Estate planning is not a one-and-done thing. It is a lifelong process. Getting your affairs in order is a big step, but reviewing your estate plan regularly is the next step in estate planning. There are life events that may take place in your life that can drastically impact your estate plan. So, it is important to review your plan— we recommend annually— to make sure it still says exactly what you want.
Today we’ll take a look at some of the life events that impact your Georgia estate plan.
Marriage
Marriage is such a wonderful and exciting adventure. When two people marry, the state of Georgia makes some assumptions about these people and their estates. That’s why it’s important to update your estate plan after your marriage. The assumptions made by the state of Georgia may be exactly what you would want, but it is important to make those wishes clearly known— so no liberties are taken.
If you don’t update your plan, the state of Georgia assumes you meant to but forgot and will execute your estate as if you intended to leave no less than one third (⅓) of your estate to your spouse. But perhaps you wanted to leave it all to your new spouse, or maybe you only wanted to leave the residence to your spouse? The state doesn’t know, they just assume.
This is why we always recommend updating your estate plan after a marriage.
Divorce
Just like in the event of a marriage, the state of Georgia will make some assumptions in the case of a divorce. We never like the state assuming anything about our estate. We want them to know exactly what we intend with our estate. So, we need to update our estate plan to reflect these intentions.
In the state of Georgia, if a divorce takes place, the Court assumes, again, that you meant to update your estate plan but forgot. They assume that you intended to completely remove your former spouse as a beneficiary or agent of your estate, and they essentially write them out of the Will. This may be exactly your intention. But we never want the state to guess at your intention. Perhaps you and your former spouse ended things amicably and you did want them to receive assets, or maybe you do want your former spouse to be the executor of your Will or trustee of your Trust because the children you had together are minors and the only beneficiaries?
Again, we never want to Court to assume anything on your behalf. So, a divorce will affect your estate plan, thus the need to update it.
Births/Adoptions
Births and adoptions are also wonderful, amazing, exhausting adventures. And I know what you’re thinking, “I just had a baby. I am bone tired. I don’t have the mental capacity to think about this right now.” And truthfully, this is a maybe update scenario. It all depends on how your previous plan was written.
If your previous plan was written to include any future children in the distribution of assets, and you intend for all of your children (or grandchildren) to receive an equal portion of the assets, you probably don’t need to update the plan. If your previous plan did not leave room for future children (or grandchildren) to receive a portion of the estate, but you want them to, you guessed it: you need to update the plan. And if you intend to disinherit a child (or grandchild) and that is not clearly outlined in the plan, you need to update your estate plan.
The state of Georgia assumes, when it comes to children, that you forgot or never got around to including them in your plan. Additionally, in the instance of blended families, you must specifically name any stepchildren as beneficiaries if you want them to receive an inheritance. The state of Georgia does not recognize stepchildren as heirs.
Click here to download my Planning to Protect Your Children estate planning guide.
Deaths
If anyone named in your estate plan passes away, this begins a chain of events that will unfold after your death. For instance, if the executor of your estate dies before you, the next alternate in line, also known as a successor, becomes the executor. Maybe you named this alternate thinking it would never get to them? Maybe you’ve moved and this person lives far away now? Or maybe your relationship has changed, and you no longer want this person acting on your behalf? Any of these may be true even if someone hasn’t passed away, but it’s important to know that the death of someone named in your plan changes things.
This is also true if a beneficiary passes before you. Most estate plans have an alternate distribution built into the language. But it’s important to review those distributions to make sure it is still what you want. Often the alternate distribution is to the descendants of the person who passed away. But perhaps you don’t have a relationship with those people. Updating your state plan if a beneficiary has died is important.
Receiving an Inheritance / Growth of Wealth
The last life event we’ll discuss today that can affect your estate plan is the growth of your own wealth. This could mean receiving an inheritance from a loved one who passed away, the sale of a business, or even winning the lottery. If you have a substantial growth in wealth, this can affect your estate plan— mainly because of tax liability.
The state of Georgia does not have estate or inheritance taxes— also referred to interchangeably as “death taxes”. Keep in mind estate taxes and inheritance taxes are not the same. Estate taxes are taxes assessed to and paid by your estate. Inheritance taxes are assessed to and paid by your beneficiary. In the state of Georgia, your estate is not liable for estate taxes unless your estate is valued at or above the federal tax liability threshold. The same is true for inheritance taxes for beneficiaries living in Georgia.
The current approximate estate tax limit is just over $13 million. While the approximate inheritance tax limit is just over $14 million. Do keep in mind that these limits may sunset back to their original values, plus inflation, in 2026 if the government does not intervene.
So, if your estate was valued at less than the federal limit, but then receives an influx of cash bringing it above the federal limit, it will incur estate taxes. There are ways to mitigate this tax liability though. This is why it’s important to consult professionals such as financial advisors and estate planning attorneys.
We are here to help you process and execute the best estate planning tools for your estate and legacy. We love helping people create an estate plan that is as hassle and conflict free as possible for their loved ones— giving them peace of mind for the future. Call us at (404) 736-6066 or visit our website to schedule a consultation.
