Georgia Wills, Trusts, Probate and Estate Planning Blog

Georgia Estate Planning and Probate Law: Why Do I Need a Will?

Introduction

Few people enjoy estate planning. This is one reason so many lawyers die without wills. Estate planning is uncomfortable, but you should consider it a labor of love for your family and friends. What you do or fail to do now, may significantly simplify or complicate the tasks for your family and friends after you have passed on. Estate planning is often thought of as relating solely to tax planning. In reality, providing for beneficiaries, and determining who will care for children or adults in need of assistance is far more important.

Most will and related estate planning should be tailored to the personal requirements of each individual or family. While some people may wish to try a will kit, or writing their own will, this is risky business. There are a lot of misconceptions. A very common mistake we see in Georgia is the belief that it is best to place one's real property in the names of one's children before death. Unfortunately, this action may unintentionally cause the recipients of the property to incur unnecessary capital gains taxes when they sell the property - taxes which might have been avoided had the property been given at death through a will.

Another very common difficulty experienced by property owners in Georgia comes from the way they hold property. We have found that most married couples who own real estate have deeds which describe the property as owned by "John and Mary Smith". The Smiths think they both own the whole property. However, with the title transferred to "John and Mary Smith", under Georgia law, John owns half the house and Mary owns half the house. When John dies without a will, Mary finds herself suddenly sharing ownership of "her" house with her three children because they, along with Mary, have inherited the half of the house owned by John. This problem can be a costly disaster, especially if the children are not on good terms with the surviving spouse, (who may not be their father or mother).

A related area of concern is addressing the needs of families with spouses who have remarried and have brought their children from prior marriages into the household. Since the children of one spouse are not related by blood to the step-parent, they have no protection under Georgia law when their own parent dies and then the step-parent dies without a will. Only the blood relatives will inherit in this situation.

Your Estate

Your estate includes all the property that you own at the time of your death and property over which you have control, such as life insurance proceeds. Through your will you can give away any property you own at the time of your death. There could be certain assets that you own that may pass outside of your will, by way of a beneficiary designation, such as your retirement plans, life insurance, bank accounts, IRAs, and living trust assets or property subject to a contract. Property held in joint accounts and joint tenancy property may pass automatically to the survivors on those accounts.

Who Needs a Will

Whether you are married, single, have minor children or own even a nominal amount of personal assets or property, you should have a will. In fact, every eligible adult should have a will or other means to control the disposition of his or her assets. Even people who have living trusts should consider preparing a will because, without a will, any property not named in the living trust will pass according to Georgia law, not necessarily in accordance with a person's wishes. In Georgia, if you are competent and age 14 or older, you can have a will.

Will Requirements

Every state has its own will requirements. If you die, while a resident of Georgia, Georgia's requirements will be used to interpret the validity of the will and to determine the probate procedures. Thus, if you write your will in another state and move to Georgia, you should have your will examined to make sure it is valid.

There may be requirements in some states which are not applicable in Georgia and wills from these states are not written to take the benefit of Georgia's fairly simple probate procedures. For example, Georgia allows for wills to be witnessed using a method which makes it unnecessary to find witnesses in order to prove the will.

If a will does not satisfy basic procedural requirements, it may be rejected by the Probate Court and the property of the deceased person will be given to certain heirs as determined by a Georgia law, not by the wishes of the decedent. Certain family members or friends may have a rude awakening upon visiting the lawyer's office. What Daddy promised them in a conversation or even a letter, is not what is going to happen. In addition to avoiding such surprises, a will allows a person to give specific property such as family heirlooms, to particular people and to make provisions for charities.

Your Children

If you have minor children, your greatest concern may not be who gets your assets, but rather, who will take care of your children. The courts are given broad discretion to determine who will take care of minor children if both parents die or if the surviving parent is unavailable. Even though the court has the ultimate authority to appoint a guardian, a will is the only way to tell the court who you want to raise your children.

Further, a will can set forth what assets your children will receive, how the assets will be distributed, and who will manage the assets until such time as your children are able to manage the assets themselves. Fortunately, a will affords you many options to control the disposition of assets to your children if you should meet with an untimely death. Through a will, you can leave instructions on how the property will be held and who will act as the guardian, trustee or custodian of that property. By establishing a trust for your children in your will, you can even condition when and how they will receive benefits.

Your Personal Representative

A personal representative is responsible for making sure property is distributed according to the deceased person's wishes. This person is also called the executor or executrix. People often name their spouse, a competent relative or trusted friend as personal representative of their estate. An alternative personal representative should always be named, in the event that your original choice cannot serve for any reason. If you fail to name a personal representative, the court will appoint one for you. The person you choose should be able to make competent financial decisions and should be someone you trust.

Living Wills, Powers of Attorney and other Estate Planning Tools

Estate planning is not just about wills. Preparing powers of attorney to cover business matters, and health care issues is also very important. Repositioning ownership interests in land, bank accounts or stock can also be useful. Making sure beneficiary designations in life insurance policies, IRAs, pensions and similar investments are consistent with a will may make or break your estate plan. Living Wills help guide families when you cannot express your opinions and may ease the anxiety of your family.

