Where there’s a will, there’s a way. But without a will, the way can become obstructed by numerous unforeseen circumstances.
All too often, Georgians die intestate. That means they haven’t written a will. Reasons may vary, but if they own property, this practice can lead to sticky situations, especially if future generations also fail to write a will.
The property in this situation is known as heir property. Recent research estimates that up to 10 percent of property in Georgia falls into this category.
Heirs inherit this property in varying degrees depending on their relation to the decedent. For example, a spouse may inherit one-third of the property and the children divide the rest. Or, if there is no spouse or children, parents or siblings may share the property.
Georgia law allows heirs of intestate decedents to forgo the probate process and to share property in an arrangement known as tenancy in common.
Tenancy in common laws allow all heirs to own equal or unequal undivided shares. Each person has an equal right to possess the whole property meaning that each has the right to use, possess, rent, mortgage and farm the property, limited by the right of fellow co-tenants to do the same.
As successively larger generations inherit increasingly smaller shares, not only is the land divided, but so are the hearts and minds of its owners.
Some owners may be living on the land and caring for its upkeep. Others might be living far away but paying the taxes. Some may want to keep the land in the family while others might want to sell the land for their share of the profit.
As the gap between original title owner and heirs grows, it may become increasingly difficult to determine who owns the property. Not only that, but one or more heirs may sell their share to an unrelated party.
Tenancy in common laws allow any co-owner to force a partition sale of the property, which could result in family land being lost to a corporation if family members do not have the money to buy out the company’s share.
Because the title of ownership for the land is unclear, owners have fewer options of how they can use the land.
One problem that became devastatingly apparent after Hurricane Katrina is the inability to receive federal disaster aid. In Louisiana 20,000 families who had been living in family homes for generations were ineligible for FEMA because they could not provide clear title to their property.
A clouded title also hinders owners from borrowing from a financial institution to make improvements, selling timber or agricultural products to companies or leasing or selling the property.
These problems can be avoided or minimized by making sure to write a will for yourself or choosing to follow the probate process if your loved one dies intestate.
A will does not have to be complicated or costly. It could simply state who you are, who will manage your affairs when you die and how you want the things you own distributed. A will should revoke any prior wills you have created and set guardians for your minor children, if any.
A more sophisticated will can shepherd assets for minor children, minimize estate taxes and provide for more structured distribution of assets to your beneficiaries according to your specific instructions.
Probate in Georgia is not as difficult or costly as some other states. Although it may require some time and money, the reward may far outweigh the burden.
Richard Barid and Michael Smith are co-founders of Savannah-based Smith Barid LLC, which specializes in estate planning and special needs planning. They can be reached at 912-352-3999 or richard@smithbarid.com or msmith@smithbarid.com.
By Richard Barid and Michael Smith