs. Consult with your lawyer today, and make sure your plans for tomorrow are implemented per your wishes.
