“Estate Planning” is the generic term used to describe how a person provides for the disposition of his or her assets at the time of death. There are two (2) primary instruments used to create an estate plan:
A “Last Will and Testament” is an instrument that provides, among other things, burial instructions, appointment of guardians for minor children, creation of trusts for children, tax planning strategies, and ultimately how assets are distributed upon death. Though created during life, a Last Will and Testament is an ambulatory document, and does not have any legal force or effect until death. Therefore, it can be changed, modified, altered and re-written as many times as you like, so long as such revisions are done with all of the requisite procedural necessity as mandated by applicable law.
A “Trust” or “Living Trust” is an instrument that is executed during life, the purpose of which is to receive assets. That is to say, once the trust is established, the “grantor” (maker of the trust) transfers his or her assets to the trust, and such assets are thereafter managed in the trust by the trustee, until the grantor passes away, and then the assets of the trust are transferred to the beneficiaries designated in the trust. Although tax planning strategies may be implemented within the confines of a trust, the grantor can not use a trust to direct burial instructions or for appointment of guardians for minor children.
In states where there is a significant population of retired individuals (such as Florida and New York), probate courts and the probate process can sometimes be time consuming and expensive. Consequently, trusts are the estate planning tool of choice in such states.
In most other states, however, the probate process is efficient and affordable, and because the cost of implementing estate planning via a Last Will and Testament is less costly than with trusts, a Last Will and Testament is far and away the most common estate planning vehicle.
Regardless of the estate planning tool, one must remember that many estates are subject to a federal estate tax, which has a graduated tax bracket of thirty-seven (37%) to fifty (50%) percent. Therefore, it is extremely important to analyze each and every estate on the basis of tax consequence, to ensure that the bulk of assets are transferred to the intended beneficiaries.
The Firm has formulated estate plans, with and without tax strategies, for thousands of clients. Though much of our expertise involves tax matters, we caution that the first and foremost concern is to accomplish an estate plan that provides what the maker desires, and provides a comprehensive plan of disposition for each individual’s estate.
If you wish to contact the Firm about an estate planning matter, it will be helpful, though not mandatory, that you complete a Will Data Sheet and Financial Information Sheet prior to scheduling an appointment. This information will enable us to properly evaluate your estate planning needs, as well as any attendant tax consequences to the same. You can contact the Firm to have the Will Data Sheet and the Financial Information Sheet forwarded to you via United States Mail, e-mail, or facsimile transmission.
Andrew, Merritt, Reilly & Smith, L.L.P.
Seven Lumpkin Street
P.O. Box 1246
Lawrenceville, Georgia 30046
Phone (770) 513-1200
Fax (770) 513-1201