A Last Will and Testament is an essential estate planning document. With a will, a person can leave instructions about the distribution of their personal property and other assets. They can place finances into a trust. A person can also use their will to identify a guardian for their young child or children. While a will is a valuable tool for memorializing your final wishes, this legal document is not appropriate for handling every estate planning situation. There are some things that you cannot do with a Last Will and Testament.
Transfer All Types of Property
While you can use a will to designate how you want your personal items or certain assets to be handled after death, a will cannot be used to transfer all types of property. Property placed in trust, retirement accounts, transfer-on-death accounts, payable-on-death accounts, life insurance policies, and property titled as “joint tenancy with right of survivorship” cannot be transferred with a will. Many of these accounts and policies have their own beneficiary designations and means of transfer. (Note: once you have created these accounts and policies, it’s important to occasionally review the paperwork to make sure that the beneficiary designations are up-to-date and reflect your current family status and wishes).
Arrange Special Needs or Long-Term Care
With a will, a parent can designate a guardian for any minor children (those who are 17-years or younger). However, a will is not the best way to arrange special needs or long-term care for a surviving child, spouse, or other dependant relatives. In this situation, it is better to create a trust that is designed specifically for that beneficiary and their individual needs.
Leave Money to Pets
For many of us, our pets are our four-legged furbabies. We love them like family. But, unfortunately, under Georgia law, a pet cannot inherit money or property from their owner. Animals are considered property in the eyes of the law. If someone wants to make sure that their pet(s) will be taken care of, they can name their preferred pet guardian in their will and then leave funds in a separate pet trust.
Provide Funeral Instructions
While a person can include funeral instructions in their will, it’s probably not the best place for them. Typically, a person’s family or their estate executor do not locate the will until a couple of weeks after a person’s death. Chances are, by that time, the funeral or memorial service would have already occurred. So, if you have specific instructions related to your funeral, it is better to record those instructions in a separate document and make sure your family or your executor has that document on hand – or knows where and how to access it.
Avoid Federal Estate Tax
An estate tax is a levy on estates whose value exceeds the federal exclusion limit. (As of 2021, the limit is $11.7M for individuals). Unlike some states, Georgia does not have its own estate tax – only the federal estate tax applies. A person cannot use their will to avoid or circumvent the federal estate tax. Instead, they could gift the money during their lifetime or create a trust that’s designed to reduce federal estate taxes.
Have questions? Please contact the estate planning team at Brian M Douglas & Associates
If you have additional questions about a Last Will and Testament, or if you’d like to schedule an estate planning consultation, please reach out to us at (770) 933-9009. Our estate planning team will be happy to help.