Estate Planning 101: Your Guide to Estate Tax in Georgia

estate tax in Georgia

Planning your estate is more than just determining who gets what asset; you must also consider any applicable taxes. There is no estate tax in Georgia, but there are other applicable taxes, such as federal estate taxes, that your heirs may be subject to when you pass away.

If you already have an estate plan or need help organizing your estate to benefit you and your family’s legacy in the long run, you came to the right place. This brief estate tax guide will cover all you need to know about estate taxes and who you can reach out to for more guidance.

What Is Estate Tax?

The estate tax is a tax levied by the government and some local governments on the estate of a recently deceased individual. The estate tax is sometimes called the “death tax,” and it is applied before the beneficiaries inherit the money.

Estate tax often gets confused with inheritance tax, but the two are very different from one another. Inheritance taxes apply to the beneficiaries after receiving the money from the deceased’s estate.

Georgia Estate Tax and Inheritance Tax

As of right now, there is no estate tax in Georgia. Of course, laws that affect your taxes can change in later years, but as of 2022, there is no estate tax in Georgia. There also isn’t an inheritance tax.

Under the Georgia inheritance law, your beneficiary won’t have to pay taxes when they receive their inheritance from you. Your beneficiary may have to pay taxes on certain retirement accounts inherited from you because they are subject to income tax as the assets are taken out from the account.

What Is Georgia Inheritance Law?

In Georgia, inheritance law determines the distribution of property when an individual passes away. This law dictates who will acquire the deceased’s property and how they will receive said possessions.

Georgia Inheritance Laws Basics

We can divide Georgia inheritance laws into two sections: intestate and testate. Both of these involve the allocation of assets, but they differ in whether the deceased left a will behind and how said assets get distributed.

The inheritance process for Georgia residents who die with a valid will is considered testates. In order for the will to be valid, the will must have the signature of the deceased and two witnesses.

The two witnesses can’t just be anyone; the two must be familiar with the property listed in the will. The court will follow the deceased’s final wishes as outlined in the will so long as those requirements are met.

Valid wills have an executor chosen to handle the distribution of the estate’s assets to the proper beneficiaries. Once the judge approves the executor over the estate, they are solely accountable for dealing with the estate’s liabilities, debts, and the submission to the Georgia probate court.

What Is Probate?

Georgia probate is the legal process of identifying and carrying out inheritance according to the will or through court proceedings. Under Georgia law, there are common form probates or solemn form probates.

With solemn form probate, all possible beneficiaries must be notified and provided with an official copy of the will. Common form probates remove that requirement, but if the beneficiaries wish to have a copy of the will, they can initiate a request.

Common form probate is preferred when there are no issues with the will. If there is a chance that someone may contest the will, solemn form probate may be a better option.

If the will does get contested, the court will set a deadline for those who challenge the will to take action. They will need to present information to back up their reason for contesting the will during that time.

What Happens if There Is No Will?

If someone passes away without a will, three possible proceedings can take place. Permanent Administration requires that the spouse becomes the estate administration unless they decline or are disqualified. All heirs to the estate must also receive a notice of the said decision.

Temporary Administration

Under temporary administration, it is not required to notify heirs, but they can choose an administration of the state. Disbursement of expenditures cannot be made without a court order.

No Administration Necessary

If the estate’s debts are all paid, and the heirs agree on the distribution of the assets and property of the estate, then it is best to use the no administration necessary form. So long as there are no possible chances of a dispute, there is no need for administration.

Inheritance Laws When There Is No Will

Intestate is when a person dies without a valid will. Even though there is no valid will, the inheritance still needs to go to a relative. To handle the inheritance from an intestate, Georgia has intestate succession laws. Under these laws, the court must search for a relative to inherit the estate.

If someone dies without a will, the court will need to determine how to disperse the assets. Priority is always given to the surviving spouse and children.

If there is no surviving spouse or a living child, other relatives will be considered. Grandchildren, parents, siblings, nephews and nieces, and more down the line are considered to inherit the property.

Georgia’s probate court does not handle the management of estates, so they must elect an executor. Since there is no will, the court will need to pick an executor who they find mentally competent and part of the family.

To avoid all of that confusion and hassle, it is best to work with an estate planning lawyer. They can put in the time to create a comprehensive will for your estate.

Should I Hire an Estate Planning Attorney?

