Wednesday, May 18, 2016

Georgia :: Sheriff's Sale Price Found to be FMV for Ad Valorem County Price - overruling County BOE

May 18, 2016

In a physical precedent only case [1] , Georgia Court of Appeals Rule 33, the Court of Appeals allowed the reduction in value from $137,700.00 to $25,000.00.  That is almost an 82% reduction in value and companion reduction in the taxes due the County on the property.   The Court of Appeals cut through OCGA § 48-5-2 [2] and found that a Sheriff's Sale that only returned $25,000.00 on the courthouse steps in cash constitued an "arm's length, bona fide" [sale] transaction. 

Our firm has never evaluated such a sale as Fair Market Value (FMV) price and this opinion provides a new weapon against counties in the ongoing (never ending actually) [3] battle against rising real estate property taxes.

Hugh Wood, Esq.
Wood & Meredith, LLP
3756 LaVista Road
Suite 250
Atlanta (Tucker), GA 30084
www.woodandmeredith.com
hwood@woodandmeredith.com
www.hughwood.blogspot.com
Phone: 404-633-4100
Cell: 404-449-9041
Fax: 404-633-0068

[1]

783 S.E.2d 453
Court of Appeals of Georgia.
PARK SOLUTIONS, LLC
v.
DEKALB COUNTY BOARD OF TAX ASSESSORS.
No. A15A2136.
March 23, 2016.Reconsideration Denied April 14, 2016.
Synopsis
Background: Judicial foreclosure sale purchaser appealed decision of county board of equalization (BOE) that upheld assessor's valuation of real property. The Superior Court, DeKalb County affirmed. Purchaser appealed.
Holding: The Court of Appeals, McFadden, J., held that judicial foreclosure sale qualified as an “arm's length, bona fide sale” for purposes of statute providing one-year freeze of ad valorem tax value of property.
Reversed.
Dillard, J., concurred in judgment only and filed statement.

Attorneys and Law Firms
*453 C. Terry Blanton, for Appellant.
Jermaine Anthony Walker, Decatur, Laura Karen Johnson, Mark A. Thompson, Shaheem Malik Williams, for Appellee.
Opinion
McFADDEN, Judge.
The issue in this appeal is whether a sheriff's sale of certain real property was an “arm's length, bona fide” sale under OCGA § 48–5–2(3) so that the sale price constituted the property's maximum allowable fair market value for the next taxable year. Because *454 we find that the sheriff's sale was such an arm's length, bona fide sale, the superior court's ruling to the contrary was erroneous and must be reversed.
On June 4, 2013, Park Solutions, LLC bought a tract of land for $25,000 at a sheriff's sale in DeKalb County. The sheriff's deed provided that Mollye Devault and Robert Christopher Taylor were the owners of the property; that the owners made the deed by and through the DeKalb County sheriff, acting in his official capacity; that the sheriff conducted the sale to satisfy a default judgment of $37,796 obtained by DRST Holdings LTD; that the sale was held “at the usual place for conducting [s]heriff's sales in DeKalb [C]ounty before the [c]ourthouse door;” and that Park Solutions was the highest bidder at the “public outcry.”
After the sale, the county appraised the value of the property as $146,900 for the 2014 tax year, and Park Solutions appealed that valuation to the DeKalb County Board of Tax Assessors. The board of tax assessors issued a decision finding that the fair market value of the property was $137,700. Park Solutions appealed that decision to the DeKalb County Board of Equalization, which upheld the county tax assessor's fair market value finding of the property as $137,700. Park Solutions then appealed to the superior court, asserting that pursuant to OCGA § 48–5–2(3), the maximum allowable fair market value of the property for the 2014 tax year was the $25,000 price that it had paid at the sheriff's sale. The trial court rejected the argument, finding that the sheriff's sale was not an arm's length, bona fide sale under that statute because such “judicial foreclosure sales are not mentioned in the statute and also the parties to the sale are related and affiliated.” The trial court concluded that the county had accurately determined the fair market value of the property as of January 1, 2014, to be $137,700. Park Solutions appeals from the superior court's final order.
1. Sheriff's sale.
1
Park Solutions asserts that the trial court erred in finding that the sheriff's sale in this case was not governed by OCGA § 48–5–2(3) because such judicial foreclosure sales are not mentioned in the statute. We agree with the assertion.
OCGA § 48–5–2(3), which is part of the code governing ad valorem taxation of property, provides, in pertinent part:

    “Fair market value of property” means the amount a knowledgeable buyer would pay for the property and a willing seller would accept for the property at an arm's length, bona fide sale.... Notwithstanding any other provision of this chapter to the contrary, the transaction amount of the most recent arm's length, bona fide sale in any year shall be the maximum allowable fair market value for the next taxable year.

