Estate Planning

Who needs a Will? Part 5: If you get divorced.

Generally, you need to get a Will (or update your existing Will) if you get divorced.

Why? Because, if you don’t have a Will, or if you have a Will that was made during your marriage, then your former spouse (“Ex”) may still receive assets or authority.

No Will

First, to calm a fear many people have: if you are divorced and die without a Will, your Ex will not inherit anything from you. They are no longer your legal heir and will not receive property.*

But, as we have discussed before, if you do not have a Will, then anyone can be named as the Administrator of your estate and anyone can be named as Conservator of your children.

This includes your Ex.

If you don’t have a Will, then you don’t have input into these decisions. If you get a Will, then you do.

Old Will

If you have a Will that was made during your marriage, and then if you get divorced, the situation is more complicated. Depending on how the Will is worded, gifts to your Ex may be invalidated.

However, again depending on how the Will is worded, gifts made to your Ex may still be valid, and the person you just divorced may receive assets from your estate.

Also, your old Will may name your Ex as the Executor of your estate and as the Conservator of your children’s inheritance.

Obviously, many divorced people would not be okay with this. The majority of our divorced clients are not comfortable with this possibility.

To see whether your existing Will still gives your Ex assets and authority, have a probate attorney review it. It may be fine. Or you may need to get a new, Will or simply update the one you already have.

Summary

To recap: if you are divorced and don’t have a Will, your Ex won’t inherit, but still may have authority over your estate. To have input into this situation, you need a Will.

If you are divorced and have a Will made during your marriage, then your Ex may receive assets and authority, depending on how the Will is worded. To avoid this situation, you may need to revise your Will.

*However, if you are in the process of getting a divorce but it is not finalized, then your spouse is still your spouse and still your legal heir, and probably will inherit some of your stuff if you don’t have a Will. If you are in the process of getting a divorce and do not have a Will, it might be a good idea to call a probate attorney ASAP. You can get a Will while you are in the process of getting divorced. That Will can exclude your soon-to-be-Ex and can still be valid after the divorce is final.

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The statements in this blog are generalities, and exceptions exist. And, as always, this post is not legal advice. If you have any questions about this information, please contact us.

What's the deal with handwritten Wills?

Is a handwritten Will valid in Georgia? The answer is: maybe.

A handwritten Will* is one where some or all of the Will is written by hand. We have seen some confusion about whether these Wills are valid.

The good news is that Georgia law is consistent: a handwritten Will must follow the same rules as typed Wills: they must be in writing, signed by the person making the Will (called a “Testator”), and witnessed by two people, with the three of them seeing each other sign.**

The confusion comes from the fact that, in some states, a handwritten Will does not need to be witnessed. So, in some states, a handwritten Will is automatically valid. Perhaps the reasoning in those other states is that the handwriting itself is enough to prove that the Testator actually made the Will.

But not in Georgia. Here, a handwritten Will must be signed and witnessed just like a typed Will.

On the other hand, some people believe that a handwritten Will is automatically invalid, even if it is signed and witnessed properly. Again, this is not true in Georgia. A handwritten Will is valid in Georgia so long as it meets the legal requirements: written, signed, and witnessed.

So, to recap. A Will is valid in Georgia if (among other things) it is written, signed, and witnessed properly. Being handwritten does not automatically make a Will valid or invalid.

*Sometimes called a “holographic” Will. Seriously. One definition of holographic involves lasers, the other involves a pen.

**This is oversimplified, a bit. Technically, the witnesses don’t just witness the signing; by signing, the witnesses swear (or “attest”) that the Testator signed the Will.

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The statements in this blog are generalities, and exceptions exist. And, as always, this post is not legal advice. If you have any questions about this information, please contact us.

What's the deal with Joint Tenancy? Part 2: Risks

In a previous post, we talked about a joint tenancy and what it is. Briefly, it’s a way of owning property in Georgia where, if one of the co-owners dies, their interest in the property automatically passes to the other co-owner.

People frequently want to use this as a shortcut in estate planning. If the main asset of an estate is a house or land, then it may seem like it’s not necessary to make a Will. Joint tenancy is automatic and protects the property from (most) claims against the estate.

But there are some significant risks, because joint tenants are both owners of the property during their lives. That means that each co-owner has the full rights and responsibilities of a property owner.

First, this means that one co-owner’s interest in the property is available to their creditors while they are alive. Suddenly, the way of protecting property from claims against the original owner’s estate after their death actually opens up the property to claims against the new co-owner while they are alive.

Example 1: Jane, a parent, creates a joint tenancy with Lucy, her child. Then Lucy has some financial difficulty and cannot pay her credit card bills. The lender is allowed to collect on Lucy’s debt from her one-half interest in the house. Now, instead of protecting the house from Jane’s debts, she has actually put the house in danger of being used to pay Lucy’s debts. Jane and Lucy could both be out of the house.