If you have a complex estate, it is best to reach out to an estate planning attorney as soon as possible. These attorneys are trained in creating plans and drafting documents that will best protect your last wishes.

What Does an Estate Planning Attorney Do?

In addition to planning for life after your death, an estate attorney can also prepare you for situations where you can’t care for yourself and your assets. Certain attorneys specialize in elder laws.

Other things an estate planning attorney can do:

  • Make a plan for charitable giving
  • Transfer assets and oversee trust transfers and administration
  • Write a living will
  • Appoint guardians for your children

These attorneys can help you plan for unexpected situations. For example, they can create a plan to pass the assets to another listed person in the event that your listed beneficiary passes away unexpectedly.

When Should I Hire an Estate Attorney?

There are many reasons to hire an estate attorney besides planning who will receive your assets when you pass away. If you’re a business partner or a small business owner who needs help with business succession planning, you can benefit from working with an estate lawyer. They will ensure that your estate plans accurately state your intentions.

Other reasons to partner with an estate attorney:

  • You have foreign assets or properties
  • You have out of state assets or property
  • You have a blended family
  • You have family members with special needs
  • You want to protect your estate from Medicaid

If you need asset protection from lawsuits and creditors or you are worried about estate taxes, you may need to set up an irrevocable trust. Once you create an irrevocable trust, you can’t change or close it. Ensure that you reach out to an estate attorney to see if that option is best for you.

How to Reduce Federal Estate Tax Liability

Although your beneficiaries may have to pay federal taxes on your estate, there are ways to reduce your tax liability. For example, you can set up an irrevocable life insurance trust fund. Your beneficiaries will only have to pay income taxes on their portion, but they won’t have to pay taxes on the trust itself.

Make Charitable Donations

As mentioned earlier, when you work with an estate planning attorney, they can set up your trust to make charitable donations. You can either opt for a charitable remainder trust or a charitable lead trust.

Charitable Remainder Trusts

Charitable remainder trusts, also known as CRTs, allow you to transfer a stock or some other type of appreciating asset to an irrevocable trust. While you are alive, you can make money from that asset, and when you pass away, the investment income will then go to the charity of your choice.

If you go this route, you will avoid the capital gains tax, which will lower your estate’s federal tax liability. You also get to use this as a tax deduction, further reducing your liability.

Charitable Lead Trusts

With a charitable lead trust (CLT), some of your assets in the trust will go to a nonprofit organization of your choice. When you donate to charity, you lower the value of your estate.

When you reduce the value of your estate, you end up with an additional tax break. Once you pass away, or after a pre-determined time, your listed heirs will receive the remainder of what was in the trust.

How to Find an Estate Planning Attorney

Finding an estate planning attorney may seem daunting, but you can break down the process to make it more manageable. The first step you want to take is to create a list of potential attorneys.

You can do this by getting referrals from family and friends or by conducting a quick Google search. Make sure that you look for an attorney who has expertise in estate law.

Talk to Each Attorney

Once you’ve compiled a list of attorneys to contact, prepare questions before you call. You will want to know your attorney because estate planning is a very serious and personal matter. You will be sharing personal information about plans for the time of your death and about your money.

Questions to ask a potential attorney:

  • How will we contact one another?
  • How long have you been practicing?
  • Are you my main point of contact?
  • Are there any charges not included in the rate?
  • What is your rate?

If you plan on working with a larger law firm, it is essential to know if you will have a direct contact or a team. A paralegal may serve at the point of contact.

Make Your Final Choice

When you finish interviewing potential attorneys or their law firm’s point of contact, be sure to double-check their fees. Make sure that you completely understand everything they are charging you for.

Once you have a good idea of who you want to partner with, make your final choice. If you need more reassurance, you can always check out the company on the Better Business Bureau (BBB) website. If they don’t have a BBB page, you can always check out Yelp and Google for any reviews left by previous clients.

Protect Your Assets Today

Even though there is no current estate tax in Georgia, there is a high chance you will have to pay federal taxes for your estate. Many of the issues associated with handling estates in Georgia are due to poor end-of-life planning.

You have the right to decide who will inherit your assets, and you can start the process of protecting your beneficiaries.

It is best to reach out to a knowledgeable estate planning attorney who stays on top of any future tax changes so they can help you plan. If you are ready to partner with a reputable estate planning law firm to protect you and your family’s legacy, Contact us now!


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