The term “arm's length, bona fide” sale as used in this code section is defined as “mean[ing] a transaction which has occurred in good faith without fraud or deceit carried out by unrelated or unaffiliated parties, as by a willing buyer and a willing seller, each acting in his or her own self-interest, including but not limited to a distress sale, short sale, bank sale, or sale at public auction.” OCGA § 48–5–2(.1) (emphasis supplied).
Thus, OCGA § 48–5–2(3) “provides the method for assessing [fair market] value as of [January 1 of the applicable tax year] ..., with its focus on the actual market-determined value of property on the actual date the property was acquired, rather than its value as much as a year later[.]” Columbus Bd. of Tax Assessors v. Yeoman, 293 Ga. 107, 109(2), 744 S.E.2d 18 (2013). “This amounts to a freeze on the ad valorem tax value of property for one year. [Cit.]” Ballard v. Newton County Bd. of Tax Assessors, 332 Ga.App. 521, 522, 773 S.E.2d 780 (2015).
In finding that this freeze on the value of the property did not apply to the sheriff's sale in this case, the trial court relied on OCGA § 48–5–1, which provides that “[t]he intent and purpose of the tax laws of this state are to have all property and subjects of taxation returned at the value which would be realized from the cash sale, but not the forced sale, of the property and subjects as such property and subjects are usually sold except as otherwise provided in this chapter.” (Emphasis supplied.) The trial court *455 then reasoned that foreclosure sales are considered to be forced sales and therefore “[r]eading [OCGA] § 48–5–2(.1) to include judicial foreclosure sales would be contrary to the expressed intent of Title 48 to exclude values realized as a result of the forced sale of a property.”
2
However, the trial court overlooked the plain language in OCGA § 48–5–1 providing that it applies “except as otherwise provided in this chapter.” Likewise, the controlling portion of OCGA § 48–5–2(3) itself expressly provides that it applies “[n]otwithstanding any other provision of this chapter to the contrary[.]” We must construe these statutes together and harmonize them to ascertain the legislative intent. Aimwell, Inc. v. McLendon Enterprises, 318 Ga.App. 394, 397(1), 734 S.E.2d 84 (2012). In so doing, even if we assume, without deciding, that there is some inconsistency between them, it is apparent from the plain language of both code sections that, notwithstanding anything to the contrary, the legislative intent was to allow the specific provision of a one-year freeze on ad valorem tax value set forth in OCGA § 48–5–2(3) to control over the general expression of purpose set forth in OCGA § 48–5–1. See Hubert Properties, LLP v. Cobb County, 318 Ga.App. 321, 323(1), 733 S.E.2d 373 (2012) (specific statute will prevail over a general statute to resolve any inconsistency between them).
Moreover, the trial court also erred in concluding that the absence of the term “foreclosure sale” from OCGA § 48–5–2(.1) indicates that such sales were excluded by the legislature from that code section's definition of an arm's length, bona fide sale. As recited above, OCGA § 48–5–2(.1) defines an arm's length, bona fide sale as “including but not limited to a distress sale, short sale, bank sale, or sale at public auction.” (Emphasis supplied.) Contrary to the trial court's interpretation of this code section, the legislature's use of the phrase “including but not limited to” is not restrictive or exclusive, and instead “reflects broad language of illustration or enlargement. [Cit.]” Hendry v. Hendry, 292 Ga. 1, 2(1), n. 2, 734 S.E.2d 46 (2012).
Indeed, two of the examples of the types of sales expressly included in the definition of an arm's length, bona fide sale set forth in OCGA § 48–5–2(.1)—distress sales and public auctions—clearly include the foreclosure sale executed by the sheriff in this case. “The statute does not define the ... terms [‘distress sale’ or ‘public auction,’] and we therefore look to their plain and ordinary meanings as defined by dictionaries.” Skelhorn v. State, 332 Ga.App. 782, 787(3)(b), 773 S.E.2d 45 (2015) (citation and punctuation omitted). Black's Law Dictionary (10th ed. 2014), defines the term “distress sale” as “[a] form of liquidation in which the seller receives less for the goods than what would be received under normal sales conditions,” and as a “foreclosure ... sale.” Under this ordinary meaning of the phrase, the sheriff's foreclosure sale in this case was a distress sale as contemplated by the statute.
Furthermore, Black's Law Dictionary (10th ed. 2014) defines the word “auction” as being “[a] public sale of property to the highest bidder,” and it defines the term “public sale” as meaning “[a] sale made after public notice, as in an auction or sheriff's sale.” Consistent with this dictionary definition, another statute in our official code provides that “the term ‘public sale’ means any sale, the notice of which must by law in any manner be given to the public.” OCGA § 9–13–160(a). Thus, under these definitions, the sheriff's sale in this case was a public auction at which Park Solutions was the high bidder.
“OCGA § 48–5–2(.1) expressly defines an arm's length, bona fide sale to include those types of transactions where the seller might suffer a financial loss[,] including distress sales ... or sales at public auction[ ].” CPF Investments v. Fulton County Bd. of Assessors, 330 Ga.App. 744, 749, 769 S.E.2d 159 (2015) (punctuation omitted). Here, because the sheriff's sale of the subject property was a distress sale and public auction, it was an arm's length, bona fide sale under the plain terms of OCGA § 48–5–2(.1). Consequently, the board of tax assessors could not “assess the property at a higher value in the year following the sale, regardless of whether the [b]oard believe[d] the sale price reflect[ed] the actual fair market value of the property.” CPF Investments, supra at 747 *456 , n. 4, 769 S.E.2d 159. The trial court's findings to the contrary with regard to the sheriff's sale in this case were erroneous and must be reversed. Compare Ballard, supra at 525, 773 S.E.2d 780 (holding that a tax sale purchaser receives only a defeasible fee interest and since fair market value “is not defined as the amount a buyer would pay to purchase, and a willing seller accept, for a defeasible interest in property, a tax sale does not qualify as an arm's length, bona fide sale such that the one-year freeze of OCGA § 48–5–2(3) would apply.”) (emphasis in original).
2. Parties to the sale.
The trial court also found that the sheriff's sale was not an arm's length transaction under OCGA § 48–5–2(.1) because the parties to the 2013 sheriff's sale were DRST and Park Solutions and those parties were related in that the president of DRST and the manager of Park Solutions were, respectively, father and son. However, regardless of the relationship between the father and son and the respective corporate entities, the factual premise of the trial court's ruling is flawed because DRST was not a party to the sale.
As the sheriff's deed plainly shows, the parties to the sale were the sheriff as the grantor, acting in his official capacity on behalf of the property owners, and Park Solutions as the grantee after being the highest bidder for the property at the public auction. See Associates Financial Svcs. Co. v. Johnson, 128 Ga.App. 712, 713, 197 S.E.2d 764 (1973) (sheriffs who are legally authorized to make sales at a public outcry represent the sellers of the property). Thus, contrary to the trial court's finding, DRST simply was not a party to the sheriff's sale, which instead was an arm's length sale between the unrelated and unaffiliated parties of the grantor sheriff and the grantee Park Solutions. Accordingly, the trial court's finding that the transaction was not an arm's length sale was erroneous. “In light of the foregoing [errors], the [final] order of the trial court ... is reversed.” CPF Investments, supra at 750, 769 S.E.2d 159.
Judgment reversed.
ELLINGTON, P.J., concurs and DILLARD, J., concurs in the judgment only.
DILLARD, Judge, concurring in judgment only.
I concur in judgment only because I do not agree with all that is said in the majority opinion. As a result, the majority's opinion decides only the issues presented in the case sub judice and may not be cited as binding precedent. See Court of Appeals Rule 33(a).
All Citations
783 S.E.2d 453

