Many people think estate planning is unnecessary unless they have a significant estate to leave to their heirs. That, of course, begs the question, “what is significant?” The answer to that depends on who you ask. Although it is often true that the purpose of estate planning is to deal with complex issues, such as establishing trusts and minimizing estate taxes, estate planning for wealthy and less wealthy individuals alike deals with the same basic issues. Those issues deal with certain lifetime goals such as ensuring that someone you choose has the ability to make medical decisions for you or handle your financial affairs in the event you become unable to do so yourself. And they also involve basic goals for when you pass away such as making sure your loved ones are properly provided for according to your wishes.
Whether you are financially wealthy, less wealthy, or not very wealthy at all, a Last Will and Testament is a basic document that all adults should have. The basic purpose of your Will is to serve as your final directive as to how your assets are to be disposed of after your death. It answers the basic questions of to whom and how. It also answers the all-important question of who you want to be in charge to ensure that your final affairs are properly taken care of.
If you were to die without a Will, the state steps in and dictates how your property will be distributed according to the intestacy laws of each state. Under Georgia’s intestacy laws, your spouse and children are first in line to inherit your estate. Your spouse will inherit everything if you have no children. If you have children, they will share your estate equally with your spouse provided you have two or less children. If you have more than two children, then your spouse receives 1/3 and your children split the rest. Next in line are grandchildren, great-grandchildren, etc., followed by your parents.
The disadvantage of not having a Will is that your property may not be distributed according to your wishes. Other drawbacks include having the state determine who will handle the administration of your estate and who will take care of minor children. And keep in mind that the administrative burdens, reporting requirements, costs and expenses are typically substantially more for your heirs to deal with if you die without a Will.
An estate planning attorney can help you implement a Will, as well as explore trusts and other sophisticated tax and estate planning techniques.
William G. Lako, Jr., CFP®, is a principal at Henssler Financial, and a co-host on Atlanta's longest running, most respected financial talk radio show "Money Talks" airing Sundays at 10 a.m. on Talk 920 AM, WGKA.