Conclusion

Georgia law has relatively simple probate laws and probate expenses can be kept to a minimum with a properly written will which eliminates more costly reporting and bonding requirements. We have found that often more of our time is spent fixing problems caused by in- adequate or non-existent planning then in writing wills. We would like to reverse that experience and encourage more people to carefully address their estate needs.

SOURCE: FindLaw in an article by Krause & Hirons

ESTATE PLANNING LAW

Life Advice - Planning Your Estate

A primary purpose of estate planning is to distribute your assets according to your wishes after your death. Successful estate planning transfers your assets to your beneficiaries quickly and usually with minimal tax consequences. The process of estate planning includes inventorying your assets and making a will and/or establishing a trust, often with an emphasis on minimizing taxes. This webpage provides only a general overview of estate planning. You should consult an attorney, or perhaps a CPA or tax advisor for additional guidance.

Do I Need to Worry?

You may think estate planning is only for the wealthy. If your assets are worth $1,000,000 or more, estate planning may benefit your heirs. That’s because generally taxable estates worth in excess of the amounts in the chart below may be subject to federal estate taxes, with rates as high as 45% to 55% of the taxable estate.

Adding up the value of your assets can be an eye-opening experience. By the time you account for your home, investments, retirement savings and life insurance policies you own, you may find your estate in the taxable category.

YEAR	EXCLUSION AMOUNT	HIGHEST ESTATE TAX RATE
2002	$1,000,000	50%
2003	$1,000,000	49%
2004	$1,500,000	48%
2005	$1,500,000	47%
2006	$2,000,000	46%
2007	$2,000,000	45%
2008	$2,000,000	45%
2009	$3,500,000	45%

Even if your estate is not likely to be subject to federal estate taxes, estate planning may be necessary to be sure your intentions for disposition of your assets are carried out.

Taking Stock

The first step in estate planning is to inventory everything you own and assign a value to each asset. Here’s a list to get you started. You may need to delete some categories or add others.

Residence
Other real estate
Savings (bank accounts, CDs, money markets)
Investments (stocks, bonds, mutual funds)
401(k), IRA, pension and other retirement accounts
Life insurance policies and annuities
Ownership interest in a business
Motor vehicles (cars, boats, planes
Jewelry
Other personal property

Once you’ve estimated the value of your estate, you’re ready to do some planning. Keep in mind that estate planning is not a one-time job. There are a number of changes that may call for a review of your plan. Take a fresh look at your estate plan if:

The value of your assets changes significantly.
You marry, divorce or remarry.
You have a child.
You move to a different state.
The executor of your will or the administrator of your trust dies or becomes incapacitated, or your relationship with that person changes significantly.
One of your heirs dies or has a permanent change in health.
The laws affecting your estate change.

How Estates Are Taxed

Federal gift and estate tax law permits each taxpayer to transfer a certain amount of assets free from tax during his or her lifetime or at death. (In addition, as discussed in the next section, certain gifts valued at $10,000 or less can be made that are not counted against this amount.) The amount of money that can be shielded from federal estate or gift taxes is determined by the federal unified tax credit. The credit is used during your lifetime when you make certain taxable gifts, and the balance, if any, can be used by your estate after your death.

Keep in mind that while you can plan to minimize taxes, your estate may still have to pay some federal estate taxes. What’s more, your estate may be subject to state estate or inheritance taxes, which are beyond the scope of this webpage. An estate planning professional can provide more information regarding state taxes.

Minimizing Estate Taxation

There are a number of estate planning methods that can be used to minimize federal taxes on your estate.

Giving away assets during your lifetime. Federal tax law generally allows each individual to give up to $10,000* per year to anyone without paying gift taxes, subject to certain restrictions. That means you can transfer some of your wealth to your children or others during your lifetime to reduce your taxable estate. For example, you could give $10,000 a year to each of your children, and your spouse could do likewise (for a total of $20,000 per year to each child). You may make $10,000 annual gifts to as many people as you wish. You may also give your child or another person more than $10,000 a year without having to pay federal gift taxes, but the excess amount will count against the amount shielded from tax by your unified credit. For example, if you gave your favorite niece $30,000 a year for the last three years, you would have reduced your unified credit by $60,000 (a $20,000 excess gift each year).

* The $10,000 annual gift tax exclusion will be adjusted for inflation, as measured by the Consumer Price Index (CPI) published by the Department of Labor. The increases will be in multiples of $1,000. This exclusion applies only to a gift of a present interest in property. Therefore, gifts made intrust generally will not qualify for this exclusion.

The marital deduction shields property transferred to a spouse from taxes. Federal tax law generally permits you to transfer assets to your spouse without incurring gift or estate taxes, regardless of the amount. This is not, however, without its drawbacks. Marital deductions may increase the total combined federal estate tax liability of the spouses upon the subsequent death of the surviving spouse. To avoid this problem, many couples choose to establish a bypass trust.