[2]

Effective: July 1, 2014
Ga. Code Ann., § 48-5-2
OCGA § 48-5-2. Definitions
Currentness
As used in this chapter, the term:
(.1) “Arm's length, bona fide sale” means a transaction which has occurred in good faith without fraud or deceit carried out by unrelated or unaffiliated parties, as by a willing buyer and a willing seller, each acting in his or her own self-interest, including but not limited to a distress sale, short sale, bank sale, or sale at public auction.
(1) “Current use value” of bona fide conservation use property means the amount a knowledgeable buyer would pay for the property with the intention of continuing the property in its existing use and in an arm's length, bona fide sale and shall be determined in accordance with the specifications and criteria provided for in subsection (b) of Code Section 48-5-269.
(2) “Current use value” of bona fide residential transitional property means the amount a knowledgeable buyer would pay for the property with the intention of continuing the property in its existing use and in an arm's length, bona fide sale. The tax assessor shall consider the following criteria, as applicable, in determining the current use value of bona fide residential transitional property:
(A) The current use of such property;
(B) Annual productivity; and
(C) Sales data of comparable real property with and for the same existing use.
(3) “Fair market value of property” means the amount a knowledgeable buyer would pay for the property and a willing seller would accept for the property at an arm's length, bona fide sale. The income approach, if data is available, shall be considered in determining the fair market value of income-producing property. Notwithstanding any other provision of this chapter to the contrary, the transaction amount of the most recent arm's length, bona fide sale in any year shall be the maximum allowable fair market value for the next taxable year. With respect to the valuation of equipment, machinery, and fixtures when no ready market exists for the sale of the equipment, machinery, and fixtures, fair market value may be determined by resorting to any reasonable, relevant, and useful information available, including, but not limited to, the original cost of the property, any depreciation or obsolescence, and any increase in value by reason of inflation. Each tax assessor shall have access to any public records of the taxpayer for the purpose of discovering such information.
(A) In determining the fair market value of a going business where its continued operation is reasonably anticipated, the tax assessor may value the equipment, machinery, and fixtures which are the property of the business as a whole where appropriate to reflect the accurate fair market value.
(B) The tax assessor shall apply the following criteria in determining the fair market value of real property:
(i) Existing zoning of property;
(ii) Existing use of property, including any restrictions or limitations on the use of property resulting from state or federal law or rules or regulations adopted pursuant to the authority of state or federal law;
(iii) Existing covenants or restrictions in deed dedicating the property to a particular use;
(iv) Bank sales, other financial institution owned sales, or distressed sales, or any combination thereof, of comparable real property;
(v) Decreased value of the property based on limitations and restrictions resulting from the property being in a conservation easement;
(vi) Rent limitations, operational requirements, and any other restrictions imposed upon the property in connection with the property being eligible for any income tax credits described in subparagraph (B.1) of this paragraph or receiving any other state or federal subsidies provided with respect to the use of the property as residential rental property; provided, however, that such properties described in subparagraph (B.1) of this paragraph shall not be considered comparable real property for assessment or appeal of assessment of other properties; and
(vii) Any other existing factors provided by law or by rule and regulation of the commissioner deemed pertinent in arriving at fair market value.
(B.1) The tax assessor shall not consider any income tax credits with respect to real property which are claimed and granted pursuant to either Section 42 of the Internal Revenue Code of 1986, as amended, or Chapter 7 of this title in determining the fair market value of real property.
(B.2) In determining the fair market value of real property, the tax assessor shall not include the value of any intangible assets used by a business, wherever located, including patents, trademarks, trade names, customer agreements, and merchandising agreements.
(C) Fair market value of “historic property” as such term is defined in subsection (a) of Code Section 48-5-7.2 means:
(i) For the first eight years in which the property is classified as “rehabilitated historic property,” the value equal to the greater of the acquisition cost of the property or the appraised fair market value of the property as recorded in the county tax digest at the time preliminary certification on such property was received by the county board of tax assessors pursuant to subsection (c) of Code Section 48-5-7.2;
