You will often hear the term “Basic Estate Plan.” The Basic Estate Plan is the foundation of the proper estate plan that every adult needs. As the value of your estate or the complexities of your family increase, you may need to build additional tools into your estate plan, but regardless of how wealthy you are or how big your family is, your estate plan starts with the Basic Estate Plan.
In Georgia, a Basic Estate Plan typically consists of three documents: (1) a Will, (2) a Medical Directive, and (3) a Financial Power of Attorney.
(1) Last Will and Testament
The Last Will and Testament is the brain of your estate plan. It controls the disposition of all of the property that you own (in your name) at the time of your death. Many estate plans (especially in states other than Georgia) may combine a basic Will with a Revocable Trust. The purpose of the Revocable Trust is usually to avoid the probate process, which is the process (through the Probate Courts in Georgia) that your Will has to go through to transfer your property. In Georgia, the probate process is relatively easy (some say it is the easiest!) and Revocable Trusts are not as common. Revocable Trusts can be useful in Georgia for out of state real estate and other unique situations, but for the most part, a basic Will is all you need in Georgia. There are different types of Wills and you should always consult an attorney to see what Will structure fits your estate best.
(2) Medical Directive
A medical directive is a basic document that allows a close friend or loved one to step in and make medical decisions for you in the event that you become incapacitated and unable to make the decisions for yourself while living. As soon as you regain capacity, then you go back to making decisions for yourself. But, while you are out, you need somebody to help you out.
In 2007, the State of Georgia adopted the “Georgia Advance Directive for Health Care” as the official medical directive for Georgia residents. Prior to 2007, Georgia residents executed two documents: a Living Will and a Health Care Power of Attorney. The Living Will allowed you to make “life support decisions” for yourself. The Health Care Power of Attorney appointed someone to make additional decisions for you beyond the “life support decision.”
The Georgia Advance Directive for Health Care pulled the Living Will and Health Care Power of Attorney into one document and provided additional up-to-date provisions such as clauses for the release of medical records under the new HIPPA laws. The form is also more standardized and similar to forms that other states are adopting. Many states are even beginning to push towards electronic databases that centralize the Medical Directives of its residents. The purpose is to make it easier for health care providers to contact your medical agents in the case of emergency and more readily access your medical wishes if needed.
If you executed the Living Will and Health Care Power of Attorney prior to 2007, those documents are still valid, but it may be a good idea to update and stay current with some of the recent developments with Medical Directives.
(3) Power of attorney
Similar to the Medical Directive, a Power of Attorney is a basic document that allows a close friend or loved one to step in and make financial-type decisions for you in the event that you become incapacitated and unable to make the decisions for yourself while living. In 2017, Georgia law updated to make a Power of Attorney more enforceable. Powers of Attorney executed prior to 2017 are still valid, but they lack the updated enforce-ability standards, which could render your family helpless.
Under a Power of Attorney, your agent can do things such as pay your bills, make financial arrangements for medical care, continue the operation of your business or sell your property, or transfer your money as may be needed to satisfy the needs of you or your family.
If you are the owner of a business, you may want to create a separate Business Power of Attorney. You may want a business partner to have authority to run your business but prefer that a family member handle the more sensitive personal matters. Or, you may be able to appoint one person to handle both; but again, you should always consult an attorney to identify the documents that are best for your individual basic estate plan.
Patrick R. Norris, Norris Legal Atlanta Law Group, LLC
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