Below are links to articles containing useful information about estate planning and other legal tips:

• Estate Planning: It’s Essential, It’s Elemental, It’s Easy!
• Do Your Family a Favor: Get Organized
• When to Update Your Estate Plan
• Surprising Statistics
• Choice of Entity - Why You Need to Make it Your Business (Reasons to Incorporate)
• The Limited Liability Company ("LLC")
• The Corporation ("Inc.")
• Scenarios to Avoid: A Practical Example
• The Blended Family
• The Truth About Internet Wills
• Power of Attorney for Care of a Minor Child
• What a will WILL do (and what it won't!)
• What is a Trust? Do I Need One?
• How to Protect Yourself in Uncertain Economic Times
• Click here to download our Memorandum to My Family FREE

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Estate Planning: It’s Essential, It’s Elemental, It’s Easy!

Better make out your Will: the words conjure up the melodramatic deathbed scene of an action hero, perhaps accompanied by the scheming plot of the greedy relative. In real life, though, creating an estate plan should be the cornerstone of every family’s foundation. And yet, it’s a responsibility that is too easy to put off. 

Most people do not realize how very basic and important it is to have a documented estate plan.  Not only will it ensure that your wishes are carried out, it will greatly reduce the strain on your loved ones if you die or are incapacitated, and will reduce the likelihood of disagreements or misunderstandings. 

As wives, mothers, and lawyers, it is our mission to spread the word about the importance of estate planning (Wills and Trusts), and tell you why everyone needs one. This article will bust some of the more common myths and, we hope, remove some obstacles for you.

Myth #1: My spouse gets everything automatically.

This is not always correct, especially if you have children.  Although you may have a joint bank account, any assets titled in only one spouse’s name will be subject to the laws that govern how estates are handled when there is no will; and those typically go equally to the spouse and children. If you die “intestate,” or without a will, there’s no flexibility and no room to say what you might have really wanted.

Myth #2: I don’t have enough assets to need an estate plan.

Most people don’t think of themselves as wealthy. But the chances are, when you tally up every last thing that qualifies as an “asset,” you probably have more than you think. Even if you really do have just a few assets, your estate plan can control exactly what happens to them.  You can specify that certain items go to certain people, for example, even if those people would not ordinarily inherit.

Myth #3: I see those free Internet Wills all the time. I’m sure I can download one of those and have it notarized somewhere. Or I can just buy some software, answer a few questions, and voilà!

Let’s draw the analogy this way: if you have a sore throat, you might consult an online medical site, but if it persists, you would certainly see a doctor. You wouldn’t expect an Internet site to be able to tailor a treatment plan just for you.

Georgia, like most states, has very specific laws regarding the construction of Wills and especially their execution.  Material from the Internet, especially the free stuff, can be generic or downright wrong and, therefore, invalid in Georgia. 

Store-bought software cannot tailor an estate plan to the many aspects that are unique to your situation.  Only a licensed attorney experienced in estate planning can put together a comprehensive plan that is legal, binding, effective, and respects your wishes.

Taking a gamble with do-it-yourself tools, especially when minor children are involved, just isn’t worth the risk.

Myth #4: Having an attorney draft my estate plan will be way out of my budget.

Estate planning is probably more affordable than you think and it is certainly money well spent.  An estate plan will protect your family, preserve your wealth, and allow you to be sure that your wishes are carried out in case of incapacity or death.  Many clients report that the peace of mind they derived from completing their estate plan far exceeded the attorney’s fee.

Myth #5: I have heard that “probate” is a bad thing and will cause headaches for my surviving family.  I don’t want to do that to them.

The probate process in Georgia is neither costly, lengthy nor arduous compared with other states.  Therefore, it is not something that necessarily needs to be avoided.  Again, with help from a good attorney and with a valid Will, the probate process can be relatively simple and straightforward.  Without a Will, things can get much more complicated and Court involvement can increase. That’s certainly something most people want to avoid.

Myth #6: My family gets along well and they know what I want.  If I became incapacitated, my family would know when I’d want them to stop medical intervention. And if I died without a Will, it wouldn’t be that bad. They’d work it out.

Sobering examples abound of people who thought their wishes were known—such as Terri Schiavo—or people who did not update their Wills in response to a family change—like Anna Nicole Smith.  Ineffective or nonexistent estate planning can cause enormous headaches for the heirs and can take years to sort out. 

Perhaps your family members get along and you just can’t imagine them squabbling. And perhaps yours is that rare family that can make it through a devastating loss, compounded by the lack of planning on the part of the deceased, with harmony.

