If you have questions about your Georgia estate planning or the benefits to your family from this gift tax exclusion increase, contact us today for a consultation.  Available to meet in person, via Zoom, or over the phone.  We are conveniently located not far from Perimeter Mall in Dunwoody, Georgia.   Happy New Year to all!  It’s a great time of year to re-look your estate planning documents to make certain they are current, properly reflect your wishes, and address your concerns.  We are getting lots of questions about trusts due to increased time to probate during COVID.

©Karen S. Hindson, Hindson & Melton LLC

If you regularly make annual gift tax exclusion gifts to family members, or think you may want to start, consider leveraging your gifting with an irrevocable trust.  Call the Atlanta law firm of Hindson & Melton LLC for more information about annual gifting, irrevocable trusts, and other estate planning ideas to benefit your family.  And have a great 2018!

© Karen S. Hindson, Hindson & Melton LLC

In 2017, the basic exclusion amount was $5.49 million, but the Tax Cuts and Jobs Act of 2017  doubled the exclusion amount for years 2018 through 2025.  As of now, the 2017 provisions end in 2025 and the exclusion amount will go back to the old amount.  The 2017 tax law made portability permanent,  meaning a spouse can make use of the unused portion of the deceased spouse’s estate tax exclusion.  The 2017 tax law also made the basic exclusion amount permanent.

Keeping track of estate tax law changes can be important to your family’s financial future.  Atlanta law firm Hindson & Melton LLC can assist you with estate planning tailored for your family’s needs and goals.  Call us to discuss your family’s situation.

© Karen S. Hindson, Hindson & Melton LLC

Personal estate planning notebook for key information

Start a notebook for your family with information that would be important if you die or are suddenly incapacitated. Brainstorm and jot down initial thoughts and begin to collect information in your personal estate planning notebook. There is no better way to demonstrate your love than planning for your family’s future.

Key people and recent account statements

You will have important names and contact information, such as financial and legal advisors and insurance agents. Include a recent statement for every investment account, retirement account, bank account, and dividend reinvestment account you own. Replacing the statements in your notebook quarterly is ideal, but update them at least annually.

What about online accounts?

People conduct personal business online these days. Periodically print a statement for each online account if you do not receive hard copies by mail. For accounts that you have closed or transferred, either remove the statement from your notebook or make an annotation about the disposition of the account.

Stock certificates

Photocopies of any stock certificates or bonds for which you have the actual certificates or bonds, including all stock split certificates.  For stocks held in “dividend reinvestment plans” (DRIPs), a copy of the most recent account statement from the transfer agent for each account.

Safety deposit box

If you have a safety deposit box, include the location of the box, who has access, and consider a current list of contents or box inventory.

Where are the originals of your Will and any Trusts?

Include the identity and location of your original estate planning documents such as your last will and testament and any codicils, and trusts for which you are the grantor, trustee, or beneficiary.

Living will and powers of attorney

A copy of your living will and health care power of attorney (or Georgia advance directive for health care) should be included in your notebook along with the location of the originals.  In South Carolina, the living will is called a declaration of desire for natural death.   Also include the location of your durable power of attorney or financial power of attorney, and any designation or nomination of guardian.

Insurance – life and disability

For life or disability insurance, record the name of the issuing company, the policy number, and include a copy of the policy “declaration page” or summary sheet in your notebook. Note the location of the original documents and any helpful points of contact.

Family information

If you have family members living overseas or geographically dispersed, it might be helpful to list their addresses and contact information.  If you have a deceased  spouse or child, include a death certificate.

Other responsibilities

Are there are others who should be notified if you die? Do you have responsibilities to third parties or charitable organizations?  Are you a guardian or trustee or attorney-in-fact for someone else?

What if I own a business and I die or am incapacitated?

If you own a business or are self employed you will need to include information in your notebook such as how to access your accounts payable and receivable, information about work in progress and customer or client information. What would need to happen if you died suddenly or were disabled?

Business succession and estate planning information

Your personal estate planning documents are probably insufficient to deal with a business, especially if you operate as a corporation, LLC, or partnership. Your executor or heirs need to have proof of your ownership and rights to the business. They also need copies of any shareholder agreements or buy-sell agreements.

Anyone acting on behalf of your business after you die, or once you become incapacitated, must have proper legal authority in order to access business bank accounts or take other action on behalf of the business. Proper planning for business succession or disability is critically important if your family depends on income from your business. An estate planning and business attorney can help identify and address your specific business needs.  Business owners frequently are “too busy” to plan for such contingencies.   Take the time necessary to plan for your possible death or disability.

