Protecting Your Assets in Georgia: Essential Estate Planning Steps

In Georgia, the essential estate planning documents include: 1) A Last Will and Testament to direct how your assets should be distributed; 2) A Durable Power of Attorney to appoint someone to handle your financial affairs if you become incapacitated; 3) An Advance Healthcare Directive (combining living will and healthcare power of attorney functions); and 4) Potentially a trust, depending on your specific circumstances. These documents form the foundation of asset protection planning in Georgia.

If you die without a will in Georgia (known as dying 'intestate'), your assets will be distributed according to Georgia's intestacy laws. Generally, your spouse and children will receive your assets in proportions determined by state law. If you have a spouse but no children, your spouse receives everything. If you have children but no spouse, your children inherit everything equally. If you have both, your spouse receives at least one-third, with the remainder divided among your children. More distant relatives inherit only if you have no spouse or children. This state-determined distribution may not align with your wishes, which is why having a will is important.

Georgia offers several ways to protect your home: 1) The homestead exemption provides bankruptcy protection of up to $21,500 in home equity ($43,000 for married couples filing jointly); 2) You can title your home in joint tenancy with right of survivorship, allowing it to pass directly to the co-owner upon your death; 3) You can place your home in a revocable living trust to avoid probate; 4) For more substantial protection, an irrevocable trust might be appropriate. Additionally, maintaining adequate homeowner's insurance is essential for protecting against liability claims.

Probate in Georgia is the court-supervised process of validating a will, paying debts, and distributing assets after death. It can take 6-12 months and involves court fees and potential attorney costs. To help your heirs avoid probate, consider: 1) Creating a revocable living trust and transferring assets to it; 2) Setting up payable-on-death designations for bank accounts; 3) Using transfer-on-death registrations for securities; 4) Holding property in joint tenancy with right of survivorship; 5) Making sure beneficiary designations are updated on life insurance policies and retirement accounts, which pass outside of probate.

Georgia offers several strategies to protect assets from creditors: 1) Maximize contributions to protected retirement accounts like 401(k)s and IRAs, which have strong creditor protection under Georgia law; 2) Consider establishing an irrevocable trust, as assets properly transferred to such trusts generally cannot be reached by your future creditors; 3) Maintain appropriate insurance coverage (liability, professional malpractice, etc.); 4) For business owners, form an appropriate business entity like an LLC or corporation to separate personal and business assets; 5) Georgia's homestead exemption protects up to $21,500 in home equity in bankruptcy proceedings. Consult with an attorney before creditor issues arise, as transfers made to avoid creditors may be reversed as fraudulent conveyances.

A Georgia Advance Directive for Health Care is a legal document that combines the functions of a living will and healthcare power of attorney. It allows you to: 1) Appoint a healthcare agent to make medical decisions if you become unable to do so; 2) Express your wishes regarding life-sustaining procedures if you have a terminal condition or are in a permanent unconscious state; 3) Indicate your preferences regarding organ donation; and 4) Name your desired primary physician. This document helps protect your medical wishes and prevents family disputes over your care. In Georgia, this document replaced the older separate living will and healthcare power of attorney forms in 2007.

Georgia has no state estate tax or inheritance tax, which is beneficial for asset protection planning. However, larger estates may still be subject to federal estate tax, which in 2023 applies to estates exceeding $12.92 million per individual (or $25.84 million for married couples). For most Georgia residents, this means you won't need to worry about estate taxes reducing the assets you leave to heirs. However, income taxes may still apply to certain inherited assets when they generate income or when appreciated assets are sold.

Georgia law makes it difficult to completely disinherit a spouse. Even if you don't include your spouse in your will, they can file for a 'year's support' claim, which provides a spouse (and minor children) with financial support from the estate for one year. Additionally, a surviving spouse can claim an 'elective share' of the deceased spouse's estate. The amount varies based on the length of the marriage and other factors. To properly plan around these provisions, you should work with an estate planning attorney, especially if you have a prenuptial or postnuptial agreement that addresses inheritance rights.

A Georgia Statutory Power of Attorney is a legal document that allows you to appoint someone (an 'agent') to manage your financial affairs. Georgia updated its power of attorney laws in 2017 to adopt the Uniform Power of Attorney Act. This document is 'durable,' meaning it remains effective even if you become incapacitated. Without this document, if you become unable to manage your affairs, your family would need to petition the court for guardianship or conservatorship—a costly, time-consuming, and public process. Your agent can handle banking, real estate transactions, tax matters, and other financial decisions according to the powers you grant them in the document.