Family members and other beneficiaries or heirs often take some comfort in inheriting from an estate. Individuals planning for the future often go to great lengths to leave the resources that their loved ones may require along with assets that may have emotional value to the people closest to them.
Most adults who engage in estate planning aspire to leave as much to their close loved ones as possible. Unfortunately, it is quite common for issues during the probate process to diminish the legacy that one person leaves for others. If an estate plan doesn’t include asset protection plans, the legacy of the testator could be vulnerable. For example, the three probate issues below can all diminish the overall value of an estate.
Personal debts
The estate of someone who recently died consists of the property that they owned in their own name. Those assets can be worth tens of thousands of dollars or more. The estate also assumes responsibility for the debts owed by the decedent. Paying those debts is a top priority during estate administration. Family members and other beneficiaries only inherit what is left over after fulfilling financial obligations.
Tax responsibilities
There are several kinds of taxes that may require payment using estate resources. The estate has to cover any outstanding income taxes owed by the decedent as well as any income tax obligations generated by the sale of estate property. If the estate is worth millions of dollars, there might also be estate taxes due. Technically, Georgia does not assess an estate tax. However, the federal government does. As of 2024, estates worth more than $13.61 million are subject to federal estate taxes. Tax obligations take priority over the inheritance of beneficiaries or heirs.
Probate conflicts
Probate costs are among the debts that the estate has to cover. In cases where significant disputes among beneficiaries arise, those probate debts can become relatively sizable. If family members dispute the validity of a will or take legal action to remove a personal representative from their position, their actions can significantly diminish the overall value of the estate. Covering the cost of probate litigation and estate administration takes precedence over distributing assets to beneficiaries.
A thorough estate plan can help protect assets, minimize tax obligations and reduce the likelihood of family members fighting over the estate at issue. Asset protection planning can be as important as establishing a basic will. The choice to plan ahead of time can help limit resources lost to probate expenses and other financial obligations.