Bypass trusts or credit shelter trusts can give a couple the advantages of the marital deduction while utilizing the unified credit to its fullest. Let’s say, for example, that a married couple has a federal taxable estate worth $2 million (or $1,000,000 each). Using the marital deduction, if one spouse dies in 2002 the full $1,000,000 can be left to the other spouse without incurring taxes. However, when the second spouse dies in 2003 and passes his or her $2 million estate on to their children, taxes will be levied on the excess over the amount of assets shielded by the unified credit ($2,000,000–$1,000,000 = $1,000,000 subject to estate tax).

With a bypass or credit shelter trust, the first spouse to die can leave the amount shielded by the unified credit to the trust. The trust can provide income to the surviving spouse for life, then upon the death of the surviving spouse the assets are distributed to beneficiaries, such as children. This permits the spouse who dies first to fully utilize his or her unified credit. If the trust document is drawn properly, the assets in the trust are not included in the surviving spouse’s estate. Thus, the surviving spouse’s estate will be smaller and can also utilize the unified credit. In the example above, the surviving spouse’s estate would not have to pay federal estate taxes. Because both partners have made use of their unified credits, the couple is able to pass on a substantial estate tax free to their beneficiaries.

Charitable gifts are not taxed as long as the contribution is made to an organization that operates for religious, charitable or educational purposes. Check to see if the organization you want to give money to is an eligible charity in the eyes of the Internal Revenue Service. You, or your estate may be entitled to a tax deduction for contributions to a qualifying charity. Consult your tax advisor.

Life insurance trusts can be designed to keep the proceeds of a life insurance policy out of your estate and give your estate the liquidity it needs. Generally, you can fund a life insurance trust either by transferring an existing life insurance policy or by having the trust purchase a new policy.* To avoid inclusion in your estate, such trusts must be irrevocable—meaning that you cannot dissolve the trust or change the terms of the trust if you change your mind later. With proper planning, the proceeds from life insurance held by the trust may pass to trust beneficiaries without income or estate taxes. This gives them cash which may be used to help pay estate taxes or other expenses, such as debts or funeral costs.

* Transferring an existing policy may have gift tax consequences. Consult your tax advisor.

Estate planning is very complex and is subject to changing laws. This webpage by no means covers all estate planning methods. Be sure to seek professional advice from a qualified attorney, and perhaps a CPA or estate planner. The money you spend now to plan your estate can mean more money for your beneficiaries in the long run.

SOURCE: LegalLawHelp.com

Estate Planning in Georgia

You can save a lot of money and potential chaos and hard feelings among those closest to you by preplanning how you want your assets managed when you are incapacitated, and how your property will be divided at your death.

Powers of Attorney

In Georgia, you can sign a durable power of attorney to appoint someone to handle your assets if you become incapacitated. At a minimum, a power of attorney should include the power to:

• Manage and transfer all assets
• Deal with the IRS
• Make gifts on your behalf
• Create and amend any trusts you set up

You don't need to transfer any assets at the time you sign a power of attorney, but it's a good idea to keep the person you've chosen informed about your ongoing financial matters.

You can also appoint a Durable Power of Attorney for Health Care to make health care decisions for you when you're unable to do so yourself. This person can provide informed consent for treatment, or even refuse treatment for you.

Dying Without a Will

If you die without a will (known as dying "intestate") in Georgia, your assets will be divided amongst your immediate family. If you have a spouse but no children or parents, your entire estate will go to your spouse. If you have a spouse and at least one child or grandchild, your spouse shares equally with the children but will receive a minimum of one-third of your estate.

If you have children and no spouse, your entire estate goes to your children. If you have parents and no spouse or children, your entire estate will go to your parents. If your parents are no longer alive, your estate will go to your siblings.

Alternatives to a Will

Wills eventually become public after your death, with the details of what you owned and how much it was worth available to anyone curious enough to read the court file. As a result, many people look for more private ways to transfer their assets.

In Georgia, alternatives to making a will include:

• Life insurance policies or trusts
• Gifting cash or other assets before your death
• "Transfer On Death" ("TOD") or "Payable On Death" ("POD") bank accounts
• Holding assets by joint tenancy with right of survivorship ("JTROS"), with the assets transferring automatically to the other joint tenant at the time of death
• Holding assets through a tenancy in common, with each tenant having a divided interest in the property which can be independently sold
• Retirement plans and Individual Retirement Accounts ("IRAs")
• "Revocable living trusts" (sometimes called "grantor trusts"), giving all your assets to a trustee for management before your death

Making a Will

In Georgia, you can make a valid will if you are at least 14 years old and not under a legal disability. The will must be in writing and signed by you or by another individual in your presence and at your direction. Your will must be signed in front of two competent witnesses that are age 14 or older.

A Georgia lawyer who does a lot of estate planning can explain the consequences of some of the most basic choices you must make, such as whether property you want to leave to your minor children should be put into a trust at your death. For that reason, it makes sense to consult with a Georgia estate planning lawyer and have him or her draft your will, so that you don't make costly mistakes or accidentally not accomplish what you intended.

Providing For Young Children

There are many kinds of trusts, but the most common is one you would set up for your minor children or incapacitated adult relatives for their care after you are gone and until they are old enough or well enough to take care of themselves. A parent can name a trustee to be in control of the finances and decide whether to sell or keep property, and manage assets such as real estate. The trustee, usually a family member or trusted friend, can be paid an hourly rate or a set monthly amount for their services out of the trust assets.