What we see in real life, however, is that death, grief and loss can have an incredible impact on a person and can cause unpredictable behavior.  Making your wishes known explicitly can help ensure family harmony into the future.

Myth #7. I’m healthy. I’ll do this later.

The best time to make these decisions is when you are in good health. Many religious people believe in life after death. And in legal terms, it is exceedingly important to plan for life (of your loved ones) after death (yours). It’s one of the greatest gifts you can give your family.


Protect your family.

Preserve your wealth.

Prevent uncertainty.

Call Wasdin & Oki Law today.
(770) 232-7767
(404) 642-2827
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Surprising Statistics

Did you know....

• 66% of Americans do not have a will.
• The number one reason given for not having a will is: "I plan to, I just haven't gotten around to it yet."
• The number two reason given for not having a will is the mistaken belief that: "My estate is too small."
• 62% of Americans do not have a living will (spelling out whether they want life-sustaining medical care in case they are terminally ill or incapacitated).
• 80% of inheritances are spent within 18 months of receipt.
• 40% of individuals who received an inheritance of $50,000 or more spent less than a week deciding what to do with it.

• Among the notables who died without either a valid will or no will at all are: Abraham Lincoln, Andrew Johnson, Ulysses S. Grant, Howard Hughes, Martin Luther King, Jr., Tupac Shakur, Kurt Cobain, Buddy Holly, Lenny Bruce, Billie Holiday, Marvin Gaye, Sam Cooke, Cass Elliot, Sonny Bono, Tiny Tim, Karl Marx and Pablo Picasso.

Don't be a statistic!  Don't let state law decide who inherits from you.  Create a plan today with Wasdin & Oki Law.

Call today:
(770) 232-7767 Nancy
(404) 642-2827 Andrea
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Choice of Entity – Why You Need To Make It Your Business

Starting a small business is realizing a dream.  Without designating a legal entity for your business, that dream can turn into a nightmare that could easily cost you your worldly possessions. By creating a legal entity (e.g. LLC, C Corp or S-Corp) for your business, you avoid sole proprietorship and, though there is a fee for the designation, the expense could easily save you from tremendous expense and anguish in the future.  Choosing to create a corporate entity has many advantages for both the short and long term, including:

• ease of selling the business
• tax advantages
• limiting personal liability
• business identity
• separation of the business from your personal estate

Tax Aspects

The tax code treats the sole proprietorship and the owner as one and the same: income earned by the business is seen as income of the owner and must be reported on the owner's return; likewise with expenses.  Therefore, sole proprietorships are taxed on all net income, and potential tax benefits of legal entities are unavailable.

Liability

As a sole proprietor, there is no corporate entity or other legal device to hold the business assets or ameliorate the liability of the owner for debts or obligations of the business.  The sole proprietor has unlimited personal liability for the obligations of the business. If the assets of the business are insufficient to satisfy the claims of its creditors, the creditors can collect against the owner's other non-business assets.

Selling the Business

Selling a sole proprietorship is more difficult than selling a legal entity (e.g. LLC, S-Corp). The sale of the business will be treated as a sale of each of the individual assets of the proprietorship instead of as a whole, separate entity.  Further, the organizational documents and/or statutory rules associated with the legal entity govern how a sale is conducted.

Continued Existence

 Without incorporating, the business and you are one.  If you retire, the business assets are treated as your personal assets, creating many issues if you wish to pass the business to someone else.  If you die, the business assets are treated as part of your estate.  The existence of the sole proprietorship ends upon the death of the owner and the property of the business will be disposed of according to the terms of the owner's will (or worse, according to the laws of intestacy if there is no will).  This leaves no room for passing the business to a family member, employee or making any other arrangements you might desire.

Call Wasdin & Oki Law today to discuss incorporating your business.
(770) 232-7767 Nancy
(404) 642-2827 Andrea
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The Limited Liability Company (“LLC”)

The LLC is a relatively new business entity that, in recent years, has become the most popular entity choice for small business owners.  It has some of the most favorable aspects of a corporation while keeping the benefits of a partnership.

The LLC itself is considered separate from its owners (usually referred to as members). LLCs are popular because, similar to a corporations, owners have limited personal liability for the debts and actions of the LLC, while at the same time providing management flexibility and the benefit of pass-through taxation, like a partnership. Members may be individuals, corporations, other LLCs, and/or foreign entities.  There is also no maximum or minimum number of members, allowing for growth or keeping things small.