Copies of Last Will and Testament and any Trusts?

You may want to include an information copy of some, or all, planning documents in your estate planning notebook. This will depend in part on whether you have transparency with the individuals who might see your notebook from time to time. Remember that your heirs would need the original documents to act, so don’t lose track of the location of your originals, and be certain to record this information. If you have concerns that a document might “disappear” or be destroyed by someone displeased with the content, speak with your attorney about ways to safeguard your document.  Good planning makes for good results.

Real property whether owned individually, jointly, or in trust

List any real properties in which you own an interest, including address, county, state, country. List the names of any co-owners. If property is owned by a trust, list the name of the trust and the location of the trust document. A photocopy of the actual warranty deed to each property is ideal; it will help your advisors confirm whether the property is titled individually, joint with rights of survivorship, in joint tenancy, or owned by an entity such as a business or limited partnership.

Tax basis

If you have information about the tax basis for any specific property or investment, include that information or documentation or its location.

Loans and promissory note documents and payment info

If you have loaned money to family members or others, include copies of loan documents such as signed promissory notes, and a record of any payments received. Also, make sure your last will and testament or trust is clear if you consider certain transfers or gifts to your children as advances against their inheritance. Your estate planning attorney can help you accomplish your goals with appropriate documents.

Password and login for email and social media

For email accounts, online “cloud” repositories, bank or investment accounts, and all social media accounts, your estate planning notebook should probably include your login information including current passwords. This information must be preserved somewhere.  Your executor, trustee, or heirs will need access to this information if you die. Your loved ones might need this information if you are incapacitated. Be sure to keep this list current, since we all change passwords frequently.

Protect the security of your information — weigh the risks

How do you keep information in your estate planning notebook safe? As you have undoubtedly recognized, a person with the information in your notebook could potentially wreak havoc with your estate — or loot your accounts using your passwords. As a result, you must consider this security risk when creating and managing your estate planning notebook — and weigh the benefits of collecting and storing this information against the risks inherent in having the information assembled in one place. You can brainstorm with your lawyer and loved ones about security measures appropriate for your family’s information.

Family considerations in sharing estate planning information

While it would be most excellent if all families had only mature, responsible, reliable, and trustworthy members, that is not always the case. Most families have a strained or broken relationship, sibling rivalries, an immature or irresponsible member, or other family dynamic that should be taken into account in estate planning.   Your estate plan is YOURS, so don’t let your kids or other family members pressure you into planning decisions you don’t like.  The contents of your estate planning documents (if not the location) may need to remain totally private until after your death, depending on your individual circumstances.   Family issues are important when deciding where to safeguard your original documents and with whom to share the information described in this article.  Sometimes a trusted friend or advisor plays a role in safeguarding your information.

Second marriages – blended families – special needs information

Second marriages and blended families will have additional issues to consider, not only in the estate planning process but also in information collection, storage, and sharing. Families with a special needs member may want to add a narrative to their notebook with helpful information about the special needs individual and his or her likes, dislikes, challenges, strengths, and sources of joy. This could be enormously important under the right circumstances.

Frequent updates

Once you create your estate planning notebook, please keep it up to date. If you don’t, unnecessary confusion or suspicion amongst family members might be the result. I recommend updating your estate planning notebook quarterly; put it on your calendar “to do” list. You will be surprised how often things change and how easy updates are, once you have the notebook in place. You may even find yourself addressing issues you have avoided once you begin this process!

Copyright Karen S. Hindson, Hindson & Melton LLC – February 2, 2014, updated February 3, 2017

ALSO SEE:

• ESTATE TAXES AND IRAs
• USING A TRUST TO PLAN FOR YOUR INCAPACITY
• IRREVOCABLE LIFE INSURANCE TRUSTS

A QTIP trust – or qualified terminal interest property trust – can be helpful in the right situation.  Two common scenarios where a QTIP trust might be useful are:

• for a married individual with children from a prior marriage (who wants his or her children to ultimately receive anything left at the spouse’s death), or
• for a married individual who is concerned about leaving their assets to a spouse and the ramifications of the surviving spouse remarrying.

The trust needs to work in concert with investment account titling and beneficiary designations.  If you would like to discuss whether a QTIP trust is a good solution for you, and how it might fit into your overall estate plan, contact me at 770-939-3936.

Happy New Year!