You will probably also want to name a guardian for your children, someone who would have physical custody of and take care of your children on a daily basis should you or your spouse be unable to do so.

Probate

"Probate" is the public process of:

• Filing and validating a will in court
• Paying all the debts and taxes of the deceased person
• Dividing up the assets according to the will or Georgia law

If you have no debts and no "titled property" such as real estate or vehicles to pass along to heirs, there may be no need for probate.

Probate lawyers generally charge by the hour, and they make sure everything gets processed according to the law.

SOURCE: Lawyers.com

Estate Planning and Divorce

Leanna Hamill of the Massachusetts Estate Planning and Elder Law Blog has recently posted two useful and informative articles (Part 1 and Part 2) about Estate Planning and Divorce, which I have combined in this post:

If you are separated from your spouse, filing for divorce, or even just contemplating it - you need more than just a divorce attorney.  You need to visit with an estate planning attorney to make some critical changes to your estate plan before and after the divorce.  This post will deal with changes than can be made before the divorce, and the next post will be about changes to make after the divorce. 

1. If you have signed a health care proxy naming your spouse as the person to make medical decisions for you, you should revoke it and sign a new one appointing someone else.   Notify your spouse that you have revoked the HCP naming them.  Make sure that anyone who knows of the old HCP (such as your doctor) is given a new one.  If you have not signed a HCP, sign one, and make sure your doctor has a copy and carry a card in your wallet indicating who your new health care agent is, and where your HCP is located.
2. Remove your spouse from any Power of Attorney documents that you've signed appointing them and notify any entities that may have received a copy of the old Power of Attorney so they know it has been changed.  The POA is a powerful document which can give the holder the right to access bank accounts that are in your name alone, get financial and sometimes medical information about you and even sell real estate that is your name.  It is vital that you sign a new one if you do not want your spouse to have this power. 

During this time you should also be thinking about your estate plan after your divorce. If you would not want your former spouse to be in charge of the money that you will leave to your minor children, you will need to set up a trust, with someone else as trustee.  This can be a sibling, parent, friend or even a bank or other financial institution.  Your estate planning attorney can explain what the responsibilities of the trustee are, so that you can make the best choice, and can help you determine when the best time to sign the new documents are.

____________________________________________________________

You are nearing the end of your divorce, the final hearing or settlement is in sight.  The last thing you want to do is hire another attorney, write another check out of your bank account which may have taken quite a hit during the divorce.  But, you must.  You need to see an estate planning attorney, to make sure that those things you fought for in the divorce are protected, and that your wishes are honored.   And, rest assured, visits with an estate planning attorney do not involve any court visits, there are no "opposing parties" and generally estate planning attorneys do not charge by the hour. 

You should meet with your estate planning attorney to form your plan before the final divorce hearing, so that the documents can be signed as soon as possible after the final hearing.  This is because during the 90 days after the final hearing, you are still married, and if you pass away during this time without a new plan in place, your soon0-to-be-former spouse could inherit everything.

After your divorce, in addition to signing your new estate planning documents, you should also make sure that you have changed the beneficiaries on any life insurance policies, 401(k) plans, IRAs, and any other accounts that may have had your former spouse listed.  If you have set up a trust, your estate planning attorney can assist you in making sure that the trust is properly named as the beneficiary of these accounts.

SOURCES FOR POST: Massachusetts Estate Planning and Elder Law Blog and Georgia Family Law Blog

Guardianship: Making the Right Choices

Parents of children who have disabilities have many issues to worry about. Perhaps one of the greatest is who is going to look out for and protect their child when they are no longer able to do so? When thinking of this eventuality, parents may turn to other family members or friends to step into their role should they become incapacitated or die. Alternately, parents may arrange to have this done by an individual advocate or a nonprofit, community-based organization whose mission is to support and advocate for individuals with disabilities.

Advocates can advise and offer assistance concerning the person who has special needs, but cannot make decisions that are legally binding for that person. The power to make legal decisions for another individual is done through guardianship or conservatorship.

What is Guardianship/Conservatorship?

Every person eighteen years of age or older is deemed to be competent by law, regardless of his or her actual ability or capacity. A guardianship or conservatorship, in general, is a legal mechanism that must be approved by a court that grants a competent adult legal power to make decisions for another person, one who is considered incapable of making decisions for himself or herself. This person may be a minor (under 18 years of age) or an adult who has been declared incompetent by the court. In the case of a minor, guardianship will generally terminate when the child turns 18, or, in come states, upon marriage if the child marries before age 18.

Legislation regarding guardianship varies by state, but generally, the guardianship procedure requires a petition to be filed in Probate Court. Also, a clinical team (consisting of a physician, licensed psychologist and social worker) must report that the individual is incapable of making informed decisions with respect to personal and financial affairs, and that failure to appoint a guardian would create an unreasonable risk to the individual’s health and safety.