Advantages of Limited Liability Company

• Limited Liability: Owners of a LLC have the liability protection of a corporation.  An LLC exists as a separate entity, much like a corporation. Members cannot be held personally liable for debts unless they have signed a personal guarantee.
• Flexible Profit Distribution: Limited liability companies can select varying forms of distribution of profits. Unlike a common partnership, where the split is 50-50, LLCs have much more flexibility.
• Less Upkeep: Corporations are required to keep formal minutes, have meetings, and record resolutions. The LLC business structure requires no corporate minutes or resolutions and is easier to operate.
• Flexible Tax Treatment: All losses, profits, and expenses flow through the company to the individual members, avoiding the double taxation of paying corporate tax and individual tax. Generally, this will be a tax advantage, but circumstances can favor a corporate tax structure.  Further, an LLC can elect different tax treatment (e.g. as a sole proprietorship, partnership, or S-Corporation) depending on the circumstance; this is a great benefit.
• Estate Planning:  Interest in LLC may be transferred to family members using IRS approved discounts in valuation.  This allows greater interest to be transferred at no additional tax cost.
• Privacy: Identities of the owners of an LLC can be kept completely private.  The LLC need only register a mailing address and registered agent with the Secretary of State.  The LLC is governed either by Georgia law (“default” statutes) or by its own Operating Agreement.  This document can be created and kept confidential by the owners.

Disadvantages of Limited Liability Company

• Limited Life: an LLC is dissolved when a member dies or undergoes bankruptcy, unless otherwise specified in the Operating Agreement.  
• Going Public: Business owners with plans to take their company public, or issuing employee shares in the future, are best served by choosing a corporate business structure as LLCs cannot “go public.”  An LLC can, however, be “stepped up” to a corporation with relative ease.
• More Paperwork: It is strongly recommended that any LLC have its own Operating Agreement, and therefore extra paperwork might be required when compared to a sole-proprietorship or partnership. 
• Lack of Legal Precedent: LLCs have only been recently recognized in Georgia so there is little legal precedent to help owners predict how legal disputes may affect their business.  
• Possible Additional Expenses: There are filing fees at the outset and annual fees to operate in Georgia. 

For more information on setting up LLCs, corporations, partnerships or any other small business legal matter please contact Wasdin & Oki Law.

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Scenarios to Avoid: A Practical Example

You could plan this way…

Bob and Sue have 2 kids: Angie is 12 and Alex is 9.  Through his job at a big corporation, Bob enjoys a 401k and life insurance policy.  When he was hired, shortly after Angie’s birth, Bob named Sue as his primary beneficiary and Angie as the secondary for both benefits. He’d meant to update those elections ever since Alex was born. 

Sue works part time at the local veterinary clinic, a job she’s had since before she and Bob married. Through that, she has a small life insurance policy, with her mother named as beneficiary. She’s practically forgotten about it.

Bob and Sue owe about $150K on their house, which is currently valued at $450K.  Sue has some jewelry from her grandmother that her mother gave her; jewelry that Sue’s sister wanted because it is worth about $10K.  Bob has his father’s war medals, and a substantial coin collection from his own military days, with a combined value of $20K.

Bob and Sue know that they should set up an estate plan, and they have been meaning to do it since Angie was born, but they haven’t gotten around to it. They have no wills.

..and if the unthinkable happens

Tragedy strikes and Bob and Sue are both killed in an auto accident. 
 

…then what? 
 

Unsure of what Bob and Sue’s wishes were regarding their children and their estate, grieving survivors begin an all-out search for a will. They look in all the files, safes, safety deposit boxes and other places in their home it could possibly be kept. Only after exhausting the search—and themselves—and remaining unsure about whether a will exists or not, the family moves forward.

State law says that Bob and Sue’s “probate estate,” which includes the house, the jewelry, the medals and the coin collection, must be divided between their children.  Immediately, with those assets alone, a 12-year-old and a 9-year-old inherit $165K between the two of them.

Their probate estate, however, does not include the couple’s life insurance policies or Bob’s 401k.  These get directly distributed to the named beneficiaries. Bob’s benefits go directly and solely to Angie. Sue’s benefit goes to her mother.

The survivors must hire an attorney to go to Probate Court and have an Administrator appointed, which is typically a family member.  The Court will appoint a guardian for the children’s inheritance, and the Administrator of the estate will not be able to do anything with the property without that person’s say-so (there will be two of them: one for each child).

Lengthy and costly issues ensue, including:

• Selling the house
• Setting up accounts for the children to hold the money they have directly inherited
• Dealing with Sue’s sister who contests the estate in an attempt to claim the grandmother’s jewelry
• Trying to avoid gift tax against Angie while trying to give some of her inheritance to Alex for a college fund
• Dealing with emotional, squabbling family members over custody of Angie and Alex
• Paying court costs and attorney’s fees to handle it all. 

