A will is a legal document that you create to determine who gets your property when you die. It can also determine who will look after your children and who will administer or manage your estate after your death.

A will is one of the most important documents that an adult will sign in their lifetime. However, statistics show that over 70% of American adults do not have a will. WillsOnline.Net was designed to remove the hassles from creating a simple will. This site can be used to create a simple will (at a discounted price) and to learn more about wills in general. WillsOnline.Net is fully backed by Kaila Bagwell, LLP, a Georgia-based law firm, so if after going through our online will creation questionnaire (but before you pay for your will), you believe that your situation is more complex, feel free to call our office at (770)238-8392. To begin creating your will, click here.

Typically, in a will there are four types of gifts that you can leave: specific gifts, demonstrative gifts, general gifts and residuary gifts.

Specific gifts are optional. They are used to leave a specific object to someone or to forgive a specific debt that someone owes you. Specific gifts are always made from an estate before general gifts are made. Some examples of specific gifts might be:

"I leave to my son Jack my 1965 Ford Mustang."

or

"To my business partner Bob, I forgive the $15,000 he owes me for paying for his daughter's college tuition."

Demonstrative gifts are optional. They are used to give someone a monetary amount gift from a specific account or fund. Some examples might be:

"I leave $10,000 worth of my IBM stock to Sam."

or

"I leave $500 from my checking account to my brother Jack."

General gifts are optional in Georgia. General gifts leave a monetary amount but do not specify the account or fund from which it is to be paid. An example might be:

"I leave my wife Tamara $1500."

Residuary gifts leave a percentage of the all that remains in the estate after specific, demonstrative and general gifts are made. The people who receive residuary gifts are usually called "principal heirs" or "residuary beneficiaries" and often end up receiving the bulk of the estate once the smaller gifts are made. At least one principal heir is required in all wills. A residuary gift clause may read as follows:

"The rest of my estate, I leave to my wife, Laura."

The personal representative you appoint in your will, also known as the "Executor," will be responsible for making sure your wishes are carried out as you plan.

It's important to remember that there are certain types of property that your will typically will not control. These types of property usually have beneficiaries named in their internal documentation and naming a conflicting beneficiary in your will usually has no effect. Some common types of property that fall into this category include:

• Real-Estate held in Joint Tenancy or Community Property - If the deed to your property indicates that you hold the property in "Joint Tenancy" or "Community Property," this usually indicates that you hold the property with somebody else who has an identical share in the property as you. This type of real-estate will typically contain a "Right of Survivorship" which means that the property passes to the other party who holds the property with you upon your death, and not through your estate.
  
• Life Insurance Policy - The proceeds from a life insurance policy will go directly to the beneficiary named in the policy, and not through your estate.
  
• 401K/IRA Accounts - Many people designate a beneficiary directly in their retirement plans. In this case, the proceeds from these plans will go directly to those beneficiaries upon death.
  
  

One of the most important aspects of a will for an individual with minor children is naming a guardian to look after their children. If there are two parents and one parent dies, the general rule is that the other parent will remain responsible for the child. However, if there is only one parent, if both parents die at the same time (e.g., in an automobile accident together), or if a parent has re-married, complications may arise. If a guardian is not named in your will, the court will decide who takes custody of your children.

If you have a spouse who is legally the mother or father of your child, it's usually simplest to appoint them as legal guardian upon your death. If you choose to appoint somebody else as legal guardian, the court will usually balance your wishes with the best interest of the child. This is often the case when a parent re-marries and wishes that their new spouse take care of their child from a previous marriage. In cases like these, it is always a good idea to explain why your appointed guardian is the best option for the child in your will.

Typically a guardian is responsible for the child's health, education and all of the child's daily needs. They are also responsible for the child's property unless a testamentary trust has been created.

It is important to remember that upon death, a person's property is first used to pay for probate, then for funeral expenses, then to pay off his or her debts, and finally to make specific and general gifts from their estate. All outstanding debts such as credit card balances must generally be paid before gifts are given to your heirs.

One major exception to the rule above is the "secured debt exception." Property that is used to secure a debt (such as home or auto loans) may pass through an estate subject to that debt. So for example, let's say you own a home worth $200,000 with an outstanding mortgage of $150,000. You may leave that home to someone through your will, but it will now be that person's responsibility to pay off the $150,000 mortgage.

Generally speaking, people cannot inherit your debts. If you owe more than the value of the property that you have, all of your property will be liquidated by the court and the proceeds will be used to pay off as much of your debt as possible. None of your heirs will inherit anything, but they will not inherit your outstanding debt. For example, if you have a credit card balance of $80,000 and your cash and property is worth a grand total of $50,000, the court will liquidate your property and pay $50,000 to your creditors. The remaining $30,000 balance owed to your creditors will not pass to your heirs.

It is generally in the Executor's power to decide which property is sold off to cover outstanding debts. This can be a sticky issue sometimes when there are multiple heirs who all want their share of the estate.