When parents prepare for the future by making a will, it is crucial to consider the issue of naming a guardian or conservator for a dependent child or adult with a disability. Unless the parents’ will specifies who they want as guardian or conservator, the courts will decide. If appointed, a guardian has the control over the ward’s (the person who is represented by the guardian) personal and financial affairs. A guardian must file an inventory and annual accounts with the Probate Court. As a result of relatively new case and statutory law, there are certain important decisions that a guardian cannot make without specific court authorization. These include consenting to treatment with anti-psychotic medications, admission to psychiatric hospitals or consenting to experimental medical treatment.

There are different types of guardianship or conservatorship, each of which confers different powers.

A Natural Guardian generally refers to a parent. In most cases, a natural guardian has custodial rights but only limited rights to control the assets of a ward.
A Guardian Ad Litem is often appointed only for the limited purposes of litigation.
Guardian of the Estate, Guardian of the Property, or Conservator usually refers to someone appointed to manage assets and make financial decisions for the ward.
General Conservatorship or Guardianship of the Person and Estate typically provides full decision-making powers (with respect to finances, medical decisions, living arrangements, etc.) for a person deemed to be unable to make decisions or perform necessary tasks on his or her own.

Limited Guardianship/Conservatorship

Powers of a conservator or guardian can often be limited to reflect the needs of the individual who has a disability. With a limited guardianship, the guardian is granted full power only in a specified area or areas in the life of the person with a disability. In fact, laws in a number of states specifically provide for the appointment of a limited conservator or guardian for certain individuals with developmental disabilities. A limited conservator or limited guardian is appropriate for individuals whose conditions impair their ability to care for themselves or their property, but not to the extent that a general conservatorship or full guardianship is required. A limited conservatorship or limited guardianship encourages maximum self-reliance and independence of the adult with developmental disabilities by giving the conservator or guardian power only over those activities the individual is unable to handle.

Alternatives to Guardianships/Conservatorships

Not all situations require the appointment of a guardian. In certain situations, a person with a disability may only need assistance and protection managing money rather than require the services of a court-appointed guardian and all that it entails. In these circumstances, an alternative to guardianship is a Supplemental Security Income Representative Payee who can be designated by the Social Security Administration to receive and disburse SSI benefits on behalf of that person. The Representative Payee must make an annual accounting to the Social Security Administration on how the funds are spent.
Another alternative to guardianship is a Durable Power of Attorney. By signing a Durable Power of Attorney, a person with a disability can allow certain decisions such as those concerning management of his or her property, living situation or medical care to be made by another specified person, without court intervention. Certain rights can be preserved without the expense and time of court proceedings.

Additionally, a Special Needs Trust can be effectively administered by a trustee (one who manages the trust) or co-trustee to manage the finances and personal effects of a person with a disability, in lieu of a court-appointed general conservatorship or guardianship. In some situations, a skilled trustee or co-trustee can help meet the financial and personal needs of a person with a disability without court intervention or a restriction of certain rights. However, in the situation of only one individual serving as trustee and guardian, opportunities for “checks and balances” are decreased, posing the possibility for conflict of interest.

Whom to choose as Guardian

The appropriateness of the person being nominated should take into account some basic, yet often overlooked aspects:

Age: The age of the potential guardian in relation to the length of time that the guardian will have to serve should be considered. If the ward is a child, he may outlive a guardian such as a grandparent, aunt or uncle. For this reason, or in case any other situation arises where the guardian is unable to fulfill the task, parents should consider naming a “back-up” or contingent guardian in addition to their first choice.

Existing relationship with the ward: The guardian’s function is necessarily one that entails making personal decisions for the ward, so the guardian should be someone whom the individual trusts and with whom he or she has a good relationship, and who will actively participate in care decisions, provision of services and attention to the needs of the individual. Professionals or institutions, such as attorneys, accountants or banks, can be named but are not necessarily a good choice since their services are usually costly and, lacking any personal relationship to the individual, may not be sensitive to his or her needs.

What is the role of other family members?

Family members are usually the first and best choice as guardian or conservator; however, it should not always be presumed that this will be the case. Family members may not be suited for the role for a variety of reasons: they may not live nearby; they may not have the ability to assume the responsibility; naming one sibling or family member over another may cause friction; or they may simply not want to take on the job. However, by naming co-guardians to share the responsibilities or by asking them to assume other, related roles, family members can be included. They can be named to act as advisors to the guardian or conservator, be notified of certain actions and be copied on all important documents relating to decisions made by the guardian.

Making choices

A guardian or conservator will have considerable power in the life of the individual with a disability, so the individual should have as much input as possible in the choice. The process should evolve from discussions that include the person who has a disability as much as possible and an attorney who is knowledgeable in this type of planning. A clear, realistic picture should emerge of what possible future needs and decisions will have to be addressed (financial, residential, educational, health-related) and how much help the individual will need with each. The wishes and feelings of the parent and the child can be objectively discussed and incorporated into the level of support that is needed, and choices for guardians or advocates can be made as necessary.