Or you could plan this way…

Steve and Mary are in a parallel financial situation to Bob and Sue.  It’s Mary who has the corporate job, and Steve is a teacher at the local school.  Their children, Carol and Chris, are also 12 and 9.

Steve and Mary, however, took the time to set up an estate plan with a qualified attorney.  They set up wills with testamentary trust provisions for their children.  Their attorney advised them of the difference between probate and non-probate assets, so they updated the beneficiaries on their 401k plans and life insurance policies so their will provisions control those funds.  They also designate an executor (with successors, or “back-ups”), a trustee (again, with back-ups), and a guardian for their minor children.  They set up the trust to pay for college for Carol and Chris, and whatever is left will be paid to them in increments until they are 35.

After they sign their wills, Steve and Mary discuss them with their family members.  They give a copy to their named executor, trustee and guardian, and they tell their family where the original wills are.

…and if the unthinkable happens  
 

Tragedy strikes Steve and Mary, and they are killed in a fire.

…then a plan like this emerges. 
 

Their survivors quickly locate the wills and, with an attorney’s help, probate them.  When Mary’s disgruntled sister tries to contest the will–she wants their mother’s china–her claim is quickly dismissed.  The wills created by Steve and Mary are clear, valid and properly executed, and thus almost impossible to challenge.  Some costs are incurred: small court fees and some attorney’s fees, but the probate is short and handled quickly.  There are no questions about where Carol and Chris will go, who is in charge of the assets, and how things will be handled.

Protect your family, preserve your wealth, prevent uncertainty.
Create a plan with Wasdin & Oki Law today.
(770) 232-7767 Nancy
(404) 642-2827 Andrea
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Estate Planning Scenarios to Avoid: The Blended Family

Julie and Dave are happily married.  Julie has two children from a previous marriage, Andy and Kyle, who are 5 and 8.  She and Dave have one child together, Jenna, who is 1.  They own a home together, and have two cars.  Julie’s car is still jointly owned with her ex-husband; she has forgotten about that.  Dave works full time and Julie is an at-home Mom.  Dave has a life insurance policy and 401k through his job.  Julie has insurance through Dave’s job, and she has another policy that she purchased when Andy was born.  Julie and Dave download Wills from the Internet, and each is the other’s primary beneficiary.

Tragedy strikes and Julie suffers an aneurysm.  She is left in a coma, and doctors tell Dave that her chances of recovery are very slim.

Dave and Julie had discussed their feelings about life support a few years ago when the Terry Schiavo case was in the news.  Julie told Dave that she did not want to be kept alive on machines; that if it was her time to go that he should let her.

Ed, Julie’s ex-husband and Andy and Kyle’s father, does not remember it that way.  He too discussed life support with Julie, and he recalls her saying that she would want to be kept alive as long as possible; she would not want to give up on life for the sake of the children.

At the hospital, the families converge.  Dave is there with Jenna, Ed is there with Andy and Kyle, and Julie’s parents and sister have arrived, as well.  A heated debate erupts among the family members, who are grief-stricken and do not want to lose their loved one.  Dave and Julie’s sister want to consider stopping the life support machines, while Ed and Julie’s parents vehemently disagree.  Both retain attorneys and begin paying fees as they explore their legal options.

Sadly, Julie dies from complications of the aneurysm.

Dave probates Julie’s Will without much difficulty, as he is listed as primary executor and beneficiary.  But Dave’s say is limited by “loose ends” that never got tied up. For example, the car that Julie and Ed co-owned now legally belongs to Ed.  And that old life insurance policy of Julie’s—the one that still lists Ed as the primary beneficiary—is paid to Ed. Dave has no legal claim on it whatsoever.

Meanwhile, Dave is entitled to all of Julie’s property, including her father’s gun collection and her grandfather’s watch.  Julie had wanted those items to go to Andy and Kyle when they are older.

Dave wraps up Julie’s estate.  Andy and Kyle go to live with Ed, and though he is not required to, Ed allows Dave to spend time with them on the occasional weekend.  Dave is a single parent to Jenna, and has to rearrange his work schedule and hire a nanny.

Years pass, and Dave eventually remarries.  He updates his Will, leaving everything to his new wife.  When Dave dies, all the money left from Julie’s estate, along with her father’s gun collection and her grandfather’s watch go to Dave’s new wife.

Contrast with Chris and Judy.

