Zappos CEO Tony Hsieh tragically passed away on November 27 at the young age of 46. According to his family, he did not have an estate plan. This means that Mr. Hsieh’s life’s work and sizable fortune will be distributed according to state law, rather than according to his wishes.
Mr. Hsieh was a resident of Nevada at the time of his passing, which means his estate will be governed by Nevada law. But what would have happened if he were a resident of Georgia?
Estate Taxes in Georgia
Although Georgia does not have a state estate tax, Georgia residents may still be subject to the federal estate tax.
Your estate is the sum of your assets. The federal estate tax exemption is currently $11.58 million. The federal estate tax rate is up to 40% of anything exceeding $11.58 million. This means that if you pass away with less than $11.58 million in your taxable estate, there is no federal estate tax due.
For someone like Mr. Hsieh, this means hundreds of millions lost to taxes. An experienced estate planning attorney could have helped him mitigate this tax. Strategies include utilizing annual gifts, trusts, and charitable giving.
Who Inherits Without a Will in Georgia?
When someone passes away without an estate plan, their estate is distributed according to state law rather than that person’s wishes.
Each state has its own statute that dictates who inherits when a person passes away without an estate plan (for example, a Will or Trust). However, each state tries to guess or emulate what the typical person would have wanted. This is referred to as intestate law. Unfortunately, state law doesn’t always get it right.
If Mr. Hsieh were a resident of Georgia, his parents would inherit his entire estate. Without an estate plan stating otherwise, we cannot be certain if he would have wanted this.
The outcome would have been different if Mr. Hsieh had left behind a spouse or children. Under Georgia law, if you leave a surviving spouse and children, your spouse and children will share equally in the estate. However, the surviving spouse’s share cannot be less than one-third of the estate. (Our Georgia clients are often surprised to learn the spouse is not entitled to the entire estate if there are children.)
This means that if Mr. Hsieh were married and had two children, his spouse would have inherited one-third of the estate, and his two children would have each inherited one-third.
A properly drafted estate plan ensures that your assets pass to the people you choose instead of state law deciding for you.
The Probate Process in Georgia
Unfortunately, along with the unimaginable grief his family is going through, they must now go through the process of settling his estate.
As with Mr. Hsieh’s estate, someone (usually a family member) is appointed as the administrator. The administrator oversees the court-supervised probate process. Probate involves gathering, accounting for, and distributing assets according to state law.
In Georgia, a Revocable Living Trust significantly simplifies the process for your loved ones by keeping your estate out of court. This, in turn, saves time, hassles, and expenses.
Work With an Atlanta Estate Planning Attorney
Our experienced Atlanta estate planning attorneys help clients across Georgia easily check this off their to-do list. We can create a plan that keeps you in control of who inherits your assets, simplifies the process for your loved ones, and prevents legal proceedings and taxes from taking a significant portion of what you own upon your passing.