The second big risk is a possible prodigal son issue. In that story, a rich man’s son demands his inheritance now, instead of later. Similarly, as we discussed in the last post, it is possible for a joint tenant to force the sale of the property through a special lawsuit called a “partition.” In a partition, one co-owner asks the Court to order that the property be sold at auction and the money split between the former co-owners.*

Example 2: Lucy decides she does not want to own her mother’s house later, but instead needs money now to pay off some debts. She can sever the joint tenancy, file a partition action to get the house sold at auction, and then take her half of the proceeds. Unless Jane buys the house at the auction, she loses it.

Finally, a deed is permanent. Creating a joint tenancy requires the owner to convey (give or sell) a property ownership interest to another person. Once that joint tenancy is created, the interest is conveyed to the new co-owner. The original owner cannot change their mind; they cannot take it back. The new co-owner is an owner of the property, just like the original owner. The only way to get sole ownership again is for the new co-owner to convey their interest back.

Example 3: After creating a joint tenancy with her daughter Lucy, Jane later discovers that Lucy has serious credit card debt. Jane does not want Lucy to be a co-owner anymore. But Jane cannot change her mind; she cannot force Lucy to give the interest back. All Jane can do is ask Lucy to deed back her interest in the property. At that point, Jane may be unwilling to give up such a significant asset (and it may even be illegal for her to transfer the asset away.)

So, while a joint tenancy can be seen as an easy and inexpensive way to protect an asset from probate claims, it can create a new set of problems during the co-owners’ lives. Even if the potential joint tenants are on good terms now, a lot can happen in the time between the creation of the joint tenancy and the death of one of them.

The good news is that there are alternatives, which we’ll discuss in our final post in this series.

*It is also possible to ask the Court to divide the property into separate parts of equal value. This is done most often with farmland or large pieces of undeveloped property. Most of the partition cases we deal with are houses, which cannot be split.

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The statements in this blog are generalities, and exceptions exist. And, as always, this post is not legal advice. If you have any questions about this information, please contact us.

What's the deal with Joint Tenancy? Part 1: What is it?

We occasionally receive calls from people wanting to set up a joint tenancy with right of survivorship (or “joint tenancy” for short) for their property as a form of estate planning. They’ve usually heard about this from friends or found it on the Internet as a way to avoid probate or having to make a Will.

Most of the time, once we discuss the facts of joint tenancy with them, they choose to do something else. Why? Because joint tenancy can be useful in certain situations, but there are some very definite risks.

What is a joint tenancy? It is one of two ways in Georgia for more than one person to own property together.* In joint tenancy, if one of the co-owners dies, their interest in the property automatically passes to the other co-owner. Nothing else is required; not probate, not a deed, not anything. This is the “right of survivorship;” the survivor gets the property.

The other way to co-own property is called tenancy in common (also sometimes called “co-tenancy”).** With a tenancy in common, the interest of a deceased co-owner passes to their estate, which (usually) must be probated in order to pass the interest to their heirs or beneficiaries. It is not automatic, and the other co-owner may or may not receive any part of the deceased co-owner’s interest in the property.

Today, most married couples who buy property together own the property as joint tenants with rights of survivorship. But this was not always the case. For most of Georgia’s history, joint tenancy was actually illegal. But in 1976, the Georgia legislature passed a law that allowed joint tenancy to exist and gave a set of “magic words” that are required to create a joint tenancy.***

That law also allows one (or both) of the co-owners to end the joint tenancy (called “severing”) by conveying their ownership interest to someone else.**** When severing happens, the joint tenancy is converted to a tenancy in common, and the right of survivorship goes away.

That’s what a joint tenancy is, its benefits, how it works, how it’s created, and how it can end. Now you’re ready to understand about joint tenancy’s risks and alternatives, which we’ll discuss in Part 2 and Part 3.

 

*While it’s possible for three or more people to co-own property, most of the time it’s just two.

** Some states have a third type of co-ownership, called tenancy by the entirety. Georgia does not have this, so we will not discuss it here.

***O.C.G.A. § 44-6-190. Whether a deed actually creates a joint tenancy is not always clear. If you are uncertain about whether a deed has created a joint tenancy, have a real estate attorney review the deed.

****This is a huge oversimplification, in order to avoid going deep into the weeds of property law. If you really want to know about severing joint tenancy, you’ll have to take me to lunch. And definitely check with a real estate attorney to see whether a recorded document has severed a joint tenancy.

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We hope you’ve found this information helpful. If so, please like and share this post.

The statements in this blog are generalities, and exceptions exist. And, as always, this post is not legal advice. If you have any questions about this information, please contact us.


Who needs a Will? Part 4: If you want to (help) decide who raises your kids.

Generally, you need a Will if you want to have input into who raises your kids.

Legally, children are a complex issue. Georgia probate law divides responsibility for minors into two areas: their property (real estate, money, and other stuff) and everything else (where they live, where they go to school, healthcare decisions, etc.).*

Authority for these two things is divided into two jobs. A “Conservator” has authority of the child’s property, and a “Guardian” has authority over everything else. The same person can be both the Guardian and Conservator, but that is not always the case.

Guardianship is relatively easy. If one of the child’s parents is alive, then that parent is (usually) automatically the Guardian. But if neither parent is available, then the Court will need to appoint a Guardian.

