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Not everyone has tens of millions of dollars on hand to leave behind to loved ones when they pass away.  The absence of great wealth, however, should not serve as an impediment to providing comfortable support for your survivors.  A great way to leave loved ones with adequate financial support after death is through the use of life insurance.

First, for State probate concerns, life insurance contracts and proceeds are non-probate assets and do not require court supervision, inventory, and public scrutiny.  Unlike wills, insurance contracts need not become a part of the public record when probating an estate.

Second, life insurance proceeds flow to the intended beneficiary free of income tax.  Internal Revenue Code section 101(a) provides that gross income does not include amounts received under a life insurance contract if those amounts are paid by reason of the death of the insured.

Third, with proper estate planning, life insurance proceeds can pass to the beneficiaries free of estate tax.  Under Internal Revenue Code section 2042, life insurance proceeds will not be subject to estate tax if the proceeds are not payable to the deceased’s/insured’s estate.  Also, life insurance proceeds will not be included in the deceased’s gross estate if the deceased relinquished all incidents of ownership over the insurance policy.  Incidents of ownership include (but are not limited to) the power to change beneficiaries, the right to borrow against the policy or offer it as collateral, and the power to assign or cancel the policy.  The policy holder needs to make sure that she/he relinquishes any of these incidents of ownership and does not die within three years of that relinquishment (under Internal Revenue Code section 2035, transfers made within three years of death are included in the decedent’s gross estate).

To avoid any gift tax consequences for the payment of insurance premiums, one should consider establishing an Irrevocable Life Insurance Trust.  A person can use her/his yearly annual gift tax exclusion (a person is allowed to currently make $13,000 in gifts to another each year) to make the payments to the trust which in turn will make payments on the premiums.  This will help ensure that the beneficiaries and estate will not incur any estate tax liability on the life insurance proceeds.

The attorneys of Larsen & Teusink PC are skilled in establishing life insurance trusts and many other instruments to best organize and plan your estate.  Contact one of our professionals today to schedule a consultation and to start planning your legacy.  678.553.2923.

Posted under Estate Planning, Probate Law, Tax Law, Tax Planning

Contesting a will executed by a deceased loved one is a decision not to be entered into lightly.  There are issues of jeopardizing family harmony and updholding the departed’s last wishes with respect to his/her property.  There are many instances, however, where unfair and outside pressures resulted in the drafting of a new will or the alteration of an existing will, original beneficiaries may have a right to challenge the validity of a final will.

Most successful will challenges involve attacks on the lack of formal execution of the will or the presence of undue influence.  Georgia law requires a certain number of present, uninterested witnesses to view the testator (the person having the will made) sign and execute the will, after which these witnesses make their signatures on the will near the testator’s.  There exist issues for a formal challenge, including the capacity of the testator, presence of witnesses during execution, and many others.

The other most successful means for someone to contest a will is by proving the will was created through undue influence.  Although there is a lot of case law on the subject, in Georgia, undue influence usually involves a beneficiary of a will who pressured the testator into leaving him a considerable portion of the testator’s estate, while the testator was in a weakened or influencial state susceptible to such pressure.  The fact that the beneficiary is someone who would have not have inherited by State intestacy laws and/or had a confidential relationship with the testator can create a rebuttable legal presumption that the bequest was a result of undue influence.  Although there are many other ways to challenge a will, most contests focus on instances where the intent of the testator has been replaced with that of the beneficiary.

You should consult with an attorney as soon as possible to determine what rights to a will challenge you may have.  The attorneys of Larsen & Teusink PC have the knowledge and experience to preserve your rights and to help stop those who sought only to take advantage of your loved ones for their own personal gain.  Contact one of our professionals today to schedule an appointment.  678.553.2923

Posted under Estate Administration, Estate Planning, Probate Law, Probate Procedure, Wills

The passing of a loved one is never a welcomed moment in anyone’s life.  This event is doubly painful when the deceased was the prime source of support for a spouse and minor children.  Many people believe that when someone dies, that all debts owed by the deceased need to be paid before any other claims against the estate.  This is not true in some circumstances.

Georgia allows for the surviving spouse and minor children of a deceased person to petition and obtain what is referred to as “Year’s Support.”  Year’s Support provides for monetary support as well as granting of a right to reside in the family house for a period of at least one year.  A person seeking year’s support will have to offer evidence relating to the deceased spouse’s/parent’s level of prior support as well as the survivors’ current needs and expenses.

Although notice must be given to all interested parties, an award of year’s support by a probate court takes priority over most claims to an estate, even creditors.  For example if a husband dies with $20,000 in assets and $30,000 in debts, if a surviving wife can show a prior level of support of at least $20,000 or more, generally the vast majority of the $20,000 will go to the wife as an award of year’s support.  Also, if a spouse or child has been left out of a will, year’s support provides an alternative for those disinterested parties to obtain some award from the deceased’s estate.  In practice, however, there are some courts that seek to reserve money aside for any work carried on by a county administrator or expenses for the deceased’s funeral.

Larsen & Teusink PC has experience in helping clients obtain year’s support awards which have helped them move past what has already been a difficult time.  Please call our offices today at 678.553.2923 and speak with one of our professionals today to learn more.

Posted under Estate Administration, Probate Law, Probate Procedure