SOURCE: Parent to Parent of Georgia in an article by Nadine Vogel reprinted from Exceptional Parent Magazine

Fido, Stay! With Me! Pet Trusts and Pet Protection Documents

The first question in pet protection documents is “who owns the pet?” Why is that so important? Well, get divorced or split from your domestic partner or roommate and see! Because pets are classified as property in the eyes of the law, they are often the foundation of long court battles. So, it’s a good idea to have an agreement governing ownership.

Pet owners can now create legally recognized and enforceable instruments that preserve the continuity of care for pets when their owner is unable to care for them or dies.

Today, American homes house more than 88 million cats and 75 million dogs and treat pets more like family than ever before. Because pets are an essential part of their owners’ lives, it is not uncommon to find animals traveling with their owners as well as sharing their beds. In 2007, Americans spent an astounding $41 billion a year on their pets and by 2010 are expected to spend $52 billion yearly.

Sadly, pet owners often do not address the crucial issue of who will care for their pets when they are no longer able to do so. The consequences of failing to provide for a pet’s transitioning and continuing care can be harsh.

Too often, the pet will end up with neither a home nor a family. Although in some instances family or friends consider the pet a dear member of the household, and will continue to care for the pet, in most cases there is no one left who is able or willing to care for the pet. Generally, pets end up in shelters where in 2007 almost four million dogs and cats were euthanized—nearly 9,600 per day.

In either circumstance, the owner may feel more secure with an enforceable document than with a pledge or handshake as the foundation for a pet’s continued care. Additionally, because pets are property, ownership and the transition thereof makes the switch smoother for all involved with an official record of the owner’s intent.

Types of Pet Protection Documents

The Pet Trust

A pet trust provides detailed pet care instructions and directs the disbursement and management of the fund in the trust throughout the pet’s life. This allows the pet owner to control amounts and schedule of disbursements.

One of the best reasons to establish a pet trust is that a pet trust can help keep the pet and owner together, whether the owner requires in-home care or moves to an assisted living facility or nursing home.

A further benefit of establishing a pet trust is that the trust funds will not be subject to probate. Therefore, the pet’s care is not delayed by court action or inaction. Furthermore, because they are not subject to probate, pet trusts are not public documents.

Wills, Health Care Proxies, and Powers of Attorney

The efficacy of pet trusts and estate planning documents that include pet protection can be enhanced by drafting wills, health care proxies, and powers of attorney with enforceable provisions concerning the care of animal companions. It is important to keep in mind that wills operate only after the pet owner’s death, while health care proxies and powers of attorney operate only before a pet owner’s death. By contrast, pet trusts operate both during the pet owner’s life and after the pet owner’s death.

Top 10 Pet Protection Document Tips

1. Ask the Client Who Owns the Pet

   All advisors, lawyers, accountants, financial professionals, and other counselors and consultants should ask their clients whether they have any pets. Before proceeding, determine who is the owner of the pet. If the pet is owned jointly or there is even a chance that someone else has an interest in the pet, determine this first and work out the ownership before proceeding with any other documents. Thus, a client must first answer the important question of who owns the pet.

2. Life and Death

   The pet owner may become unable to care for one or more aspects of the pet’s life, yet not be legally incapacitated as defined in guardianship statutes. For example, an owner may want the pet guardian to act because she has difficulty remembering whether or not she fed her cat. An arthritic greyhound owner may want the pet guardian to begin acting, in a partial role, when he can no longer adequately exercise the dog. If the word “incapacity” is used in the documents to describe the owner’s possible mental state, it may trigger, or be used as evidence in, a guardianship proceeding.

3. It’s All in the Details

   Identify the pet by color, size, shape, breed or mix, markings, any other salient physical characteristics, habits, and personality. Leave detailed instructions, based on the pet’s routine and preferences, about all aspects of the pet’s care, such as food brands and specific flavors, amounts and feeding times, housing, grooming, medical care, toys, boarding, walks, exercise, and socialization. Provide contact information for groomers, walkers, and other service providers and determine who should receive veterinarian reports. Direct that pets who have bonded with each other be kept together. Finally, consider including instructions concerning the pet’s eventual cremation or burial, and memorial.

4. Decide How Much to Put in Trust

   The amount placed in trust can be large or small. First determine how much it costs you to keep your pet. Factors to consider include: type of pet, age, health, anticipated lifespan (especially important for species with long lifetimes such as some birds or reptiles), lifestyle (including the types of expenses usually incurred for food, grooming, boarding, kennel fees, sitters, walkers, and toys and travel), number of pets, cost of living and inflation, and possible reimbursement for extraordinary expenses such as the installation of a fence around the pet guardian’s property.

   However, because disgruntled heirs may challenge the terms of a trust or will that leaves a substantial amount for the benefit of a pet, and because many state statutes permit the court to reduce the amount of funds or property in a pet trust if that amount substantially exceeds the amount required for the intended use, it is important to explain in detail (with examples of past expenses) why the amount left for the pet’s care is reasonable.

5. Choosing Trustee and Defining His Powers

   The trustee should be an animal lover. Because the trustee’s role is to distribute funds to the pet guardian for use for the care of the pet, it is important that the trustee agrees with the owner’s spending habits even though the trustee, in his fiduciary capacity, has a legal obligation carry to out the terms of the trust.