(ii) For the ninth year in which the property is classified as “rehabilitated historic property,” the value of the property as determined by division (i) of this subparagraph plus one-half of the difference between such value and the current fair market value exclusive of the provisions of this subparagraph; and
(iii) For the tenth and following years, the fair market value of such property as determined by the provisions of this paragraph, excluding the provisions of this subparagraph.
(D) Fair market value of “landmark historic property” as such term is defined in subsection (a) of Code Section 48-5-7.3 means:
(i) For the first eight years in which the property is classified as “landmark historic property,” the value equal to the greater of the acquisition cost of the property or the appraised fair market value of the property as recorded in the county tax digest at the time certification on such property was received by the county board of tax assessors pursuant to subsection (c) of Code Section 48-5-7.3;
(ii) For the ninth year in which the property is classified as “landmark historic property,” the value of the property as determined by division (i) of this subparagraph plus one-half of the difference between such value and the current fair market value exclusive of the provisions of this subparagraph; and
(iii) For the tenth and following years, the fair market value of such property as determined by the provisions of this paragraph, excluding the provisions of this subparagraph.
(E) Timber shall be valued at its fair market value at the time of its harvest or sale in the manner specified in Code Section 48-5-7.5.
(F) Fair market value of “brownfield property” as such term is defined in subsection (a) of Code Section 48-5-7.6 means:
(i) Unless sooner disqualified pursuant to subsection (e) of Code Section 48-5-7.6, for the first ten years in which the property is classified as “brownfield property,” or as this period of preferential assessment may be extended pursuant to subsection (o) of Code Section 48-5-7. 6, the value equal to the lesser of the acquisition cost of the property or the appraised fair market value of the property as recorded in the county tax digest at the time application was made to the Environmental Protection Division of the Department of Natural Resources for participation under Article 9 of Chapter 8 of Title 12, the “Georgia Hazardous Site Reuse and Redevelopment Act,” as amended; and
(ii) Unless sooner disqualified pursuant to subsection (e) of Code Section 48-5-7.6, for the eleventh and following years, or at the end of any extension of this period of preferential assessment pursuant to subsection (o) of Code Section 48-5-7.6, the fair market value of such property as determined by the provisions of this paragraph, excluding the provisions of this subparagraph.
(4) “Foreign merchandise in transit” means personal property of any description which has been or will be moved by waterborne commerce through any port located in this state and:
(A) Which has entered the export stream, although temporarily stored or warehoused in the county where the port of export is located; or
(B) Which was shipped from a point of origin located outside the customs territory of the United States and on which United States customs duties are paid at or through any customs district or port located in this state, although stored or warehoused in the county where the port of entry is located while in transit to a final destination.
(5) “Forest land conservation value” of forest land conservation use property means the amount determined in accordance with the specifications and criteria provided for in Code Section 48-5-271 and Article VII, Section I, Paragraph III(f) of the Constitution.
(6) “Forest land fair market value” means the 2008 fair market value of the forest land; provided, however, that when the 2008 fair market value of the forest land has been appealed by a property owner and the ultimate fair market value of the forest land is changed in the appeal process by either the board of assessors, the board of equalization, a hearing officer, an arbitrator, or a superior court judge, then the final fair market value of the forest land shall replace the 2008 fair market value of the forest land. This final fair market value of the forest land shall be used in the calculation of local assistance grants. If local assistance grants have been granted to either a county, a county board of education, or a municipality based on the 2008 fair market value of forest land and subsequently the fair market value of such forest land is reduced on an appeal, then the county or the municipality shall reimburse the state, within 12 months unless otherwise agreed to by the parties, the difference between local assistance grants paid to the county or municipality and the amount which would have been due based on the final fair market value of the forest land. Such 2008 valuation may increase from one taxable year to the next by a rate equal to the percentage change in the price index for gross output of state and local government from the prior year to the current year as defined by the National Income and Product Accounts and determined by the United States Bureau of Economic Analysis and indicated by the Price Index for Government Consumption Expenditures and General Government Gross Output (Table 3.10.4).