Karen S. Hindson, Hindson & Melton LLC

Additionally, you can make unlimited payments directly to some educational and medical providers on behalf of someone else.  Of course there are regulations – for example, qualified education expenses are limited to tuition and you cannot pay for books or room and board as a qualified education expense.

The 2016 total exemption applying to estate tax and lifetime gifting is $5,450,000; for 2017 it will increase to $5,490,000.  If you make a gift to any individual that exceeds the annual gifting exclusion amount ($14,000), that will reduce your lifetime (including estate tax) gift amount.  At death, any unused exemption can be transferred to a surviving spouse but this requires a timely filing with the IRS.

If you have an estate that is potentially subject to estate tax, we can assist you with strategies designed to minimize your taxable estate and transfer wealth to the next generation.  This includes holding life insurance outside of your estate using an irrevocable life insurance trust, or using tax savvy trusts such as grantor retained annuity trusts (GRAT) to help keep the taxable value of your lifetime gifting low.  Contact us for more information about estate tax savings or gifting strategies that are right for you.

Karen Hindson, Hindson & Melton LLC

ALSO SEE

• Estate Planning Tips
• Estate Tax Portability
• Estate Tax and IRAs

There are lots of cases in Georgia that say that custody “automatically” goes to the surviving parent when the custodial parent dies.  The judge cannot award custody to someone else without good reason.  Examples of good reason include abandonment, cruel treatment, termination of parental rights, or present unfitness of the surviving parent.  The cases say that a clear and strong case must be made to deprive the surviving parent of custody.

What if the dying custodial parent gives the child to third parties while still alive?  Case precedent says the surviving parent still has priority for custody upon the death of the custodial parent.   Unfitness must be established by clear and satisfactory proof, not merely that the child would have better financial, educational, or even moral advantages with third party custodian.  Would the children suffer physical or emotional harm if custody remained with the surviving parent?

What should you do if you are terminally ill and know that your child’s other parent is unfit to have custody if you die?  The best solution would be to file a petition with the court prior to your death in order to allow the court to consider the present unfitness of the parent likely to survive – and ask the court to award custody (perhaps joint custody pending your death) to a relative or other third party based on clear and convincing evidence that the other parent is not fit.  Otherwise, upon your death, the surviving parent would be the legal custodian by operation of law.

Is there anything else you can do to prevent this scenario from happening?  A recent Georgia Supreme Court case suggests a course of action.  Entrekin v. Friedman, 294 Ga. 429, decided January 21, 2014,  involved a situation where the father died, and members of his family took custody of the child and refused to give the child to the mother.  The mother brought a “habeas corpus” action in court asking for an order that the relative turn the child over to her.  Meanwhile, the father’s sister filed her own petition for custody of the child.  The trial judge denied the mom’s habeas corpus petition and awarded temporary custody of the minor child to the paternal aunt.  The mother appealed.

The Georgia Supreme Court affirmed the trial judge’s decision based on an interesting factual twist.  The Supreme Court agreed that the mother was entitled – at least presumptively – to custody of the child following the death of her former husband.  However, the existing custody order for the child awarded physical custody of the child to the father, and the existing parenting plan specifically addressed the possibility that the father might not survive until the child was grown.  The parenting plan entered by the parties as part of their divorce expressed the “desire of the parents” that the paternal aunt of the child have physical custody in the event the father died.  That parenting plan had been approved by the Court and made a part of the final decree of divorce between the parties!

The presumption that a surviving parent is entitled to custody can be overcome by clear and convincing evidence that the surviving parent is unfit.  In the Entrekin case, the trial court found that the mother was unfit to be the child’s custodian.  The evidence was that the mom had struggled with alcohol and prescription drug addiction, had been convicted of DUI, had endangered children by driving under the influence, had violated her probation, and had recently taken prescription pain medication without telling her doctor she was a recovering addict. Under the divorce parenting plan, she had supervised visitation.  Even though the mom had access to the child’s school and medical records, she was unaware of the child’s special needs.  This was enough to establish clear and convincing evidence of her present unfitness to have custody.

What ideas can we take from this case?  First, if you are getting a divorce from someone who had serious addiction issues or any other issues that would warrant supervised visitation, consider a provision for third party custody in the event of your death as part of your divorce parenting plan.  (Even if you are perfectly healthy.)  If the plan is approved by the court and made the order of the court at the time of the divorce, that order would give the third party some legal standing to take immediate custody in the event of your untimely death.