Chris and Judy are recently married.  Chris has one child, Todd, from a previous marriage, and Chris and Judy have a child together, Allison.  Before they marry, Chris and Judy consult an attorney and execute a prenuptial agreement.  In it, they agree not to claim any inheritance received by the other.

Further, after their marriage, they consult a qualified attorney and set up a complete estate plan, including Wills, and powers of attorney for healthcare and finances.  Having had good advice, they review and amend the beneficiaries of their various bank and investment accounts, as well as the titles to their vehicles and real property.  Realizing that Chris could unintentionally disinherit Todd if he leaves everything to Judy, he sets up specific gifts in his Will (including his mother’s wedding ring and his father’s money clip), as well as a separate life insurance policy to pay out for Todd’s benefit.  He also leaves a portion of his overall estate in trust for Todd.  Judy also leaves a portion of her estate to be held in trust for Allison.

Sadly, Judy’s grandmother dies.  Judy receives $25,000, her grandmother’s silver flatware, china and crystal.  She wants these items to go to Allison.  Per the prenup, Chris has no claim to these items, and, with her attorney’s help, Judy is able to easily execute a Codicil to her Will adding these items as a specific gift to Allison.  Further, she invests the money in a 529 plan for Allison’s benefit.

Tragedy strikes and Chris suffers a heart attack, and slips into a coma.  Like Julie, the family converges on the hospital.  Chris’ parents and brother arrive to be with Judy and the children.  Chris, however, has a healthcare power of attorney with living will provisions included which addresses his desires in the event of his incapacity.  While the family is shocked and devastated, there is great relief that Chris has documented his wishes.

Chris dies from complications of his heart attack.  Judy is able to probate the Will rather quickly and the provisions fall into place.  A trust fund is set up for Todd, while Judy receives the bulk of the estate for her own support both in paying the medical bills and in finding additional childcare and income supplement.  Chris’ mother’s wedding ring and his father’s money clip are held in trust for Todd until he is older, and there is no question that they belong to him.

Years pass and Judy remarries.  She updates her Will again and leaves the bulk of her estate to her new husband.  This has no consequence to Todd, however, because his trust has been funded with the life insurance proceeds and portion of Chris’ original estate.

Protect your family, preserve your wealth, prevent uncertainty.
Create a plan with Wasdin & Oki Law today.
(770) 232-7767 Nancy
(404) 642-2827 Andrea

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Corporation: Could this be your business?

•     Pro: Limited Liability

•     Pro: Well known entity type
•     Pro: Continuity of existence

•     Pro: Ease of adding investors and selling interest

•     Con: More paper work to set up

•     Con: Double Taxation (not pass through)  

•     Con: Many Regulations to do business

Characteristics of a Corporation 

A corporation is an autonomous legal entity, existing apart from its shareholders, officers and directors, so it can stand alone, and is completely separate from its creators. Corporations usually possess most of the economic powers that any person would: they can own property, sue in court, sell or transfer property, etc. For a startup, the most important characteristics of a corporation are the continuity of existence, lack of pass-through tax treatment, limited liability for investors, and the ease of adding investors and selling interests.

Well known entity type

Corporations have been around a long time and the courts have had many opportunities to hear many cases. Therefore, the laws are well established with lots of legal precedence.

Continuity of Existence

Corporations have a kind of legal immortality. With proper care and maintenance, the Corporation should exist for as long as the shareholders desire, the shareholders (owner) can change as well as the officers and directors but the corporation can continue on. Deaths and transfers of interests in the corporation have no impact, and unless the state law has put a limitation on the existence of a corporation it can continue indefinitely, as it does in Georgia.

The shareholders can dissolve a corporation by a vote, and legal proceedings can also end a corporation's existence. Often, one of these two methods will be employed by shareholders when the corporation's outlook is bleak. Judicial dissolution is the commonly used method when shareholders cannot agree.

Limited Liability

Unlike partnerships and sole proprietorships, corporate shareholders are not liable for any of the corporation's debts. This means that what you pay for the stock or what you pay to incorporate is the total sum that you are risking, and nothing more. This is true regardless of how much a shareholder participates in management. A shareholder who owns 100% of a business and makes every decision cannot be held liable for the debts of the corporation, unless of course he runs afoul of a certain area of law known as ``piercing the corporate veil". Also, the corporation will be liable for the acts of its employees and agents who commit tortuous (?) acts, but the owner will not.  Therefore shareholders will not lose personal assets (such as your house or life savings) for an act of an employee.  Only the corporation’s assets would be at risk. Limited liability will not protect you against lawsuits alleging fraudulent or criminal actions by you in the course of corporate business.   The corporation allows the owners/shareholder to have greater control over the financial risk and benefits taken by the entity.