[3]

One of the first known taxes:  Egyptian Pharaohs levied a tax on household cooking oil.  Taxes have been an ongoing event since then.

END


Egyptian Pharaohs


Thursday, January 3, 2013

Important Information from the ABA Regarding Lawyers Who Accept Credit Card Payments



New IRS requirements regarding the reporting of credit card transactions have the potential to negatively impact IOLTA accounts and lead to ethical violations by lawyers. Here are the key points about which you may wish to alert members who accept credit card payments:

  • Pursuant to the Housing Assistance Tax Act of 2008, credit card processing companies are required to verify and match each merchant’s federal tax identification number and her legal name with those found on file with the IRS. An EXACT match is required.
  • For the purposes of this requirement, lawyers who accept credit card payments are considered “merchants.”
  • If there is NOT an exact match between the information provided to the credit card processing company and the information on file with the IRS, there are serious consequences:

o Beginning January 2013, the IRS will impose a 28% withholding penalty on all credit card transactions, including those that the lawyer directs to her IOLTA account.

o If client funds that should be in the IOLTA account are withheld due to the lawyer’s failure to act and thus are not available to the client on demand, ethical issues are raised.

  • The credit card processing company should have received information from the IRS if a mismatch occurred and already notified the lawyer of the problem. However, it is not known if all processing companies have provided such notice.
  • Steps lawyers can take now to avoid an ethical violation in 2013:

o Contact the credit card processor to determine that a match occurred

o Correct mismatches if informed of one

For more information on this issue, see https://www.lawpay.com/news/irs60502.pdf

This information was provided to us by the ABA Commission on IOLTA. If you have questions, please direct them to Beverly Groudine, staff counsel to the Commission, Beverly.Groudine@americanbar.org.

Friday, September 28, 2012

THE TAXMAN COMETH
Hugh Wood, Atlanta, GA

                The Era of USA low taxes is in sunset.  The tax hammer is upon us.
               Why editorialize it. 