If you are terminally ill, consider addressing the custody issue while you are still alive.  Even if you are too sick to go to Court, a guardian ad litem could be appointed for your child, and the third party relative could file the petition.

I have always advised my clients who have serious concerns about what happens to their child if they die to create an “if I die” packet of information for their relatives.  This packet could include copies of important evidence that you have collected over the years about the other parent’s unfitness.  This would give the third party hoping to be awarded custody a starting place for a court action.  Criminal information, facebook postings, recordings, correspondence, e-mails, and anything else you consider relevant could be included in your packet.  Think about what you know that would be helpful.  Think about who else knows this information and include names and contact information of witnesses.  For more information see here.

Finally, if you have relatives that you feel strongly should NEVER have custody of your child or be left alone with your child under any circumstances, you should address that also.  Last Wills and Testament often include provisions nominating a guardian for minor children in the event you are not survived by the other parent.  You can also specifically state in your Last Will and Testament that under no circumstances should a certain relative be awarded custody of your child or left alone with your child.  If there are unfitness reasons for your views, you may want to create a package of information as suggested in the paragraph just above detailing why.  The reason could be concerns about child abuse, sexual abuse, emotional abuse, addiction, or any other reason important to you.

These ideas are offered to provoke thought for those who have concerns.  Your specific situation should be addressed with an experienced lawyer who does family law and estate planning, either at Hindson & Melton or the lawyer of your choosing.  Thanks.

© Karen S. Hindson, Dunwoody law firm Hindson and Melton LLC, June 21, 2014

ALSO SEE:

• GEORGIA CHILD CUSTODY
• GRANDPARENT VISITATION RIGHTS UPDATE
• CUSTODY BATTLE BETWEEN GRANDMOTHER AND AUNT

Case study #1: “Jane”, a surviving spouse over the age of 70 ½, receives annual Required Minimum Distributions (RMDs) from the IRAs her husband left naming her as beneficiary.  While the RMDs are about the same amount as when “Dick” was alive, Jane suddenly finds herself with an unexpectedly large income tax liability because she now files Single rather than Married Filing Jointly.  Using Qualified Charitable Distributions (QCD) to fund her gifts to charity could save her money on her taxes.

Case study #2: Dick and Jane are a married couple over 70 ½ receiving annual Required Minimum Distributions from their IRAs.  They think they are paying too much in taxes.  If Dick and Jane give typically money to their church, or give to other charities, they can save money on taxes by utilizing Qualified Charitable Distributions – QCD – to make their gifts.  Senior couples with IRAs should know about QCDs for tax  savings.

What is a Qualified Charitable Distribution and how can it help a senior couple or a surviving spouse over 70 1/2? Instead of receiving the IRA required distributions from the IRA custodian, and then making gifts to church/charity, the taxpayer requests that the IRA custodian make all or part of the distribution DIRECTLY PAYABLE from the IRA custodian to the charity.  The effect is that the amount paid directly to the charity is not income to Dick or Jane, reducing the amount of IRA distributions that would otherwise be taxed as income.  The tax savings can be significant, especially for taxpayers in a higher tax bracket or for a surviving spouse.

While it is true that Dick and Jane will not receive a charitable deduction for the gift, it is more advantageous for the amount of the gift to be excluded from their income than it would be to receive the distribution and take a charitable deduction.

To find out more about Qualified Charitable Distributions or other tax saving or estate planning tips, consult with your financial advisor and estate planning attorney.

© Karen S. Hindson, Hindson & Melton LLC   March 25, 2016

Limited Power of Attorney to access safe deposit box for estate planning purposes. If you have stock certificates or savings bonds in a safety deposit box, a limited power of attorney may authorize an individual to access these documents prior to your death.

Power of attorney to make estate planning gifts. You may wish to authorize someone to make gifts of your property on your behalf in the event of your incapacity. This can be accomplished by appropriate language in your power of attorney. The gifting language can be tailored to meet your planning goals or special situations.

Do Not Resuscitate orders, where appropriate for your estate planning.  Physician Orders for Life-Sustaining Treatment (POLST) is a set of physician orders that can “travel” with a patient and be used by any Georgia health care provider to carry out the patient’s medical advance directives. This set of medical orders provides guidance regarding desired medical interventions.  It is particularly useful for the very ill or elderly who have limited ability to communicate their Do Not Resuscitate wishes to health care providers.

Discuss these Georgia estate planning tips, or brainstorm other strategies to address your specific needs with your Georgia estate planning attorney.

© Karen S. Hindson, Hindson & Melton LLC