Getting your house in order involves not only making sure that your loved ones are taken care of, but also preparing for your own exit. People are often not ready for the legal process that is part of settling an estate, and loved ones who are left with a lengthy and expensive probate can quickly become overwhelmed.
Without thoughtful pre-planning and discussions with significant others, the grief of loss can cloud the next steps the family must take in order to close out the estate. Starting estate planning early can not only make the process run smoothly, but also reveal ways of minimizing taxes and simplifying probate.
Probate in Georgia
Probate is essentially the supervised legal process of estate administration that occurs on the death of an individual, called the decedent. Estate administration not only distributes inheritances and gifts to beneficiaries, but also settles debts and taxes in order to close out the estate.
Probate will take place whether there is a will in place or not, except for estates that are under a threshold as determined by state law. Under Georgia probate laws, the surviving family may file a small estate affidavit to expedite the process if the value of the decedent’s property falls below $10,000.
Heirs may also request that an estate go through probate in the Peach State if there is no will if they can agree on the division of assets as well as the payment of debt and taxes.
The probate process
When a person dies, if the estate includes a will or is testate, the individual named as the executor or personal representative (PR) petitions the court to validate the will and enforce its provisions through the swearing in of the PR. The PR may have to post bond in order to serve in this function. If it is intestate, or has no will, the court will appoint an administrator who will function in the same capacity.
After swearing in, the court issues Letters Testamentary to the PR granting them the authority to handle the financial aspects of probate, including taking inventory and appraising assets, receiving creditor notices for payment, paying all federal and state estate or inheritance taxes, and distributing the remaining assets as directed before closing the estate.
It is possible to shorten probate and avoid some death taxes by funneling assets out of the estate. This can include establishing a trust where the grantor has access to funds outside of the estate, setting up joint ownership of assets such as real estate, investments and bank accounts, or creating beneficiary designations on life insurance policies, annuities or retirement accounts.