I. PROPERTY WHICH PASSES OUTSIDE THE PROBATE ESTATE
What happens to the property owned by a person domiciled in Georgia at the time of his or her death? The answer to this question depends on the nature of the ownership of the property.
A. REAL ESTATE HELD IN JOINT TENANCY WITH SURVIVORSHIP
Real property in Georgia owned by more than one person, as joint tenants with right of survivorship, passes to the surviving owner or owners when a joint owner dies. In such case, the property passes outside the probate estate. However, if real property is owned by multiple persons as tenants in common, then each owner would have an undivided interest in the property, and on his or her death, the interest of the deceased owner would become part of his or her probate estate.
B. MULTIPLE PARTY ACCOUNTS
For multiple party accounts with financial institutions (e.g, a joint bank account), “sums remaining on deposit at the\death of a party to a joint account belong to the surviving party or parties as against the estate of the decedent, unless there is clear and convincing evidence of a different intention at the time the account is created. If there are two or more surviving parties, the respective ownership of each during his lifetime shall be in proportion to his previous ownership interests under Code Section 7-1-812, augmented by an equal share for each survivor of any interest the decedent may have owned om the account immediately before his death; and the right of survivorship continues between the surviving parties.” O.C.G.A. § 7-1-813(a).
A “’P.O.D. account’ means an account payable on request to one person during his or her lifetime or to an incorporated entity and on such person’s death to one or more P.O.D. payees or to one or more persons during their lifetimes or to an incorporated entity and on the death of all of them or the dissolution of the incorporated entity to one or more P.O.D. payees.” O.C.G.A. § 7-1-810(10). A “’P.O.D. payee’ means a person or an incorporated entity designated on a P.O.D. account as one to whom the account is payable on request after the death of one or more persons.” O.C.G.A. § 7-1-810 (11). “P.O.D.” means “pay on death.” For P.O.D. accounts, on the death of the original payee or the survivor of two or more original payees, any sums remaining on deposit belong to the P.O.D. payee or payees in equal portions if surviving, or to the survivor of them if one or more die before the original payee. O.C.G.A. § 7-1-813(b).
C. RETIREMENT ACCOUNTS AND LIFE INSURANCE
It is not uncommon for retirement accounts and life insurance policies to have designated beneficiaries. Provided that the beneficiaries survive the owner of the retirement account or plan, or the insured person in the life insurance policy, such property generally would pass outside the probate estate.
D. PROPERTY HELD IN TRUST
A person may establish a trust for himself and transfer property to the trust before his death. The trust might provide that on the death of the person establishing the trust, the trust estate passes to another person or persons, or that such trust estate will be held in trust for another person or persons. In such case, the property generally would not become part of the probate estate.
E. GENERAL COMMENTS REGARDING NON-PROBATE PROPERTY
As can be seen from the above examples, not all property of a decedent passes into the “probate estate” of a decedent. One might be tempted to own his or her property in such a manner that it passes outside the probate estate. In some situations, and for some property, this might be appropriate. However, there can be unintended consequences of owning property in such a manner that it will not be in the probate estate, and this is one reason a person is best served by consulting with an estate planning attorney to determine whether it is appropriate to own assets in a manner that will avoid probate of such assets. Disputes sometimes arise in the context of multiple party accounts. For example, if a parent has a joint bank account with only one of several children, the question might arise as to whether the parent really wanted the one child to receive the account to the exclusion of the other children. An unintended consequence of using a pay on death or P.O.D. account can be illustrated as follows. Assume that a person wants a savings account to pass in equal shares to his children, with the descendants of a deceased child to receive the share of the deceased child. The person could execute a last will and testament which provides for such distribution. However, if the person set up a pay on death account naming his children, and one of the children died before him, the account would pass only to the surviving children, and the descendants of a deceased child would not receive a share of the account.
