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Common Law Marriages, Dead or Alive? Both.

October 25, 2011

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A client recently asked me about the status of Georgia common law marriage, and in answering him, I thought it might be a good time for a reminder for all of us (including those in other states) that even if a state no longer recognizes common law marriage, usually such marriages remain valid if formed prior to the date of a statutory enactment prohibiting them. In addition, most states also recognize common law marriages formed in other states.

For example, the State of Georgia recognizes common law marriages formed prior to January 1, 1997 as well as valid common law marriages formed in other states.   Under Georgia law, a valid common law marriage may be formed between a man and a woman if they have (1) the capacity to make a marriage contract, (2) actually entered into a nuptial contract (usually proven by evidence of the couple holding themselves

List of Things To Do Before Initial Meeting with Estate Administration Attorney

For those of you who are named as Executor or Personal Representative under the Last Will and Testament of a friend or loved one who recently passed away, below is a simple “to do” list that lays out steps you should take in preparation for your initial meeting with an estate planning attorney. Please realize that this list is not exhaustive! Rather, it is intended to help you gather necessary materials and take actions that may enable you and the estate administration attorney to streamline the estate administration process.

  • Cancel any club memberships in the decedent’s name.
  • Prepare a list of all assets owned by the decedent and indicate whether those assets were held in the decedent’s sole name, in the name of the decedent’s revocable trust (if applicable), or held jointly with another person.
  • Determine whether the decedent had any safe deposit boxes and, if so, prepare an

Who Can You Trust?

Who Can You Trust?

October 11, 2011

Authored by: Stephanie Moll and Mary McMath

As Luke Lantta recently wrote in our sister-blog, bryancavefiduciarylitigation.com, “A power of attorney in the wrong hands can be a dangerous thing, undoing years of asset protection and estate planning.  The rise in estate litigation concerning powers of attorney and increased media attention on elder abuse and exploitation have revealed powers of attorney to be potential ‘vehicles for fraud.’  The danger lies in the sweeping power afforded to the agent under a power of attorney.”

A Power of Attorney for financial purposes designates an attorney-in-fact to act on your behalf in all financial, tax, legal, investment, and insurance matters (these powers can be limited as you feel appropriate).  In most states, powers of attorney can become effective (1) upon a certain date; (2) only  if you are declared incapacitated and no longer able to make decisions for yourself relating to your financial matters; or (3) immediately upon execution of the power of attorney.  As the principal under

GRAT Planning in a Down Market

GRAT Planning in a Down Market

September 30, 2011

Authored by: Justin Flach and Doug Stanley

As I walked into the office, I noticed that the market was already down 100 points today.  It’s been doing that a lot lately.  And then it goes back up a little.  And then back down.   While the market is busy doing gymnastics and we’re all concerned about our portfolios and retirement plans, the one thing that shouldn’t get lost in the haze of bad economic news is that now is a great time to do some estate planning.

Setting aside taxable gifts for the moment, let’s focus on a strategy that works best when assets have a built in potential to increase in value and interest rates are low: the grantor retained annuity trust, or a GRAT.

At its most basic level, a GRAT works like this: you give

Advance Directives, Preparing for Your Incapacity

A doctor must obtain informed consent from you before providing medical care or performing any type of medical treatment. If you are unable to communicate your wishes, state laws determine with whom the doctor should consult regarding these decisions and the decisions would be made with the medical preferences of the family member(s) and the doctor. However, you can direct who should make these decisions and establish your preference with an advance directive for healthcare.

An advance directive is a document authorized by state law that combines a living will with a healthcare power of attorney. This document is typically referred to as an advance directive because it allows you to provide your directions in advance of your incapacity, but the exact name of the document will vary from state to state. Most people have heard of a living will, which allows you to state end-of-life treatment preferences when you

How Reproductive Technology Can Affect Your Estate Plan in Unforeseen Ways

On August 29, 2011, the 8th U.S. Circuit Court of Appeals in St. Louis held that an eight-year-old Iowa girl born two years after her father died is not eligible to receive his Social Security benefits.   If your grandmother, like mine, would have thought it was fishy that a child was born less than nine months after a wedding, imagine her reaction to learning that a child was born two years after the father’s death!

But with the use of assisted reproductive technology, like in vitro fertilization and artificial insemination, it IS now possible for a baby to be born more than 9 months after a parent dies. The use of assisted reproductive technology means that, if a parent preserves his or her genetic material (his sperm, her eggs, or their

Intentionally Defective Irrevocable Trusts: A Great Way to Transfer Wealth, Especially In Low Interest Rate Environments

The current low interest rate environment provides excellent opportunities to transfer wealth to family members.   One approach commonly used to accomplish this goal is to sell assets to an intentionally defective irrevocable trust (“IDIT”).  An IDIT is an irrevocable trust for the benefit of someone other than the creator of the trust (the “Settlor”), perhaps Settlor’s descendants.  However, the “intentionally defective” component of the IDIT means that, for income tax purposes, the assets in the trust will continue to be treated as owned by Settlor.  Thus, Settlor’s sale of assets to the IDIT will not result in income tax consequences.   Additionally, Settlor’s payment of income taxes on the income earned by the IDIT provides an additional means of reducing Settlor’s taxable estate, while allowing the benefits of the income earned by the IDIT to benefit Settlor’s descendants.

Typically, Settlor will take back a promissory note for the assets

Why Do I need a Trust?

August 24, 2011

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Why Do I need a Trust?

August 24, 2011

Authored by: alan-singer

In light of the increase in the estate tax exemption to $5,000,000, several clients of mine asked why they need a Revocable Trust if they don’t need advanced tax planning (at least in their minds).   The following discusses some of the reasons for doing so.

What is a Revocable Trust?

A Revocable Trust (also known as a “living trust” or an “inter-vivos trust”), is a legal arrangement in which the creator (referred to as a “grantor” or “settlor”) transfers, during life, all (or part) of his or her assets to a Trustee to be managed and administered pursuant to the terms designated in the trust until fully distributed to the beneficiary or beneficiaries.

Estate Planning for Digital Assets

What are digital assets? Generally speaking, “digital assets” are any type of data in which a person has some right or proprietary interest.  A person’s digital assets may include (but are not limited to) information in his or her email accounts, information saved on his or her Smartphones, his or her computer files, picture files, video files, music files, social networking accounts, blogs, websites, word processing documents, and spreadsheets. 

Do digital assets have value?  Many digital assets have value.  Like tangible assets, digital assets can have monetary value (for example, blogs that generate revenue, or intellectual property rights, which – in some cases – may be extremely valuable), or sentimental value (family photos or video files, for example).  For this reason, it is important to establish a plan for what should happen to your digital assets in the event of your death or incapacity.  It may be necessary to access the digital