Ease of Adding Investors and Selling an Interest

To add new investors or sell an interest, the transacting parties simply exchange shares. Absent of a shareholders' agreement to the contrary, there is no requirement that the other shareholders agree to the transfer, and there is no way that the other shareholders can withhold any of the benefits of stock ownership from the new shareholders. The new shareholders step into the place of the old ones without any diminution of rights or interest. In a small business, this kind of transferability is not a good thing for the other, non-selling shareholders, after all, who wants strangers coming into the business through a stock sale? That is why a shareholders' agreement restricting such actions is commonly signed among the shareholders.

Formation and Maintenance

Corporations require a greater investment than most other business entities, except for perhaps a partnership or a limited liability company. In addition to the state filing fees, there is the initial organizational documents, where the shareholders, if there are more than one, agree about things like the number of directors, corporate officers, voting arrangements, sale of shares, etc. Note that attorney's fees to craft these agreements should be smaller than those charged for a partnership agreement due to the greater standardization of the corporation. This rule of thumb changes, however, if there are securities issues or complicated capital arrangements.

Maintenance of a corporation, on the other hand, is usually more expensive than other forms. States often require corporations to pay franchise fees or other taxes as part of their yearly re-licensing. Added to this is the expense of minute preparation, registered agent fees, board of directors proceedings and legal fees stemming from an increased need for attorney's advice about how to perform corporate actions "properly." Moreover, more owner and employee time is spent on caretaking of the entity than is generally performed for other entities.

Tax Aspects of a Corporation

This is the downside to corporations, at least as far as small businesses are concerned. With a corporation, you do not get the ``flow-through" tax benefits that all of the other small business entities enjoy. What this means is that the profits and losses of the company are the company's profits and losses, not yours. The corporation will have to file a tax return and pay taxes on the income it receives. Then, if there are any dividends to be paid to the owners (you!), those owners will have to pay taxes again on the money received as dividends. This is the double taxation of corporations that so many shareholders grumble about. There are ways, however, for small corporations to avoid the double taxation of income. Often, a small corporation will pay its owners salaries rather than pay dividends, so the corporation gets a deduction for the amount paid to shareholders. But the IRS watches such salary payments very closely, and if you push it too far, they may be treated as dividends.

The Truth About Internet Wills

A simple Internet search yields an abundance of free Will forms, claiming to be valid in any state.  They look good and appear to have the appropriate language; what's wrong with doing a little copy, paste, edit and print?

Cover all the contingencies.  A computer program can’t ask you questions about your situation and make recommendations the way a qualified attorney can.  Each family has its own history, concerns, and challenges.  Only a personal meeting with an attorney who focuses on estate planning can create a plan that keeps those factors in mind.

Include the appropriate provisions for your situation.  The language on many “DIY” Wills is strictly boilerplate.  Are all of those provisions appropriate for you?  Should you have additional provisions?  You may have a prior Will that should be revoked; you may need to plan for beneficiaries who are minors; or perhaps you want to provide compensation for your Executor or Trustee.  An attorney who focuses on estate planning will be able to suggest and draft provisions appropriate for your Will.

Execute properly.  There are stringent rules about how the documents are executed.  If your Will is improperly executed, the documents may not be valid.  The signing ceremony is one of the most important parts of the estate plan.  A computer program or internet form does not provide the proper guidance.

Word appropriately.  There are many legal terms of art that carry specific meaning.  Incorrect use can drastically change the meaning of a gift or naming beneficiaries.  Omission of some legal terms could mean that the Will falls short of doing all that it should.  Only an experienced attorney can draft legal documents, like Wills and Powers of Attorney, and use the proper words so that they reflect your wishes effectively.

Understand the entire estate plan process.  Just as important as the documents is understanding their effect.  What does a Will control?  How does a Power of Attorney work?  What are some of the pitfalls to avoid?  What are the factors to consider in choosing an Executor, Trustee or Guardian?  Will you be affected by estate tax?  Should you have a Living Trust?  This information is important in understanding how to get the most out of your estate plan.

Protect your family.  Preserve your wealth.  Prevent uncertainty.  Create a plan with Wasdin & Oki Law today.

Power of Attorney for Care of A Minor Child: A Good Addition to the Complete Estate Plan

Are you planning a trip? Away for the day? Are your children in school? If your child needs non-emergency medical, dental, or surgical services, whether in a doctor’s office or in the hospital, you as a parent must give permission. What about times when you cannot be reached for permission? In an emergency, your child may be treated without your consent if a physician determines that your child needs immediate medical care and further delay would increase the risk to your child’s life or health. In situations that are not emergencies, your child may need unexpected care. In these cases, contacting parents for permission can delay treatment and create unnecessary anxiety or discomfort for your child.