And nobody (usually) is automatically a child’s Conservator, including a parent. Therefore, if a child receives a significant amount of property (such as through inheritance), the Court will appoint a Conservator.

What does this have to do with Wills? A lot, actually.

By default, Georgia law has a priority list of who the Court might appoint as a Guardian or Conservator.

However, a parent can nominate a specific person to be Guardian or Conservator (or both) in a Will, and the Court will (usually) try to honor the parent’s nomination.** And if a parent’s Will nominates a Guardian or Conservator, then the Court usually not require a hearing or bond for someone nominated as Guardian or Conservator in a Will.

Therefore, if you want to have input into who helps raise your children, you should consider getting a Will.

*This is not the same as custody issues in divorce, which is an entirely separate area of law.

**Of course, there are exceptions, such as if the nominee is unwilling or unfit to do the job.

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We hope you’ve found this information helpful. If so, please like and share this post.

The statements in this blog are generalities, and exceptions exist. And, as always, this post is not legal advice. If you have any questions about this information or about what to do when a loved one passes, please contact us.


Who needs a Will? Part 3: If you want to decide who administers your estate.

You need a Will if you want someone you know and trust to administer your estate.

Administering an estate is a big job. If you do not have a Will, then the person who administers your estate is called an Administrator. Their job is to:

  1. Collect and preserve estate assets;

  2. Pay estate debts; and

  3. Distribute any remaining estate assets.

That’s a lot of responsibility and authority. Although the Administrator does not get to decide who receives assets or how much each person gets, they do get to make most other decisions, including how long the process takes and (sometimes) who might receive a particular item.*

While there is not a law that says who the Administrator must be, there is a law about who it can be, along with a prioritized list,** in case the Court has to choose between people who are fighting about who gets to do the job. (This happens more often than you might think.)

That list includes creditors. So anyone you owe money to when you die can ask the Court to be named as the Administrator of your estate. This list also allows almost any mentally competent adult, regardless of their relationship to you or your family.***

However, in a Will, you get to pick who administers your estate. This person is called an Executor, and they have the same job as an Administrator (collect & preserve, pay, and distribute).

In your Will, you can choose someone you trust to carry out your wishes according to your Will. And you can choose alternates, in case your first choice can’t or won’t do the job.

(And, if you are worried that naming a particular family member might cause hurt feelings or conflict in your family, you can choose a neutral professional—such as a CPA, financial planner, etc.,—to serve as Executor, instead.)

*So long as the item is not given to a particular person in a Will, and other conditions are met.

**See O.C.G.A. § 53-6-20

***See O.C.G.A. §§ 53-6-1 and § 7-1-242

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The statements in this blog are generalities, and exceptions exist. And, as always, this post is not legal advice. If you have any questions about this information or about what to do when a loved one passes, please contact us.

Who needs a Will? Part 2: If you want to decide who gets your stuff.

You need a Will if you want to decide who gets your stuff.

A lot of people think that, if you don’t have a Will, then everything goes to your spouse. Or that the estate Administrator decides how the property is divided. Or that you can just tell a friend or family member where you want everything to go. None of these is true.

If a person dies without a Will, Georgia law* dictates who receives assets, and how much. Basically, your assets are divided among your family in fractions based on who and how many family members are alive when you die.

More specifically:

  • Spouse and no children** - all to spouse

  • Children** and no spouse - equal shares to each child

  • Spouse and 1 or 2 children** - equal shares to spouse and each child**

  • Spouse and 3 or more children** - 1/3 to spouse, the children** split the remaining 2/3 in equal shares

  • No spouse or children** - all to surviving parent or parents in equal shares

  • No spouse, children** or parents - all to siblings** in equal shares

  • No spouse, children**, parents, or siblings** - all to surviving grandparent or grandparents in equal shares

  • And so on, and so on ...

This is the law. Friends, stepchildren, children’s spouses, college roommates, favorite charities, etc., get nothing. That crazy uncle who always thought Thanksgiving dinner was the best time to argue politics could receive the same as the nice aunt who taught you to drive. The child who hasn’t called you in 20 years could receive more than the grandchild who brought you donuts every Saturday.

Neither your family, friends, Administrator, lawyer, or anyone else can change this system of distribution.

However, with a Will, you get to decide who gets what. If you want a specific house, car, gun, ring, etc. to go to a specific person, you can say that in your Will. If you want to prevent certain people from inheriting anything (like your cousin that’s in jail) then you can do that in your Will. Or if you want to include certain people (like the friend who helped you through your divorce), you can do that, too.

You also can avoid leaving property to minors.

So, if you want to avoid the game of Inheriting Relative Roulette and decide for yourself who gets what, you need a Will. Otherwise, the Georgia General Assembly will decide for you.

*Specifically, O.C.G.A. § 53-2-1(c)

**Or their descendants, if they predecease you. If this is the case, things can get really complicated, including multiplying fractions. You don’t want to force your loved ones to have to multiply fractions, do you?

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The statements in this blog are generalities, and exceptions exist. And, as always, this post is not legal advice. If you have any questions about this information or about what to do when a loved one passes, please contact us.