When you’re in good health and don’t anticipate any major changes in your life, it’s easy to put off estate planning. It may seem morbid, or perhaps just too expensive, to consult an estate lawyer and make formal plans when you aren’t actively preparing for the end of your life.

But time catches us all unaware. The CDC states that “the chance of having a stroke about doubles every 10 years after age 55.” A sudden illness or catastrophic accident can change your capabilities and your financial future. If a loved one becomes disabled or dies, your estate may face unexpected demands. And a divorce or an estrangement in the family could change everything.

What Can Happen Without a Plan?

Although everyone’s estate plan will be different depending on their needs and resources, the key components of estate planning include:

  • Trusts to retain property for beneficiaries
  • Transfer-on-death and beneficiary provisions for financial accounts
  • Wills
  • Powers of attorney allowing loved ones to make medical and financial decisions
  • Medicaid planning for long-term care needs
  • Life insurance and burial insurance
  • Tax planning to avoid unexpected bills

Sudden Death

Unexpected death can destroy a family, not only from the sudden emotional loss but also from the enormous financial sinkhole that it can create. Someone who dies without a will is “intestate”—without a testament. Each state has intestacy laws that divide property between the closest living relatives of the deceased person, or “decedent.”

In Georgia, when a married person dies intestate, their surviving spouse is the sole heir, if they had no children. The decedent’s parents and siblings have no inheritance rights. This can lead to heartbreak and open conflict, especially if the marriage was rocky beforehand or the decedent had family heirlooms in their possession.

If the decedent had children, the property is split equally between those children and the spouse, but the spouse cannot take less than one-third. The difficulties in asserting rights to one-third of a house can easily be imagined, especially if the children are minors or adults with a different parent. Before formal title can pass, the estate has to be administered in probate court, which will take some time. This can leave the heirs without access to bank accounts and other resources in the decedent’s name.

Transfer-on-death (TOD) and beneficiary arrangements can allow loved ones access to financial accounts without waiting for the probate court. Owning real estate with loved ones as joint tenants with right of survivorship also ensures that the property passes instantly without probate. But both of these options have their drawbacks, as well.

Loss of Capacity to Make Decisions

When an illness or accident results in prolonged incapacity—inability to communicate or make decisions—the shock and confusion can lead to family conflict. Despite popular belief, a spouse does not automatically have power of attorney (POA) for an incapacitated person, and they may have considerable difficulty accessing the resources they need to handle their affairs.

Creating a durable POA for your spouse, parent, or another trusted person will allow them to make payments and use your accounts so long as you cannot make your own decisions. An advance directive for healthcare lets you clarify your intentions for life-sustaining treatment and select a health care agent who can make medical decisions. It is vital to have a conversation with the people you choose about your wishes and what rights and responsibilities you want them to have.

Paying for Nursing Care

Due to the skyrocketing costs of private nursing care, even relatively affluent people have found themselves in need of Medicaid in their senior years to pay for their home care or facilities. Medicaid has strict income and asset limitations, which vary by state. Moreover, there is a look-back period of five years that prevents applicants from giving away their assets in order to qualify immediately.

An experienced estate planner can help you secure your property for the future and plan ahead to ensure your eligibility under changing laws and rules.

Your Family’s Changing Needs

If you have simple wishes for your estate, such as leaving everything to a spouse or a child, you may feel that intestacy law or a boilerplate template will can take care of your estate needs. Unfortunately, those cannot take into account the needs of your heirs. Leaving assets outright to young people, seniors, or disabled persons of any age can create more problems than it compensates for.

Minors and young adults may not be able to handle a windfall inheritance. Creating a trust can ensure that your minor children or grandchildren have limited power, if any, before a certain age. It can also earmark the assets for a particular use, such as tuition or house purchases.

Disabled people who rely on government benefits, as well as seniors on Medicaid, have to abide by state income thresholds. An unexpected inheritance can disqualify them from the care they need. It is vital to get legal advice about how to transfer assets to them, which may involve a special needs trust (SNT) or ABLE account.

Reach Out Today

Reviewing your assets and seeking advice can be overwhelming. Attorney Mike Bascom, who has decades of experience in estate law and planning, wants to help you manage your needs in Georgia. Call 770-285-5493 today to schedule your free initial appointment in our Cumming, GA offices.