How can you prepare for the unexpected care your children might need when you are away? Make sure the person who is caring for your children knows how to reach you at all times. When you can’t come with your children to medical appointments, or know you will be hard to reach, you may legally delegate your authority to give permission to other adults to authorize medical care for your children.

The power of attorney for care of a minor child allows you to appoint someone to give consent so that your child to receive necessary health care services when you, the parent or guardian, are unavailable.  It is essential that you trust the person you appoint to make the decisions you would make under similar circumstances.  You may appoint relatives, friends, teachers, neighbors or anyone you know and trust who is legally competent and over 18 years of age to authorize treatment in your absence.

For more information about this form and its many benefits, contact Wasdin & Oki Law today.

What a Will WILL Do (and what it won’t!)

 A will…

WON’T change the terms of other assets.  For example, the people you’ve listed as beneficiaries on your life insurance and 401k plans will receive those assets, no matter what the will says.

Is it a good idea, then, to put my spouse as primary beneficiary and my kids as secondary?  Sometimes, but not always.  For retirement benefits, having your spouse listed can have advantages.  Listing children who are under 18 can be a problem: do you really want the 5-year-old to inherit the house? Children over 18 will have access to the entire amount of the funds immediately, which may not be in their best interest.

WILL control real property, some of the time.  If the property is titled with “survivorship” rights, it will pass to the other(s) automatically.  If it is not held with such rights, or if it is one person’s name alone, a will controls that property.

Is it a good idea, then, to add someone on title with “survivorship” rights to avoid probate?  Not really.  Such a transaction is fraught with unfavorable liability and tax implications.  Better to have a good estate plan in place that dictates how the property should be handled.

WON’T keep itself up to date.  As important as it is to have a will, it’s equally important to keep it up to date.  Annually, you should review the fiduciaries listed, the status of any specific items listed in the will, your financial situation (for possible tax issues) and the status of your beneficiaries.

Is it a good idea, then, to write small changes directly on the will itself?  Absolutely not!  This could void the will in its entirety (in Georgia), and could cause litigation. Call your attorney and have it done correctly. 

WILL be more effective if its contents and location are known to those closest to you.  Be sure to either discuss it with family members or keep it in a well-marked file with other important documents.

Is it a good idea, then, to keep it in my safety deposit box?  Perhaps not.  Most banks have strict policies about who may have access to safety deposit boxes after the owner has died.  Check with your bank and, if it sounds like their policy will cause undue stress on your family (for example, if they require a court order for access), consider keeping your documents in a fire-safe in your home.

WON’T take effect before you die.  It’s good to remember that a will does not provide guidance for disability or incapacity.  Those situations are best addressed in powers of attorney (for finances and medical needs) or a living will.

Is it a good idea, then, to have powers of attorney in addition to my will?  Absolutely!  The power of attorney will control what happens until you die, then the will takes over.

WON’T let you avoid probate.  “Probate” is the process that the will goes through in the court system post mortem.  In some states, it can be expensive and lengthy.  In Georgia, however, it is a relatively simple process that is not very expensive.

Is it a good idea, then, to try to avoid probate?  Possibly.  Georgia is not a state where probate avoidance is key, but there are other reasons to possibly establish a trust or put in place other probate avoiding vehicles.

WILL make your wishes known.  Dying without a will leaves surviving loved ones with a mystery; even if you think your wishes are known, without documenting them, it is guesswork for your loved ones.  Creating a good estate plan documents your wishes and gives your survivors the gift of knowing they are doing what you would have wanted as far as distributing assets.

Is it a good idea, then, to write down what I want for my burial/cremation, funeral, and other similar arrangements?  Yes!  While such details do not always have to be in the will itself, it is a great idea to document as much as you can about where your assets are and what you would like for a memorial service.

Protect your family.  Preserve your wealth.  Prevent uncertainty.  Create a plan with Wasdin & Oki Law today.

What is a Trust? Do I Need One?

Trust: One of the most important words in the English language. Without trust, you have nothing. Trust is the backbone of marriage and at the core of friendships. But what does a Trust mean in legalese?

