A person’s estate includes all property he or she owns or controls. Such property may be owned in a variety of ways, including in a person’s individual name, in joint ownership, in a trust or partnership, or in another manner. A person’s estate also includes money generated upon his or her death, such as life insurance proceeds. A person’s estate specifically includes, but is not limited to, the following:
- Real property
- Personal property
- Businesses and business interests
- Powers of appointment (the right to direct who gets someone else’s property)
- Life insurance, retirement plans and annuity contracts
- Notes receivable (evidencing money owed to you by another person or entity)
- Claims against another person or entity
- All accounts (savings, checking, brokerage, etc.)
You should consult with an estate planner if any of the following describes you:
- You care about the eventual disposition of your property upon your death
- You are married or have a life partner
- You are divorced
- You are charitably motivated
- You are a parent
- You are concerned about estate taxes
- You want to be able to direct a plan for your future health care treatment
- You or your loved ones have special health needs
- You want to appoint someone to handle your healthcare and business decisions in the event of your incapacity
Powers of attorney permit you to say what happens in the event of your incapacity, and may prevent guardianship and conservatorship proceedings. Some important power of attorney documents which everyone should have include:
- Durable Power of Attorney for Health Care – permits you to designate a person or persons whom you trust to make decisions regarding health care treatment when you are unable to make or communicate such decisions for yourself.
- Living Will – permits you to direct whether you would like artificial life support to be used or withheld under dire circumstances.
- Durable Business Power of Attorney – permits you to designate a person or persons to manage your financial affairs at a time that you designate, usually upon your incapacity so as to prevent a court’s involvement in your financial affairs.
In Georgia, anyone who is fourteen years of age or older may make a will as long as he or she is of sound mind (capable of reasoning and making decisions).
Creating a business succession plan is like creating an estate plan for your business. It creates an orderly transfer of your ownership interest in your business, taking many factors into consideration like how much your business interest is worth, how will partners pay for one another’s business interests, treatment of key employees, and much more.
Failing to create a business succession plan may leave you in business with your partner’s spouse or children upon your partner’s death and may necessitate the costly and lengthy involvement of court proceedings to figure out the business.
Probate is a Court proceeding for determining the validity of and interpreting a will or, in the absence of a will, determining the rightful heirs of the decedent. Many states have adopted a standardized set of laws called the Uniform Probate Code, and have established special Courts and procedures specifically for estate administration. Probate is the procedure established by the state government to make sure that the right people receive what they are supposed to out of the estate. Certain states, including Georgia, have simple and inexpensive probate procedures for properly-drawn wills. See “Do I Need a Revocable Trust?” in the Resource Center Library for more information.
See powerpoint presentation on this subject in Resource Center Library in Business Formation and Governance section.