Under Georgia law, a gift can be made for a specific purpose without the necessity of a trust. OCGA § 44-5-87. However, if it appears that the expressed purpose of the gift cannot be accomplished, then the law imposes a trust over it, in favor of the grantor. Id.
A case announced yesterday by the Court of Appeals addresses this question about the above law: How do we know when it's clear a gift's purpose can't be accomplished? In Choi v. Immanuel Korean United Methodist Church, the Court of Appeals considered whether a trust should not be imposed over a large donation to a church's building fund, when no building had yet been constructed. 2014 Ga. App. LEXIS 218.
It is a time-honored rule of common law that parties are not usually compensated for emotional loss, and the rule is only overcome by statute, as in cases of severe emotional distress. Likewise, our land title law has so evolved to favor marketable, fee simple title, not family or emotional ties to land.
When it passed the new Uniform Partition of Heirs Property Act, effective June, 2013, the Georgia legislature bucked the common law and enshrined certain "subjective factors" for judges to consider when determining how to partition "heirs property" land.
I will not address the motivation for the new law. It is done better here in the Georgia Bar Journal and here in a College of William and Mary law review article. Suffice it to say, there are millions of acres in the South that are fractionally owned in such a way that the costs of consolidating the title are prohibitive for their owners. Ethnic minority owners of land are particularly affected because of historical economic hardship.
The new partition statute, however, may go too far in its attempts to correct these ills. In attempting to honor the importance and sentiment tied to land ownership, the law requires judges in partition actions to consider, among other factors, "whether the land has ancestral or sentimental value to heirs; whether a co-tenant would be harmed if not allowed to continue to use the property in the same manner following the conclusion of the action; . . . and other factors relevant to the court."
Adding such factors will make it difficult for attorneys and land owners or investors to know how a partition will turn out and is likely to have a chilling effect on important legal work to consolidate land title.
Economically, land is a capital resource, and society gains when it is put to its highest and most valuable use. Placing sentimental, subjective considerations into our land partition law may have the perverse effect of raising the costs to consolidation and efficient use of land and, thus, stunt economic growth in the region.
. . . or is there?
Often, a child or close friend of an elderly person will be granted a power of attorney to help the elder handle her financial affairs. Such power of attorney is usually quite broad, granting the trusted agent the ability to, among other things, sell property, open and close bank accounts, and the like.
Far too common is the case where the trusted person then uses the power of attorney for his own financial gain. Family of the exploited elderly person find out only later (often after her death) about the misdeeds.
Given that the wrongdoer was granted a full power of attorney to do anything they thought proper with the grantor's financial affairs, isn't it impossible to sue the agent for misappropriating money or property, for re-titling assets in the agent's name?
No. In Georgia, as in most other states, an "agent . . . cannot have any interest or do any act adverse to the interest of his principal . . ." Furthermore, "[t]he agent shall not make a personal profit from his principal's property; for all such he is bound to account." First National Bank of Paulding County v. Cooper, 252 Ga. 215, 215 (1984).
If a loved one dies and the family fears he has been exploited through misuse of a power of attorney, what can be done? Foremost, an attorney should be contacted immediately. Placing an injunction on distribution of mis-titled insurance policies and accounts early on can save an estate large sums. A "constructive trust" may likewise be placed over the assets of the wrongdoing agent to ensure the stolen property isn't dissipated before the case comes to trial.
Often, such matters settle early. Faced with the reality of their misdeeds and the plain wording of Georgia law, many power-of-attorney-abusing agents will simply allow the matter to progress without putting up a fight. Even in absence of a settlement, a court showing that an agent did some act contrary to the interests of his principal is not as difficult as - say - showing that a will signer was incompetent, and litigation is often worthwhile for the estate.
Imagine that, instead of wedding billionaire Howard Marshall, Anna Nicole Smith had merely gotten engaged to him. Marshall, being as he was sixty years Smith's elder, then predeceases her, and Smith requests a posthumous wedding.
Leaving aside the billions the affair would generate for gossip columns, the possibility of posthumous marriage would wreak havoc for estate planners. What would be the inheritance rights of a posthumously marrying spouse? What level of proof is required to show that s/he was actually the fiance(e) of the decedent? What if the decedent had planned to sign a pre-nuptial agreement limiting the new spouse's inheritance rights? What if everybody knows the decedent would have backed out of the engagement prior to the wedding ceremony?
In France, legal scholars have the pleasure of tangling with such questions, as illustrated by the recent application of the fiance of a man who died as a result of "Muslim" fanatic Mohamed Merah's deranged shootings.
No such lurid details exist in this case as posited in the Anna N. Smith hypothetical above. Rather, the bereaved fiancee, carrying the decedent's child has petitioned for a respectful ceremony in which she can posthumously wed her untimely dead betrothed.
States local attorney arranging the matter, "it's a really moving ceremony, with an empty chair representing the dead spouse."
And as to the questions of proof and legitimacy of the engagement? In France, apparently at least some of those problems are dealt with by a curious level of constitutional authority given to the executive. No less than the president must sign off on the application to posthumously wed.
As Alpharetta, Georgia, probate attorneys at the Tieger Law Center rightly report this week, estate taxes can be devastating to non-US citizens.
The reason is that most U.S. citizens' estates currently pay no taxes on the first $5 million of the inheritance. Not so for non-citizens, where every dime after $60,000 is presently taxed at a 35% rate.
