Estate planning can prevent family feuds

Randolph Wade Jr., of Augusta, takes seriously his obligation to his family. The 70-year-old and his wife, Lilly, prepared a will several years ago "to protect the ones that are left behind."

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Jackie Ricciardi/Staff

Randolph Wade Jr., of Augusta, holds a copy of his will. He and his wife, Lilly, want to provide for their children after they are gone.

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"You never know when the end of the road of your life is going to be," Mr. Wade said. "It could happen all of a sudden. I have seen time and time how much chaos there can be if a will is not in place in the proper way.

"Some folks have waited too long, and it's been disaster for their loved ones who were left behind. I want my children to be happy because I left them in good shape."

Mr. Wade has two daughters and a son, and his wife has one daughter. They have combined all of their children in the will and named them executors in a particular order. Planning ahead is especially important for blended families, he said.

Many people fail to do estate planning because they don't want to think about dying, said Judith Becker, a lawyer for Donsbach & King LLC, which focuses on estate planning.

"One of the worst things that we see is people who procrastinate," said her law partner, John Donsbach. "When they procrastinate in this area of planning, it's making problems down the road."

Regardless of the size of the estate, a person should still have a plan, said Aubrey Rhodes, whose law office also focuses on estate planning. There are different options for handling your estate, such as wills and revocable living trusts.

"They don't realize how much of a mess it can be when they pass away," Mr. Rhodes said. "We've been doing nothing but this for 30 years. We've seen a lot of messes. Just huge family fights."

Sibling rivalry is especially an issue when dividing personal property, such as china, silver and jewelry -- it can often cause more fights than the money. He instructs his clients to focus on making sure their family's needs are met, he said.

"We often make them realize that as part of the planning, they may consider something other than a will," he said. "That's been the traditional recommendation, but the will requires probate and tends to allow people to put off things to be handled at death. And that's not a good time to handle things."

THE LAST WILL AND testament is a document for death planning, and doesn't come into authority until a person dies, said Dewitt R. Dent, a local lawyer who has done estate planning since 1974.

When a will exists, the family must go to court to have it probated. While it is the less expensive option, a revocable living trust avoids the need to go to probate court when someone dies, he said.

"The revocable living trust is becoming increasingly more popular," Mr. Dent said. "It's a more comprehensive document that you create while you're alive and well. You actually bring it into existence and transfer all the ownership of your property ... to yourself and your spouse as trustees of your revocable living trust. Now you own everything as a trustee."

When the person dies, the successor can step in and take over the estate the same day, he said.

Mr. Donsbach recommends having a will or revocable trust, or both. Revocable trusts are more common in South Carolina, Ms. Becker said.

"A lot of that has to do with the complexities and cost of the probate process in South Carolina," Mr. Donsbach said.

Ms. Becker said: "The probate process in Georgia is relatively cheap. That's not true in South Carolina. The probate court costs are based on the size of the estate. In Georgia, it's simply a flat fee."

In South Carolina, for estates that approach $1 million, it makes more sense to do revocable trust planning and avoid the probate process altogether, Mr. Donsbach added.

Even if a person gets a revocable trust, Mr. Rhodes said, organization is the key.

"The living trust by itself is just a piece of paper. It's the combination of the right tools with the organization that minimizes the problems and cost for the family at death," he said.

This involves making sure assets are titled according to your wishes and don't involve unnecessary expense or burden at death, he said.

PARENTS SHOULD START plan- ning as soon as they have children, Mr. Rhodes said. They should determine who would rear the children and manage the money, which is sometimes two different people, Ms. Becker added.

"Even young couples have insurance and retirement accounts," Mr. Rhodes said, "so they don't feel like they have much money, but if they both pass away there's going to be money that should be managed by somebody."

Children cannot legally own property, Mr. Donsbach said, so if their parents die without making plans, there becomes a need for guardianships and conservatorships, which are expensive.

Also, if parents don't want their children to receive all of the property at age 18, when they might be too immature to handle it responsibly, parents should plan accordingly, he said.

It's important to seek counsel from a lawyer with experience in estate planning. It's a common misconception that every lawyer can draft a good will. People often don't get asked the right questions, Mr. Donsbach said.

Ninety percent of people with a simple will are not asked how they want to handle their IRA, 401(k) or insurance designations. If not properly handled, they can trigger an income tax issue, he said.

Mr. Donsbach once dealt with a $400,000 estate, of which $300,000 was an IRA. The beneficiary was dead, and the heirs didn't want to spread out the funds over five years.

"It triggered almost an immediate 50 percent tax on the IRA. They had to pay $150,000 in tax because they couldn't agree what to do with it," he said.

Also, a will does not affect the following assets: joint accounts, life insurance beneficiary designations, IRA or 401(k) designations, and jointly titled property, which could include the house, Mr. Donsbach said.

Health care is another topic Mr. Dent discusses with clients.

"Most people are concerned about creating a power of attorney for someone to handle their health care matters," he said. "The state of Georgia now has statutory forms for medical powers of attorney. They're called the durable power of attorney for health care and the advanced directive for health care."

In Georgia, the living will is out of date. Powers of attorney normally "die when the person dies, but these statutory documents survive death to allow your agent to handle funeral arrangements and burial, including disposition of remains," he said.

It's important to review your planning periodically, Mr. Rhodes said.

"Your plan has to be maintained," he said. "Things change. A lot of people have wills that are so old that they're appointing guardians for their children, and their children are grown up and moved away now."

WILLS CAN STIR UP controversy.

In the probate process, you have to invite people who "may not benefit from the document to come in and participate in the legal process," Mr. Rhodes said.

"People don't realize that. These laws were written at a time when maybe it didn't cause that much controversy," he said.

Jennie Hyatt, a lawyer for Glover, Blount & Millians PC, drafts wills and helps to probate wills when people die. If someone dies without a will, called dying intestate, she works to get administrators appointed, she said.

"What happens is, the law takes over at that point and says where your property is going to go and who it goes to," Ms. Hyatt said. "If you don't have a spouse or children, then their property is going to end up going to some distant relative based upon the statutes.

"If you have a specific desire for your property to go someplace, if you don't have a valid will, your desires cannot be considered by the court."

In Georgia, if a will is signed, dated, notarized and witnessed, the court considers it valid and the executor is ordered to follow it, Ms. Hyatt said. The family must attend probate court in the county where the person was a resident when he or she died, Mr. Dent said.

If a person had property in other states, such as a rental or vacation home, the family must attend probate court in these places, too, Mr. Rhodes said.

In Georgia, the average cost for probate court, with or without a will, is about $300. Most of the costs result from attorney's fees, Ms. Hyatt said.

"It could be very easily several thousand dollars if you've got something that's contested," she said. "Either they want to object that it's not a valid will or maybe the deceased was coerced or tricked. It can get very sticky."

Reach LaTina Emerson at (706) 823-3227 or latina.emerson@augustachronicle.com.