Living through the death of a loved one is a tragic experience that most people will have to endure at some point in their lives. Unfortunately, in many instances family members are forced to deal with stark financial realities while they are in the midst of their grieving. The process of estate administration and handling finances after a death can present many questions and issues that are unfamiliar to the average citizen.
One of the first issues that must be confronted is “What should I do with the deceased person’s assets?” If the deceased person (the “decedent”) took the responsible step of executing a will during his or her lifetime, the Executor must file the original copy of the will with the Probate Court of the county where the decedent lived at the time of his or her death. In the typical un-contested will situation, the Court will then issue a document called the Letters Testamentary to the Executor giving him or her legal power to handle the decedent’s debts and assets and make all necessary transfers to carry out the will. The Executor will then pay the estate’s debts and issue the remaining assets to the beneficiaries of the will.
Another question which must be answered is: “What assets are subject to distribution under the will?” The assets of the decedent’s probate estate include all real estate, personal property (cars, clothing, furniture, etc.), and monetary assets that the decedent owned at the time of death. The Executor must identify all such assets and distribute them according to the provisions of the will; however, before the Executor can make any distributions to the beneficiaries, he or she should contact potential creditors of the decedent and satisfy any legitimate debts that are subsequently claimed against the estate.
Conversely, there are some valuable assets that are not included in the decedent’s probate estate. Life insurance benefits, 401k benefits, and other insurance or retirement benefits are governed by contract law rather than probate law, and thus they are not usually included in a probate estate. These types of assets are beneficial to survivors because they pass directly to the named beneficiaries outside the probate process and are not usually subject to claims of the decedent’s creditors. Therefore, it is crucial for people to ensure that they have named beneficiaries and successor beneficiaries for the accounts because if no such beneficiary is identified by the decedent prior to his or her death, then the money will be paid over to the probate estate assets and become subject to creditor(s) claims.
I recently executed a will for a young client who was facing a terminal illness. He passed away shortly thereafter, leaving behind nearly a million dollars of medical debts and a scared, grief-stricken wife. This unfortunate, but not entirely uncommon, situation left the wife asking a very important question: “Can I be held personally liable for the individual debts of my spouse, such as medical bills, car loans, or private student loans?” Fortunately, Georgia is not a “community property state”, so you will not be liable for your deceased spouse’s separate debts or liabilities unless you co-signed for them. Also, if a decedent had federal student loans, they will be completely discharged and cancelled upon death.
Families also need to be aware that Georgia law offers protection for a decedent’s surviving spouse and minor children through an optional distribution called “Year’s Support”. Qualifying family members are entitled to petition the Court for a ‘Year’s Support’ by which they can request the court to set aside money and/or property from the decedent’s estate’s unencumbered assets for support and maintenance for a period of twelve months from the date of the decedent’s death. The benefit of petitioning for a Year’s Support is that any Year’s Support assets will be the first priority issued out of the estate assets. Effectively, this means that this money and property can be set aside for the family first and would be safe from any unsecured creditor’s claims against the estate.
It is important for all citizens to understand the legal process involving a death and their rights and responsibilities regarding a decedent’s assets and liabilities. Georgia laws offer protection for surviving loved ones through Year’s Support distributions and spousal liability limitations, and these rules can be crucial to support families during such unfortunate times. However, there can be many complexities to the general rules discussed in this article, making effective legal counsel essential for all families to properly prepare for the future and deal with a loss.
Kristyn Atkinson is an associate attorney at Flint, Connolly & Walker, LLP. Kristyn grew up in Cherokee County, Georgia and earned her law degree at the University of Georgia School of Law. She graduated with highest honors from the Georgia Institute of Technology with a Bachelor of Science in Business Administration.