Preparing for the end of one’s life is something we all know that we should do, however according to AARP, the majority of Americans stop there. According to the study, which relies on a survey from caring.com, only 4 in 10 American adults have made good on the task and have any type of estate planning document. As is the case in most states, Georgia residents who die without a will, or intestate, rely on the states distribution scheme to disperse their assets to surviving loved ones.
Many individuals may think that because such a plan exists with the state that they are off the hook, or that their affairs are adequately taken care of. What may be surprising to residents in Georgia is that the laws governing intestate succession may not be what most of us would logically think would happen. What’s more, these guidelines don’t necessarily fulfill what the majority of citizens would prefer, especially when it comes to their surviving spouses.
Before you concern yourself with who will get what if you die without recording a will, you need to know which assets will be affected. These assets are referred to as probate property, and few know that it doesn’t apply to the entirety of their net worth. Real property and bank accounts held solely in the name of the deceased individual are considered probate property, but there are many other accounts that are not.
These include things such as life insurance proceeds, funds in IRA’s, 401k’s, co-owned property, and joint bank accounts. The inheritances of these assets are controlled by beneficiary designations within the account or payable on death clauses among joint owned accounts. This is important to note because while significant portions of wealth for the average individual is tied to retirement accounts controlled outside of probate, the home is often times just as significant an asset in terms of an individual’s net worth, and it must go through probate in the absence of a trust.
Armed with a working knowledge of which assets the state will ultimately disperse to your loved ones, you can think about how they will divide these assets up. Because all families will vary to the extent of living relatives such as spouses, children, parents, and siblings, there exists a table that determines the degree of relation called the Table of Consanguinity.
This table effectively rates the order in which your assets will be dispersed. It goes all the way to third cousins if no heirs can be found, but the general order in which relatives will inherit is: spouse, children, parents, siblings, and then grandparents. The first in line takes to the exclusion of all others, meaning that if there are living children, they inherit all assets before the parents get a penny. In most states, all assets go directly to the spouse first. In Georgia this is also true if the deceased has no children, but deviations occur from here. Below lays out a few of the more common scenarios with how intestate assets are distributed in Georgia.
- Survived by a spouse with no children – all assets are inherited by the surviving spouse.
- Survived by children with no spouse – all children inherit equal shares, per stirpes, of the assets.
- Survived by a spouse AND children – Spouse and children inherit equally as if the spouse was one of the deceased children. There exists a qualifier here that the surviving spouse will receive no less than one third of the estate. This means that up to two children, the spouse and children receive the same share, but if three children exist, their share is reduced to the extent that the surviving spouse takes a one third share.
- Not survived by a spouse OR children – If there exist no living spouse or children at the time of death, all decedents assets go to grandchildren in the shares that their parents would have inherited. If no grandchildren exist, then the decedent’s parents inherit the assets. Should the parent’s also be deceased, then any siblings would take in equal shares.
While the Table of Consanguinity and the per stirpes scheme of distribution seem logical, the hang-up for many is the distribution given to a surviving spouse with children. Many hope to give all assets to their surviving spouse in the hopes that those same assets go to the children after the spouse’s death. This is to ensure that he/she was provided for during the rest of their lifetime. If you are a resident of Georgia and this distribution scheme is something that you wish to avoid, you absolutely MUST execute a will or the state scheme will control the transfer of your assets.
If you have questions regarding a Last Will and Testament or what probate instrument is right for you, let us help! Thrift & McLemore’s attorneys have assisted numerous Georgians develop estate plans specific to their goals. Contact Thrift & McLemore by email at [email protected] or by phone at 678-671-4031 to discuss how we can help you and your family set your affairs in order today.