Going through the intricacies of estate planning is a critical task that ensures your assets are smoothly transferred to your loved ones without the hassle of probate. In Gwinnett County, there are several strategies that can be employed to circumvent the often lengthy probate process. At Peach State Wills & Trusts, we've streamlined these strategies into a comprehensive approach, ensuring your estate planning is effective and tailored to your unique situation. 

Establish a Trust

A trust is a legal arrangement where one party, known as the trustor or settlor, gives another party, the trustee, the right to hold title to property or assets for the benefit of a third party, the beneficiaries.

The Importance of Proper Funding

1. What is Trust Funding? Funding a trust involves transferring assets into the trust. This means the title of the assets is formally changed to the name of the trust. This step is crucial; a trust without assets is like an empty container, essentially useless regarding estate planning objectives.

2. Steps to Properly Fund a Trust: Identify which assets you want to place in the trust. For each asset, change the title from your name to the trustee's name, as trustee. For instance, if you're transferring real estate, a new deed in the name of the trustee of the trust must be filed. For assets like life insurance policies or retirement accounts, update the beneficiary designations to direct these assets to the trust via the trustee.

3. The Consequences of Poor Funding: If a trust is not adequately funded, those assets not titled in the name of the trustee, as trustee, at the time of the trustor's death will likely go through probate. This negates one of the primary benefits of having a trust. The key for success with a trust-based estate plan is having the trust fully funded, so as to avoid the probate process. 

Joint Ownership With Rights of Survivorship

Joint Ownership with Rights of Survivorship (JTWROS) is a legal form of asset co-ownership where two or more individuals hold an equal share in the asset. Upon the death of one co-owner, the deceased's share automatically transfers to the surviving co-owner(s). 

Key Features of JTWROS

1. Equal Ownership: Each co-owner in a JTWROS arrangement holds an equal share of the property or asset. This is particularly common in real estate, but it can also apply to bank accounts, stocks, and other types of assets.

2. Right of Survivorship: The most defining feature of JTWROS is that upon the death of one co-owner, their interest in the asset automatically passes to the surviving co-owner(s), irrespective of the deceased's will or state succession laws. This is known as the right of survivorship.

3. Avoidance of Probate: Since the asset automatically passes to the surviving co-owner(s), it does not become part of the deceased's estate and, therefore is not subject to probate. This makes the transfer of asset ownership quicker and less costly. However, once the survivor passes away, the asset will likely need to be probated as part of the survivor's estate, unless the asset is placed into a trust or other tools are used.  We generally don't recommend adding children or other family members as co-owners (making them joint tenants), to avoid the probate process due to possible negative tax issues as well as increased liability exposure that may arise due to the additional owner.

Gifting Assets

Gifting assets is often used in estate planning, where an individual transfers ownership of their assets to another person or entity without expecting any payment or compensation in return. 

Critical Aspects of Gifting Assets

1. Transfer of Ownership: When you gift an asset, you relinquish ownership and control. The recipient, known as the donee, becomes the new owner.

2. Types of Gifts: Gifts include cash, stocks, real estate, or personal items. The nature of the gift can impact the tax implications for both the giver (donor) and the recipient.

3. Avoiding Probate: Assets gifted during the donor's lifetime are no longer part of the donor's probate estate upon death.

When considering a gifting plan, it is important to understand the tax ramifications of making such gifts, as there are limits to how much you can gift to another in a year, without possible gift tax exposure.  It's appropriate to discuss your gifting plans with your estate planning lawyer and tax advisor.

Pay-on-Death Accounts

Pay-on-death (POD) accounts are a straightforward and effective estate planning tool that transfers assets without going through the probate process. These accounts are set up at financial institutions, allowing the account holder to designate a beneficiary who will directly inherit the assets in the account upon the account holder's death. 

Key Features of Pay-on-Death Accounts

1. Designation of Beneficiary: The account holder names one or more beneficiaries who will receive the funds in the account after their death. The beneficiary has no access to or control over the account while the holder is alive.

2. Avoidance of Probate: Upon the account holder's death, the funds in a POD account pass directly to the named beneficiary, bypassing the probate process. This makes the transfer of assets quick and straightforward.

3. Flexibility and Control: The account holder retains complete control over the assets in the POD account during their lifetime. They can spend, invest, or change beneficiaries at any time without needing the consent of the named beneficiaries.

Tailoring Your Estate Plan

Each strategy to avoid probate has nuances and must be carefully considered as part of  your overall estate planning goals. At Peach State Wills & Trusts, we guide you through these options, ensuring that your estate plan is not just a collection of documents but a well-orchestrated plan that aligns with your wishes and provides peace of mind. Remember, estate planning is a process and not a single transaction. Your plan must be periodically reviewed and updated as needed due to changes in your wishes as well as changes in the laws.  And, as you acquire new or different assets, understanding how those assets are owned and what happens to them when you pass is a critical part of keeping your estate plan current.

Contact us at 678-344-5342 or online to learn how to plan for your estate in Georgia today. For more insights into estate planning in Georgia, download our free guide here, which is available with no strings attached.