                2013% INCREASES IN FEDERAL TAX BRACKETS
                For those of us who actually pay taxes, federal taxes in 2012, are, to wit:  “Marginal federal income-tax rates (for the four brackets)  [are]  25%  28%  33%  35.”  [1]
                After January 1, 2013, they will rise to:
                The “marginal federal income-tax rates (for the four brackets) [will jump to] …28%  31%  36%  39.6%. The child tax credit [will] fall to $500 from $1,000.   Id.
                A MEDICAL TAX ON CAPITAL GAINS AND DIVIDEND INCOME
                After January 1, 2013, individuals will see a new tax for medical care imposed on capital gains and dividend income.   “[T]he new 3.8% MedicalCare tax, and those rates on capital gains and dividends [will jump] to 23.8% and (in the top bracket) 43.4%.   Id.
                From other sources, additional relevant tax hammers are:
                A NEW SURTAX ON INVESTMENT INCOME
                The 2013 a new Surtax on Investment Income – will bring a $123 billion tax increase: This is a new, 3.8% point surtax on investment income earned will impact households making at least $250,000 ($200,000 single). This will result in the following top tax rates on investment income:

 
Capital Gains
Dividends
Other*
2012
15%
15%
35%
2013+ (current law)
23.8%
43.4%
43.4%

                The table above also incorporates the scheduled hike in the capital gains rate from 15% to 20%, and the scheduled hike in dividends rate from 15% to 39.6%.  [2]
                MEDICARE PAYROLL TAX:  3.8% UP TO $250,000
                The new 2013 Medicare Payroll Tax Hike – will bring an $86.8 billion tax increase: The Medicare payroll tax is currently 2.9% on all wages and self-employment profits. Under this tax hike, wages and profits exceeding $200,000 ($250,000 in the case of married couples) will face a 3.8% rate instead. This is a direct marginal income tax hike on small business owners, who are liable for self-employment tax in most cases. The table below compares current law vs. the 2013 Medicare Payroll Tax Hike:
 
First $200,000 ($250,000 Married) Employer/Employee
All Remaining Wages
Employer/Employee
Current Law
1.45%/1.45%
2.9% self-employed
1.45%/1.45%
2.9% self-employed
2013 Tax Hike
1.45%/1.45%
2.9% self-employed
1.45%/2.35%
3.8% self-employed

Id.
                THE DEATH TAX RETURNS WITH A VENGEANCE (55%)
                Under federal estate tax law for 2011 and 2012, most of the wealthiest 1% of American households are not subject to estate tax liability. The large estate tax exemption is presently at $5.12 million per spouse. This means that with nominal planning households worth less than $10.24 million can avoid the estate tax.  
                Under the new January 1, 2013 Estate Tax scheme, taxable estates over $1 million will be subject to estate tax.  The maximum marginal tax rate of 55% will begin at $3 million.  [3]  So, put that  55% tax in your tax hat and smoke it.  [4]
                Why editorialize this.   The tax hammer is upon us.
Hugh Wood, Esq.
Wood & Meredith, LLP
3756 LaVista Road
Suite 250
Atlanta (Tucker), GA 30084
www.woodandmeredith.com

hwood@woodandmeredith.com
www.hughwood.blogspot.com
twitter: USALawyer_
Phone: 404-633-4100
Fax: 404-633-0068

 
[1]
Pethokoukis, James, The American Enterprise Institute, August 1, 2012.

[2]
Americans for Tax Reform, September 2012

[3]
Forbes June 2012   See also, “Top Estate Tax Rates Set To Rise To 55 Percent In 2013.”  Gladstone, Beth, ReutersMoney.  Reuters.

[4]
While perhaps a bit extreme, consider the George Steinbrenner’s (owner of the NY Yankees at death) estate.  (1930-2010).   Steinbrenner’s estate was considered to be worth $1,100,000.000.00.   Dying in 2010 his estate paid zero (0%) estate taxes.   However, if Steinbrenner had died in 2013 his estate would pay $605,000.000.00 in estate taxes (less, an exemption of 10.5M which I did not bother to calculate).

So, under 2010 law his heirs divide:  $1,100,000.000.00.

But,

Under 2013 law, his heirs would divide only:  $495,000.000.00.   And, the US Treasury has to be paid IN CASH.  Thus, the Treasury gets all the cash and the estate (mostly) gets left with all the non-liquid assets.  In many cases, this is the non-liquid real estate.

