I could use this space to tell you that making an appointment to have an estate plan drafted is a great idea for a Valentine’s Day gift. I could tell you about what a wonderful gift it is to your family to name testamentary guardians for your children and create trusts for management of your assets if the unthinkable happens and you and your spouse pass away. I could tell you that having an Advance Directive for Healthcare is the present of peace of mind to those who would otherwise be in the position of guessing what your end-of-life care wishes are when you are unconscious and dying. I could tell you that signing a Power of Attorney that gives your spouse the ability to handle your financial affairs if you are incapacitated is more valuable than any box of chocolates you could send.
Although these are all true, I would be ignoring an important reality: they are grim. You do not want to talk about your thoughts on life support on Valentine’s Day. Do not give an estate planning appointment as a “gift” to your spouse, do not spin it as a special treat. Have a nice dinner or take a romantic getaway instead.
But at some point, you do need to talk about what will happen when you are gone, and what you want to have happen if you are dying and cannot communicate your wishes to your doctors. These are unpleasant conversations, but they are important ones, and you owe it to yourself and your family to have them.
Most couples with minor children know that if they were both to pass away without a will, under Georgia law, their children would inherit their assets. However, many are unaware that a court will have to appoint a conservator (property guardian) to manage that property, who will be required to post a bond and regularly report to the court about the property. Even if the parents have a will, if they leave their estate to their children outright instead of passing it to a trust, a conservator will have to be appointed (though if a testamentary conservator is nominated in the will, the conservator may not have to post a bond).
Without a will, a court will also have to appoint a testamentary guardian to have custody over the minor children. This is unfortunately where, absent instructions in a will, bereaved family members may compete for custody of the children in court. Family members are often well-meaning in wanting to care for the deceased’s children, but competing petitions for guardianship usually result in damaged relationships, great expense, and more family heartache.
The solution for many couples with minor children is a simple one: a will with a testamentary trust. The will can leave everything to the spouse, but in the event that both spouses pass, it names a testamentary guardian for the minor children, and leaves instructions for the creation of a trust that will hold the assets for the children. A trustee is named and given directions as to how the assets should be managed for the children. The parents can create a “pot” trust where each child receives whatever he or she needs, regardless of the percentage of the assets that amount ends up being. Alternatively, the trust can be divided into equal shares for each child. There are usually termination instructions, so that when the children reach a certain age, they receive their share of the remaining property outright, free of trust. Parents can use any age they like for the outright distribution: 18, 25, 35, etc. If the children are older than the outright distribution age when the parents die, there is no trust and the assets go straight to the children as provided in the will.
Many young couples balk at the word “trust,” envisioning two-inch-thick stacks of paper. Perhaps they were sent copies of their parents’ estate plans, and felt overwhelmed by the size of the trust documents. These were likely inter vivos (or “living”) trusts, often used for tax planning purposes as well as anticipating management of assets in the event of long-term disability or incapacity. These trust documents are more involved because they provide the trust creator the ability to put assets in the trust immediately, during the creator’s life, and the trust may provide for stark changes in use of the property once the trust creator passes away. These trusts are most often created by well-off older parents with grown children, and can also be used to keep children’s inherited assets separate from their marital assets.
Unlike inter vivos trusts, which arise from separate documents, a testamentary trust is simply one that is laid out entirely in the will itself and arises only upon death. It has the immense benefits of removing the need for a court-appointed conservator (as the trustee manages the assets), as well as providing standards that govern how the trustee distributes the assets.
I tell many of my clients that estate planning is like pulling off a Band-Aid: the anticipation is much worse than the actual deed. Once you pull the trigger and make an appointment with an attorney, you will have these conversations, whether at home prior to or after your meeting, or at the meeting itself. The attorney will ask these questions. You will come up with answers before drafts are drawn up. And then? Relief. It is done. You have a piece of paper that is so much more than a piece of paper: you have a plan. You have communicated to your loved ones your wishes, removing doubts and providing guidance, even if you become incapacitated or pass away. You should make an appointment to meet with an estate planning attorney sooner rather than later—just not on February 14.
Casey V. Harris, Esq. is the Senior Associate at Choate & Company, P.C., 300 Main Street, Suite
201, St. Simons Island. Her practice focuses on estate planning and administration, business transactions, and civil litigation. She can be reached at 912.264.4211.
