Georgia Wills & Trusts: July 2003 Summary

Legal Developments

Increased Federal Tax Exemptions

Applicable Exclusion Amount: $1,000,000

Gift Tax Annual Exclusion Amount: $11,000

GST Exemption Amount: $1,120,000

O.C.G.A. § 53-12-265 restricts the discretionary distribution powers of a trustee who is also a beneficiary (effective July 1, 2002 ).

Generally, a trustee who is also a beneficiary may not make discretionary distributions to himself or herself, to satisfy his or her own legal support obligations, or make discretionary allocations of receipts or expenses between principal and income.  Exceptions exist to each of the foregoing.  This provision does not apply to revocable trusts, trusts which qualify for the marital deduction, or trusts which specifically reference this Code section and state that it will not apply.   Question 857.

Updated Product Features

New Language to avoid overfunding the Credit Shelter gift because of the increasing exemption

You may now specify a minimum marital gift for residuary marital gift and fractional share tax formulas as well as for a preresiduary marital gift formula.    New Questions 282, 283, 284 and 285.

New Medical Power of Attorney for minor child

This is a power of attorney given from a parent to another adult to deal with medical issues of a child; most often used when mother and dad go out of town and leave child with grandparent(s).  It gives emergency authority in case child requires medical treatment.   Question 5, New Questions 1063, 1064, 1065, 1066, 1067, 1068, 1070, 1071 and 1072.

New Option to administer Qualified Tuition Plans in DPOA.

You can now authorize the creation, funding, modification or termination of a qualified tuition plan authorized under Section 529 of the Internal Revenue Code.   New Questions 1033, 1034 and 1035.

New Clause Bank

Clauses from the Clause Bank are intended to be copied into various locations as you customize your document in your word processor.  They will be added at the end of your document.   New Question 1229.   The first two entries are:

CPI Adjustment Clause:   This clause can be used wherever you wish to adjust a distribution for inflation.  You may optionally specify that no adjustments are to be made which would cause a reduction in a distribution.     New Questions 1230, 1231 and 1232.

Oral Trust Confirmation Clause:  This can be used whenever you wish to memorialize a previously established oral trust under the new statute.  O.C.G.A. § 53-12-22.1 (2003).   New Questions 1233, 1234, 1235, 1236, 1237, 1238, 1239, 1240, 1241, 1242, 1243 and 1244.