 

 

 

 

 

 

 

Monday, April 9, 2012

Notes Concerning The Legal Aspects of Death and Dying :: A College Lecture

Notes Concerning the Legal Aspects of Death and Dying: Presented at Perimeter College on April 11, 2012




Hugh Wood, Esq.
Wood & Meredith, LLP
3756 LaVista Road
Suite 250
Atlanta (Tucker), GA 30084




I.   A Death Certificate is Required at Death in Georgia


CODE OF GEORGIA
Title 31. HEALTH Chapter 10. VITAL RECORDS




OCGA § 31-10-15. Death Certificate; Filing; Medical Certification; Forwarding Death Certificate To Decedent's County Of Residence; Purging Voter Registration List


(a) A certificate of death for each death which occurs in this state shall be filed with the local registrar of the county in which the death occurred or the body was found within ten days after the death as follows:

(1) If the place of death is unknown but the dead body is found in this state, the certificate of death shall be completed and filed in accordance with this Code section. The place where the body is found shall be shown as the place of death. If the date of death is unknown, it shall be the date the body was found and the certificate marked as such; or

(2) When death occurs in a moving conveyance in the United States and the body is first removed from the conveyance in this state, the death shall be registered in this state and the place where it is first removed shall be considered the place of death. When a death occurs on a moving conveyance while in international waters or airspace or in a foreign country or its airspace and the body is first removed from the conveyance in this state, the death shall be registered in this state but the certificate shall show the actual place of death insofar as can be determined.

(b) The funeral director or person acting as such who first assumes custody of the dead body shall file the certificate of death. Such director or person shall obtain the personal data from the next of kin or the best qualified person or source available and shall obtain the medical certification from the person responsible therefor.

(c) The medical certification as to the cause and circumstances of death shall be completed, signed, and returned to the funeral director or person acting as such within 72 hours after death by the physician in charge of the patient's care for the illness or condition which resulted in death, except when inquiry is required by Article 2 of Chapter 16 of Title 45, the "Georgia Death Investigation Act." In the absence of said physician or with that physician's approval the certificate may be completed and signed by an associate physician, the chief medical officer of the institution in which death occurred, or the physician who performed an autopsy upon the decedent, provided that such individual has access to the medical history of the case, views the deceased at or after death, and death is due to natural causes.

(d) When death occurs without medical attendance as set forth in subsection (c) of this Code section or when inquiry is required by Article 2 of Chapter 16 of Title 45, the "Georgia Death Investigation Act," the proper person shall investigate the cause of death and shall complete and sign the medical certification portion of the death certificate within 30 days after being notified of the death.

(e) If the cause of death cannot be determined within 48 hours after death, the medical certification shall be completed as provided by regulation. The attending physician or coroner shall give the funeral director or person acting as such notice of the reason for the delay, and final disposition of the body shall not be made until authorized by the attending physician, coroner, or medical examiner.

(f) When death occurs on or after July 1, 1985, in a county other than the county of the residence of the deceased person, a copy of such person's death certificate shall be forwarded as soon as practicable by the department to the custodian of records of the county of the residence of such deceased person. The custodian of records shall file such death certificate as a part of the permanent records of such office.

(g) By the twentieth day of each month, the state registrar shall furnish to the Secretary of State's office, in a format prescribed by the Secretary's office, a list of those persons for whom death certificates have been filed during the preceding month. Such list shall be used by the Secretary of State to notify local registration officers for the purpose of purging the voter registration list of each county.

II.   Illegal to Abandon a Dead Body.  (Felony)

 


CODE OF GEORGIA
Title 31. HEALTH Chapter 21. DEAD BODIES Article 3. OFFENSES



Current through Chapter 419 of the 2012 Legislative Session
OCGA § 31-21-44.2. Abandonment of a Dead Body

(a)(1) Any person who throws away or abandons any dead human body or portion of such dead body shall commit the offense of abandonment of a dead body.

(2) It shall not be an offense under this subsection to make final disposition of a dead human body or portion of such dead body under a death certificate issued under Chapter 10 of this title or the law of another jurisdiction by interment, entombment, inurnment, scattering of cremated remains, burial at sea, or any means otherwise authorized by law; nor shall it be an offense under this subsection for any law enforcement personnel, medical or medical laboratory personnel, hospital personnel, coroner or medical examiner, funeral director, embalmer, crematory operator, or cemetery operator to perform those duties or acts relating to possession or disposition of a dead human body or portion of such dead body which are otherwise imposed or authorized by law or lawful contract; nor shall use of a dead human body or portion of such dead body at or by an accredited medical school, dental school, college, or university for education, research, or advancement of medical or dental science or therapy be an offense under this subsection.

(b) Any person who commits an offense of abandonment of a dead body as provided by subsection (a) of this Code section shall be guilty of a felony and shall be punished by imprisonment for not less than one nor more than three years.