   Consider giving the trustee the power to choose a guardian for the pet in the event that all designated pet guardians are unavailable. Depending on the size of the trust and the relationship of the parties involved, the trustee could even be given the power to purchase a residence for the pet and its guardian. Permit the trustee to remove the pet guardian and replace him with the successor guardian, without the necessity of court intervention. Because some states permit the trust to exist only up to 21 years, and many pets could outlive their trusts, the trustee or pet guardian (assuming the pet’s owner is not able to prepare and execute it because of disability) should be entitled to write another pet protection document or pet trust, consistent with the intent of the existing pet protection document or pet trust, if the pet or its issue are still alive, in order to continue to protect them.

6. Choosing a Pet Guardian

   The guardian may keep the owner’s pet or care for the pet along with the owner. The owner should choose an individual who knows and likes the pet or likes pets in general. Conversely, the guardian should be someone whom the pet likes. It is important to allow the pet guardian to exercise discretion when faced with new circumstances, as long as that discretion is exercised in the pet’s best interests. Name as many alternate pet guardians as possible, in case prior pet guardians are unable to act.

7. Pet Retirement Homes

   Regardless of how many pet guardians and back-ups are named, the owner should name a retirement home (and a back-up retirement home) to care for the pet. The organization acts as a temporary or permanent pet guardian in the event all previously named pet guardians are unavailable or unable to act and can assist in finding a new family home for the pet.

8. Provide an Incentive

   To encourage compliance with the pet owner’s wishes, pet owners should consider naming as pro rata beneficiaries of the trust remainder any facilities that keep the owner and pet together during the owner’s disability or until the owner’s death.

9. Putting Plans Into Effect

   The pet owner should be allowed to trigger the enforcement of the pet trust and other pet protection documents at any time.

10. Sign on the Dotted Line

    All pet documents should be signed by the owner, guardians, and, if there are trustees, by them as well.

No Matter What, We Are Family

Pets are increasingly valued members of the modern family, and, as such, pet trusts and pet protection documents are ideal tools to use to help owners and their pets remain together, to ensure that pets are well-cared for, and to establish procedures for legally transitioning pet ownership.

SOURCE: American Bar Association Law Trend and News in an article by Rachel Hirschfeld

Rachel Hirschfeld is a nationally recognized expert on pet protection documents whose mission is to ensure that every companion animal has a secure future and that no pet who has found a loving home will ever be abandoned again. You can contact her through her websites, www.pettrustlawyer.com and www.mypetprotection.com.

Mistress battles Cobb millionaire's kin over estate

Cobb County millionaire Harvey Strother had three weeks to live when his mistress wheeled him into his lawyer's office to change his will one last time.

Strother, 77 and fading fast, was drinking a gallon or more of wine a day, according to court testimony. The tortured alcoholic barely resembled the vibrant salesman who racked up a fortune with car dealerships in Cobb and south Georgia.

Anne Melican, his mistress of seven years, accompanied the wheelchair-bound Strother into the Naples, Fla., law office on Dec. 16, 2003. With an unsteady hand, Strother changed his will so Melican would be left with a South Florida property, plus a slip at a yacht club where they'd docked his boat, the Lady Anne. He also directed his estate to pay off the balance on a Cape Cod, Mass., condo he built for her.

It was the second time in six months Strother had amended his will and the third time in six years. All told, the changes left about $6 million of Strother's $37 million estate to Melican and her son, including $7,900 a month for Melican for the rest of her life and a $1.3 million Marco Island, Fla., condo.

Were these amendments the wishes of a sound mind and the product of Strother's desire to take care of Melican after his death? Or did Melican take advantage of an addled alcoholic, unduly influencing Strother to ensure she'd get millions?

Marietta lawyer Sidney Parker, the executor of Strother's estate, and one of Strother's grandchildren say it's the latter, and a Cobb Probate Court judge has ruled that a jury should decide whether the amendments are valid.

The Melicans have appealed to the Georgia Supreme Court, which is expected to issue an opinion in the coming weeks.

In 1988, Strother signed a will leaving half his estate to his widow, Betty, and the rest to his three children and grandchildren.

"We believe she took advantage of Harvey at a time he was very vulnerable, weak and struggling," said former Gov. Roy Barnes, who represents the executor. "With Anne Melican, it was always one way: What do I get? What does my son get? It was everything to her benefit."

In a telephone interview, Melican strongly disagreed with that characterization.

Many boomers favor comfortable retirement over leaving wealth to heirs

By MARSHALL ECKBLAD
Dow Jones Newswires
Published on: 12/11/07

New York — The greatest transfer of wealth in history may end up leaving heirs disappointed — and could mean big changes for financial advisers. As "mass-affluent" boomer millionaires, or baby boomers worth around a few million  dollars, start to turn 65, forecasts and patterns in their retirement planning suggest that many may leave little or no substantial wealth to their children.

The affluent boomer crowd typically has plans for a fully funded dream retirement that lasts two decades or more. Having bankrolled kids through years of education and early adulthood, these boomers feel less than obligated to pass along to their children much of their hard-earned wealth.