If you are leaving property to a minor child, you may want to consider leaving it in a Testamentary Trust. This type of trust is used to hold property for the benefit of another. For example, if you have a 10-year-old son, you may leave property "in trust" for him until he reaches a certain age. Before he reaches that age, you can have someone appointed to manage or take care of the property in the trust.

The person who takes care of the property in the trust is called the "trustee" and your child is referred to as the "beneficiary" of the trust. The trustee must act in the best interest of the beneficiary. Most often the trustee is the same person that you name to be guardian of the child, but this does not have to be the case.

The laws of each state set forth the formal requirements for a legal will. Often these rules are older in nature but they must be followed strictly to create a valid Last Will and Testament. In Georgia:

• You, the maker of the will (called the testator), must be at least 14 years old.
• You must be of sufficient mind and memory to realize you are making a will disposing of your property.
• The will must be in writing.
• The will must be executed (signed) by the testator and witnessed by at least two witnesses. These witnesses should not be persons who are designated to take property under your will.

You are able to amend or revoke your will at any time provided that you follow a few very important rules. There are typically two different ways to amend your will. The first is to write an addition to the will (normally called a codicil). The second way is to write an entirely new will that revokes and replaces your previous will. Because a codicil requires the same formalities as a normal will, it's often easier to just re-write a new will.

Make sure that you don't write on your will after it has been witnessed and signed. Doing something like crossing out a name on a will that has been signed and witnessed may cause objections to the will or lead to an expensive hearing at which the will or parts of it may be found invalid.

If you want to simply revoke your will without creating a new will, simply intentionally tear it up or burn it. If you accidentally tear up your will, it will not be revoked.

As a general rule, you cannot revive an old will once it has been revoked. There are certain circumstances in Georgia where this is not completely true, but the safest way to approach this area of law is to understand that once your will has been revoked, you should draft a new one (even if it's the same as the old one).

There are three things that can instantly change the will you created. These three things are: (1) getting married; (2) getting divorced; and (3) having or adopting children.

If you decide to get married after writing your will, your will automatically changes to give your new spouse a share of your estate. Your new spouse will be granted the same share as if you never wrote a will in the first place (see above). This rule does not apply if you have a prenuptial agreement or if you specifically wrote in your will that you intended not to mention your prospective spouse.

If you get divorced after you write your will, your ex-spouse is automatically deleted from his or her share of the will. However, you should not rely on this and should rewrite your will. Otherwise your ex-spouse may contest the will, costing your estate a lot of money to defend.

If you have a child after making your will and do not rewrite it, the child gets a share of your estate as if the will were never written in the first place.

Some estates can be subject to Federal Estate Tax.

The Federal Estate Tax generally runs between 15% and 55%. There is an exemption for this tax if your estate is worth less than a certain amount. In 2007, this amount was $2,000,000, and it continues to rise anually.

• 2008 - $2,000,000
• 2009 - $3,500,000
• 2010 - Unlimited

The status of Estate Tax is uncertain. Under our current set of laws, Estate Tax is scheduled to be repealed in 2010. However, if no legislative action is taken, it will re-instate itself in 2011.

If you are married and your combined estates exceed the Federal Estate Tax exemption, then a Credit Shelter Trust can help you reduce your Estate Tax Liability. In effect, each spouse used their Estate Tax Exemption to effectively double the exemption amount.

For example, consider a married couple with $2,500,000 worth of assets who wish to leave their assets to each other upon death. When the first spouse dies, his/her assets pass to their spouse Estate Tax free. However, this leaves the surviving spouses estate valued at $2,500,000. When the surviving spouse dies, their estate is now subject to Estate Tax (for the $500,000 above the exemption).

Now, let's look at this example another way. If when the first spouse died, he/she created a Credit Shelter Trust which is used to hold his/her $1,250,000 worth of assets, this would allow for the surviving spouse to use the assets of the deceased spouse during the surviving spouse's lifetime, but without actually adding the assets to the surviving spouse's estate. When the surviving spouse dies, the initial spouse's assets are transferred to his/her heirs (usually the children), and the surviving spouse's assets ($1,250,000 - below the Estate Tax exemption) now pass without being subject to Estate Tax.

Because of the uncertainty of the future of Estate Tax, it's usually a smart move to make the Credit Shelter Trust a discretionary trust. The way this works is that the surviving spouse is given the right to decline any testamentary gift. When he/she declines that gift, it is placed in the Credit Shelter Trust. So if at the time of death there is no Estate Tax, the surviving spouse can take the gift tax free. However, if state tax has been reinstated at that time, the surviving spouse can decline the gift, thus allowing it to fall to the Credit Shelter trust which is to be used by the surviving spouse during his/her life and the beneficiaries thereafter.

Wills are not only for the well-to-do, they are important for all adults who are interested in ensuring that their wishes are respected upon death, and that their estates pass to their loved ones as quickly, as painlessly and as intact as possible. Wills are a component of successful estate planning, which seeks to transfer the individual’s estate as she would have desired, avoid unnecessary costs and tears and minimize estate taxes. Please click here or call us at (770)238-8392 to get started with a free consultation.

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