As an estate planning attorney, I often get asked to outline the key differences between having a will-based plan and having a trust-based plan. In this 2 part series, I am going to outline the differences between the 2 types of plans starting with wills.
Pros of Wills
You have a plan that reflects your wishes.
This is important because it means that you avoid the state's laws of intestate succession, which are the laws that say how your estate is to be distributed regardless of personal relationships or your desires or wishes.
To learn more about Georgia's laws of intestate succession, click here.
Minimizes state and federal estate taxes, if your estate is subject to estate taxes.
Here in Georgia, we do not have a state-level estate tax. Your estate will not owe any money to the State of Georgia based solely on the size of your estate.
At the time of writing, the federal estate and gift tax exemption is $11.7 million per individual and $23.4 million for a married couple. With these kinds of numbers, the majority of our clients have little to no risk of estate tax exposure.
Can draft your will to protect assets going to you children from bankruptcy, divorce, lawsuits, and creditors.
Can keep assets in the family.
If you have minor children, you can name guardians for your children in your will.
Cons of Wills
Does not take effect until death.
No incapacity planning.
You can supplement your will with other related documents such as a Power of Attorney for Financial Affairs or an Advance Healthcare Directive or a Physician's Order for Life-Sustaining Treatment (PLOST), but you are unable to name a disability trustee and provide specific instructions for your care during periods of temporary or permanent disability.
Requires filing in the Probate Court.
You usually need to hire a lawyer to guide you through the probate process.
The Probate Court charges fees for every step in the process.
Takes more time and hassles for surviving spouse and children.
In Georgia, the average estate takes a minimum of 6 months to complete the probate process, but many estates take much longer to administer and distribute.
Your executor may have to seek reimbursement for expenses like your funeral or probate-related expenses from your estate. It can take months to have the ability to open an estate account to hold your funds.
Your executor must inventory and value all of your assets.
Depending on the language in your will document, the inventory may have to be filed with the Probate Court, which makes your affairs part of the public record.
Must give public notice to creditors so that they can file claims against the estate.
Easy to contest and file frivolous claims against the estate.
There is no "one size fits all" approach to estate planning. To have a detailed discussion about your specific circumstances, call to make an appointment today. Protect Loved ones & Assets Now -- Have a P.L.A.N.(sm).