II. PROBATE ESTATE ADMINISTRATION IN GEORGIA
If property does not pass outside the probate estate, the property would be part of the probate estate and subject to estate administration. For example, assume that a person owns his or her home, and has a bank account and savings account solely in his name at the time of his death. On his death, this property (i.e., the home, bank account, and savings account) would be part of his probate estate. Property in the probate estate generally is subject to probate administration. “In Georgia there are six distinct and different procedures which might be initiated by the heirs, beneficiaries, or creditors of an individual at his or her death. They are probate in solemn form, probate in common form, application for temporary letters of administration, application for permanent letters of administration, application for no administration necessary, and application fro year’s support. In each estate, the relative advantages or disadvantages of choosing a particular procedure should be carefully weighed.” Georgia Probate and Administration.
A. PROBATE IN SOLEMN FORM IN GEORGIA
If a person dies and has a Last Will and Testament, typically the person designated as executor will file a petition to probate the will in solemn form. The heirs of the deceased person must be notified of the petition. Although the language in a will usually states that the testator appoints a certain person or entity as the executor, it actually is the Probate Court that appoints the executor. The appointment of the executor does not occur automatically, but must be initiated by a petition to probate the will. If the original will has not already been filed with the probate court, the petitioner would file the original will with the petition to probate it. In the will, the testator may designate one or more alternate executors in the event the primary executor is unable or unwilling to serve. The testator may designate more than one person to serve as co-executors.
B. PROBATE IN COMMON FORM IN GEORGIA
Probate in common form does not involve the same formalities as does probate in solemn form. The propounder of the will need not give notice to the heirs or any other person. Probate in common form is a quick method of probating a will. "Common form probate is most useful as a temporary measure when the assets of an estate require immediate attention. An example of such a situation is an estate with a going business, farm animals, or perishable crops. Because there is no notice requirement, common form probate allows immediate action by the personal representative." Georgia Pobate & Administration, Sec. 2.1. While probate in common form might be useful in certain situations, it is not conclusive for four years, and therefore, offers little protection to the executor. "Probate in common form affords but little protection to any one; and the executor acts at his peril under such a probate, except in the payment of debts of the estate. It does not protect the legatees in the claim of title to their legacies until the expiration of a period of [four] years. Thus the administration of an estate under such a probate involves risks and uncertainties which need not be taken, and which may be avoided by probating the same will in solemn form." Jones v. Dean, 188 Ga. 319 (1939).
C. APPLICATION FOR PERMANENT LETTERS OF ADMINISTRATION IN GEORGIA
If a person domiciled in Georgia dies without a Last Will and Testament, then an interested person may file a petition for letters of administration. The Georgia statute sets forth the procedure to have an administrator appointed. The petitioner must notify the heirs of the petition in the manner required by Georgia law. An administrator is a “personal representative” of the estate. The scope of the powers granted to the administrator varies depending on whether statutory powers have been granted. A probate attorney in Georgia can provide a valuable service in assisting a client to choose the best way to seek appointment of the administrator.
Often there is confusion about the difference between the terms “heirs” and “beneficiaries.” In Georgia, “heirs” are those persons who would inherit from the decedent if there is no valid last will and testament. The persons designated in a will to receive property are called “beneficiaries.” Beneficiaries need not be heirs. A brief explanation of some of the common terms in connection with probate is found in Wills and Administration in Georgia. “The persons who will take a decedent’s property at death are described as ‘beneficiaries’ and ‘heirs.’ A ‘beneficiary’ is a person who will take the decedent’s property under a will. The interest that a beneficiary is designated to take under a will is referred to as a ‘testamentary gift.’ An ‘heir’ is an individual who will take property of a decedent that is not disposed of by will. A ‘descendant’ is a lineal descendant of an individual and includes those who are treated as descendants by virtue of adoption. Adoption results in the adopted child being treated as the biological child of the adoptive parents for purposes of inheritance and of taking under a will or other gift or testamentary instrument. The adoptive parents and their relatives are also entitled to take from and through the child by inheritance or testamentary gift, unless they are expressly excluded. Adoption terminates the relationship between the child and the child’s biological parents and relatives for purposes of inheritance or of taking under a will or other document unless the will or document expressly includes the child.”