A Trust is a legal relationship between:

The Grantor – the person who sets up the Trust (many times this is Mom and/or Dad)

The Trustee –  the person charged with following the terms of the trust as they manage and distribute funds (think  ‘Trusted’ relative, friend  or bank)

The Beneficiaries  - the ones who get the benefit of the assets (commonly children but can be anyone even a company or another trust)

The property that is transferred to a Trust becomes the Trust estate (also called the Trust corpus, Trust res, or Trust principal). A Trust estate consists of all of the property, rights, and obligations that are transferred to the Trust.  The Trust can have many types of assets; it can be a parent leaving everything from their will or it can be as specific as a piece of property, such as a home or a piece of art.

The Trustee is responsible for managing and distributing the Trust assets. This means that the Trustee can only use the assets and proceeds from the Trust property for the benefit of the people the Trust is set up for, and never should use it for his or her own profit. 

The Trust estate is managed in accordance with the terms and conditions of the document creating the Trust, which is called the Trust agreement or declaration of Trust. This document lays out the purpose of the Trust, the identities and powers of the Trustees, the names of the Beneficiaries, how the Trust assets should be managed, and how the assets should be distributed to its Beneficiaries.

There are many different types of Trusts that can be used in estate planning, tax planning, asset management, to asset protection, to providing and planning for persons who have special needs.

A Trust, if properly drawn and funded, can be extremely helpful in many situations such as:

Avoid direct gifts to minors - Outright gifts to minors can be problematic.  A Trust will avoid having to go to court to have the requited appointment of a guardian. The Trustee, that you can choose, manages the property in the trust for the benefit of the minor(s) during their lifetime or until they reach the age(s) that you designate. Any remaining property in the Trust may be divided however you choose.

Avoid Probate -Probate is a process where a court oversees the distribution of a person’s estate. A properly drawn Trust is a separate entity that does not die when the creator dies. The successor Trustee can take over management of the Trust estate and do everything the Trust provisions allow, such as paying bills and taxes and promptly distributing the Trust assets to the Beneficiaries without court supervision.

Maintain privacy - Trusts, unlike Wills, are generally private documents. If you leave a Will that goes to probate, your neighbors and the public will be able to see how much you had and who your Beneficiaries are. In a conservatorship hearing, all your private affairs may be discussed in open court. A Trust can protect your privacy in most situations.

Discourage challenges to your estate - For example, if you cut a close relative out of receiving, or if you leave less to one child (who, say, has received extra financial help during your life), that person might threaten or actually contest your Will.  An inter vivos Trust, by contrast, is more difficult to challenge.  One reason is because the Trust is not just set up and executed at one point in time. It is set up, property is transferred to it, and the Trust operates (perhaps for years) before the death of the Grantor.  It is much more difficult to prove that the Grantor was incompetent or unduly influenced during that entire time period.

Our attorneys can help you determine whether a trust is right for you, and can guide you through the process of setting it up.  For more information, contact our office for a free 15 minute consultation.

How to Protect Yourself in Uncertain Economic Times

In uncertain economic times, it is especially important to be sure that you and your family are protected for unexpected events.  Take some time to assess your risk and make sure you are covered.  Here are some ideas:

1)      Incorporate your small business.  If you are in business for yourself, consider incorporating.  Being a sole proprietor means that your status is completely pass-through , meaning that a creditor could claim not only your business assets but your personal ones as well.  Being incorporated can help insulate your personal assets from creditors.

2)      Review your real estate holdings.  If you have rental properties, consider incorporating.  Holding the property in a corporation can help insulate you as a landlord from a myriad of claims that can come not only from tenants but from invitees of those tenants.  In addition, it is a good time to review the lease(s) and plan for appropriate changes.

3)      Be sure you are properly insured.  Take another look at your insurance portfolio.  Are you covered adequately?  Are the deductibles amounts that you can handle?  Do you understand your coverage?  Are your beneficiaries up to date?  If you need a good insurance agent, our firm can provide recommendations.

4)      Review your company documents.  If your business has several owners, you might want to insure against losses that might occur if one owner dies or becomes incapacitated.  You also want to be sure that the legal documents associated with your business address such situations and that proper power is afforded the remaining members to continue business functions.

5)      Get it written down.  Having a valid, detailed contract is priceless.  Whether it is with a contractor on your home or with a big client through your business, contracts are extremely important.  Our firm can draft contracts of any scope and size for a reasonable fee.

6)      Be sure you have a valid, updated estate plan.  A good estate plan will include a trust or trust provisions in the will, if required, as well as updated powers of attorney for finances and healthcare.  In some cases, a trust can work as an asset protection vehicle, also.

Remember, there are legal and tax ramifications for that must be duly considered before making any of the changes mentioned above. We can help. Call us today for a free 15 minute consultation!

Protect your family.  Preserve your wealth.  Prevent uncertainty.  Call Wasdin & Oki Law today.