The “logic” behind this policy works in the case of foreign nationals who earned money abroad all their lives, brought it into the U.S., and then died. Less so for the more typical case of a foreigner who lived and worked in the U.S. for decades, paid taxes during his lifetime just like an American, and then leaves a modest estate worth more than $60,000.
The author of Tieger Law Center’s blog post recommends gifting using offshore family corporations. Other approaches to the problem abound, but key to all of them is beginning to plan early.
Tanner Pittman, LLC is an estate planning and probate law firm that assists clients in the LaGrange, Newnan, Columbus, and Metro Atlanta areas.
The Georgia Court of Appeals handed down the case of In re Mahmoodzadeh on Monday, clarifying that a petition for year's support cannot be challenged in probate court on the basis of the validity of the title to property to be set aside.
In Georgia, a surviving spouse has the right to a certain amount of property from the estate of a decedent. How much that amount should be is a question for the courts. But as a practical matter, the courts only examine the amount when an objection is filed to the year's support petition.
In Mahmoodzadeh, an objection was filed with the trial court, but it was an exotic objection, challenging not the amount of support to be awarded but the question of whether the deceased even had title to the property to be granted the petitioner.
The trial court initially stated that this latter question was outside of its jurisdiction but seems to have reversed course. Its solution was to construe the objection as one regarding the AMOUNT of year's support, not the title to the underlying property. On that basis, and based upon a lack of evidence on the petitioner's side, the petition was denied fully.
The Court of Appeals reversed. The trial court, it said, did not have jurisdiction to resolve conflicting claims to title to property, and in any event, the original objection never contested the amount of year's support. Therefore, the petitioner shouldn't have been required to establish this amount.
Full text of the case is below the "read more" break.
Tanner Pittman, LLC regularly advises clients and assists with petitions for year's support, year's support litigation, and other probate and estate matters.
Unlike Michael Jackson's, the Huffington Post reports, the Whitney Houston estate will not make much money from the bump her singles will inevitably get in radio play and record sales due to her untimely death.
But Dolly Parton will.
Parton was the writer of the popular Houston single, "I Will Always Love You," and as such commands a much larger share of the song's royalties than its singer, whose cut, according to the HP article, is diluted severely by, among other things, recording and promotion costs.
Because Houston never actually wrote her songs, most of her income streams would have been in the form of fees for tours and appearances, which of course cannot now continue.
Tanner Pittman, LLC is a Georgia law firm that handles probate and administration of complex estates.
HB 683 was signed into law this week by Georgia Governor Nathan Deal. The law allows banks, employers, and other non-lawyers to file answers to summonses of garnishment in any Georgia court, whether or not represented by an attorney. The Georgia legal newspaper of record, the Daily Report, posted a write-up of the law here.
Essentially, the law cuts against the basic notion that practicing in court without an attorney is engaging in the unauthorized practice of law. The reason is that banks and employers are organizations. In practice, they cannot "represent themselves" because they are not people. Paying an employee to represent the institution is essentially like hiring a lawyer without a bar license.
Attorney opinions are mixed on the question of whether this is a good development. On the one hand, responding to a summons of garnishment is fairly routine, and once a bank officer has done it, the procedure varies little in the second and succeeding iterations.
On the other hand, the courts simply are the province of attorneys according to Georgia law. Carving out an exception for garnishment responses makes no sense when there is no exception for other, equally routine legal matters. A strictly libertarian answer to this inconsistency would be to allow anyone, for any reason, to represent a company, lawyer or no. And then we could leave it to lawyers to prove their worth to potential corporate clients.
As this firm practices frequently on behalf of creditors in collections matters, we can say from experience that allowing non-lawyers to practice before courts, at the very least, will increase the rate of error and resultant burden on society in the form of court time and backlogs.
Congress has been mulling over allowing the "stretch IRA" benefit to lapse. At present, when you inherit a properly titled IRA, you can continue to allow it to grow tax-deferred, taking only certain required minimum distributions over your lifetime.
That may be all about to change if Congress repeals this lenient rule in the latest transportation bill.
All of which, says estate planner Ronald Morton, should make Roth IRA's even more attractive as savings vehicles. Since Roths are paid into with after-tax earnings, they trigger no tax hit when distributions are made, as they would be when the Roth is received as part of an inheritance.
Tanner Pittman, LLC is a LaGrange, Georgia, and Metro Atlanta estate planning law firm that advises clients on structuring their retirement assets for inheritance purposes.
John Goodman, the Florida millionaire, has notoriously adopted his girlfriend, who is only six years his junior.
Trial and heirs blog has a very interesting analysis of the matter here. As the authors explain it, a primary reason for the adoption is that Goodman's irrevocable trust for his children needed tending to.
It seems the trustee of the trust, in Goodman's view, was not managing it well on behalf of his teenage children. And since the trust was irrevocable, Goodman himself could not do anything to change the trustee.
Enter his girlfriend. Goodman's plan appears to have been to make her his legal "child," thus giving her the right to more closely monitor the behavior of the trustee from the standpoint of a beneficiary of the trust.
Tanner Pittman, LLC is a LaGrange, Georgia, and metro Atlanta law firm that advises clients on estate planning matters, including irrevocable trusts
Tanner Pittman, LLC is a West Georgia law firm that specializes in estate services, civil litigation, and legal transactions.
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