For those clients who do want to leave a sizable inheritance, financial advisers may need to lay out for them the difficulty of both living an active and exciting retirement, and also leaving wealth to their children.

"Invariably, their reach exceeds their grasp," says Milo Benningfield, founding principal of Benningfield Financial Advisors.

Simply having enough money to make it through retirement can be a challenge. Joe Montgomery, a managing director of investments at Wachovia Securities, a unit of Wachovia Corp., recently had to tell a client that his assets didn't match his dreams of an imminent retirement; as Montgomery phrased it: "I don't think this dog hunts."

Adding to advisers' challenge, converting clients' children into a new-generation clientele may be more about capturing relationships — for when Boomers' children accumulate wealth of their own — than capturing actual assets.

While most of these clients are still years from retiring, by most definitions, the first members of America's enormous postwar population boom are now reaching age 65.

Ten Things to Think About: Choosing a Guardian for Your Child

Having children adds an new and extremely important dimension to estate planning. If all of a child's legal parents are dead or incapacitated, and never made arrangements for such an emergency, the child will have to be placed with a new family. This is an extremely disruptive process for the child, even if the new family are grandparents or other relatives. It can be avoided if a parent chooses a guardian for the child in a will or a grant of guardianship.

1. DIFFERENT PURPOSES. There are two kinds of guardians: guardians of the estate, and guardians of the person. The former manages the money or assets held by a child, either when the parents are alive or after their death. A guardian of the person, however, is someone who becomes a substitute parent for the child should the child's actual parents die or become incapacitated or otherwise unable to take care of them.

2. MATCHING ATTRIBUTES. When selecting a guardian, be aware of the two types, and choose people with the skills or attributes that best suit those roles. In other words, your accountant brother-in-law may be a terrific choice as guardian of the children's estate, but his workaholic nature may make him a poor choice for guardian of the person.

3. MULTIPLE GUARDIANS. Just as you can choose different people to be guardians of the estate and person, you can also choose more than one of each type if you have multiple children. For instance, if you have a large family and know that the burden of raising multiple children or managing their assets would be too much to ask of one person, you can assign certain guardians to certain children. Whereas there are probably fewer emotional ramifications to such a choice when guardians of the estate are involved, there are larger considerations at issue when dealing with guardians of the person. Do you really want your children split up into different families if you and your spouse die or become incapacitated before they are grown? Maybe, maybe not.

4. SHARED VALUES. Choose someone you know well and who shares your goals, values, and parenting style, whether you are selecting a guardian of the person or estate. Even if the person you select is limited to making financial decisions on your child's behalf, you want that person to share your philosophy of childrearing in general.

5. FINANCIAL STABILITY. Choose someone who has the financial resources to care for your children. It costs a lot of money to raise and educate children, and you do not want to impose these economic burdens on someone who can not meet them.

6. LONGEVITY. Choose someone young enough to see their responsibilities through to your child's adulthood, and in good enough health to withstand the challenges of childrearing. While physical disabilities do not necessarily preclude good parenting, it is wise to consider health factors that may limit a person's life expectancy or ability to parent. It may be tempting to choose your own parents as guardians, but logically speaking they are less likely to outlive you than are persons your own age or younger.

7. BE INDEPENDENT. Don't be influenced by others' wishes as to whom you should select to be your child's guardian. Unless the person you've selected opposes your choice, this decision belongs to the parents alone.

8. CONSIDER CHARACTER. Don't choose someone that a court would not approve as a guardian, such as someone with a history of drug or alcohol abuse or a criminal record.

9. TALK IT OVER. Although the guardian selection decision belongs to the parents, it is important to get approval from the person you are considering before you make it final. There may be valid reasons why someone can not fulfill your request, and it is better to find that out while you still have the option of making another selection.

10. GET IT IN WRITING. Once your decision is final, consult your attorney to draft the necessary documents to make your choices legally binding and official. Wills, trusts, and other legal documents can be used to implement your guardianship decisions. Your attorney can advise you on proper procedure, prepare the necessary paper work, and file any required documents.

SOURCE: FindLaw

Writing Your Will

Everyone knows you should have a will, but apparently more than half of us haven’t gotten around to it yet. Here is some information that might convince you to get it done.

Why should I go to the trouble of writing a will?

A will lets you control what happens to your property. If you have minor children, a will enables you to designate who will care for them after your death. Through a will you can nominate a legal guardian for your children and name an executor to handle the distribution of your estate to your designated beneficiaries.

What happens if I die without a will?

Since your property must still be distributed, the probate court in your area will appoint someone as the administrator of your estate to distribute the property in accordance with the state laws. The costs associated with this are more expensive than having an executor named by you in advance and must be paid out of your estate before any property is distributed.

What is a video will?

More and more people are preparing a video in which they read the will and explain why certain gifts were made and others not made. The video recording might also show the execution of the will. Should a disgruntled relative decide to challenge the will, the video can provide compelling proof that the person making the will was mentally competent and observed the formalities of execution.

Keep in mind that videos do not last forever and are subject to damage. You should consult a lawyer before making such a video to find out about your state’s laws on video wills. Generally, such a video would supplement, not substitute, a properly prepared written will.