III.   The Georgia Directive for Health Care Decisions

 

The new Georgia Advance Directive for Healthcare replaces Living Wills and Durable Power of Attorney

October 16, 2007
ATLANTA (GA) – The Department of Human Resources Division of Aging Services (DAS) informs Georgians that as of July 1, 2007, the new Georgia Advance Directive for Healthcare has replaced the Georgia laws on the Living Will and the Durable Power of Attorney for Healthcare. This document combines the characteristics of both the living will and the durable power of attorney for healthcare and still allows people to choose for themselves the medical care they want when they are no longer able to communicate with doctors or family. Those persons who already had living wills and/or durable powers of attorney for healthcare are allowed to keep the forms that they have and they are still legally binding until they are revoked. The Durable Power of Attorney for H ealthcare was repealed or removed from the law and the Living Will law was completely rewritten and replaced. For a copy of the Georgia Advance Directive for Healthcare, go online at www.aging.dhr.georgia.gov and click on Publications on the left.
"Having one document to fill out will simplify the process for people choosing to decide for themselves the medical care they want when they are unable to communicate with others," said Maria Greene, Director of DAS. "We encourage individuals to go to our website to obtain a copy of the new Georgia Advance Directive for Healthcare."
Like the living will, the Georgia Advance Directive for Healthcare allows for withholding or withdrawing treatment and authorizes a person’s doctor to withhold or withdraw certain medical procedures such as a respirator or ventilator in certain conditions. It also permits one to choose to accept or refuse artificial nutrition or hydration-feeding tubes. And like the former durable power of attorney for healthcare, the Georgia Advance Directive for Healthcare allows one to appoint an agent to carry out many more medical treatment decisions and choose the kinds of medical treatment they do or do not want.
The changes by the 2007 Georgia General Assembly were made to reduce confusion, inconsistency, out-of-date terminology and confusing and inconsistent requirements for execution as well as to follow trends set by other states to combine the concepts of the living will and healthcare agency into a single legal document.
Once the Georgia Advance Directive for Healthcare is signed, the person should have several copies made. The originals should be kept with your other important papers, such as your Last Will and Testament. These papers should be kept in a place where someone can find them. Copies should be given to your family members and your doctors. These documents can be revoked at any time.
A Georgia Advance Directive for Healthcare allows people to retain control over their medical care, even if they are no longer able to communicate. Making decisions about this document should help individuals and their families rest easier, knowing that their wishes about their care are known. The law does not require a person to consult an attorney or a physician when executing these documents, but if someone has questions about them, it is a good idea.
The Division of Aging Services provides free information forms on the Georgia Advance Directive for Healthcare. For more information, contact the Division of Aging Services at 404-657-5319 or go to the Division’s website at www.aging.dhr.georgia.gov and click on Publications on the left.

You can download the Advance Directive here or get it off the DHR . GEORGIA . GOV website.

http://www.docstoc.com/docs/118231651/advance-directive


A General Power of Attorney (Georgia) may be downloaded at:

http://www.docstoc.com/docs/118237101/Georgia-General-Power-of-Attorney-Form



IV.    The Five (5) Year Look Back Rule for Medicaid / Nursing Home Care :: Disposing of Assets for Nursing Care


[This overview refers to New York.  The Georgia Asset limitations are listed below]
Q. IF MY SPOUSE IS GOING INTO A NURSING HOME, CAN HE OR SHE TRANSFER ALL OF HIS OR HER ASSETS TO ME AND QUALIFY FOR MEDICAID?
A. No. To determine the eligibility of the spouse who is going into the nursing home to receive Medicaid, all of the non-exempt assets held by the husband or wife are added together and then the total divided equally between the spouses. To the extent the healthy spouse's half exceeds $74,820, in New York State, the Community Spouse Resource Allowance, (CSRA), the excess is attributed to the spouse going into the nursing home, thereby disqualifying the spouse going into the nursing home from receiving Medicaid.
The spouse outside of the nursing home can retain $74,820 in New York State, the CSRA, in otherwise non-exclude able assets, plus homestead, plus personal property, plus a burial reserve, plus an automobile and set up certain burial space agreements for children, their spouses. brothers, sisters and their spouses, etc. pursuant to strict rules set forth in an Administrative Directive issued in July, 2011, which must be carefully followed. You can protect a substantial amount of your assets if burial space agreements for family members are used correctly. Interest on burial accounts is also exempt for Medicaid purposes.

While the Community Spouse Resource Allowance (CSRA) can be as high as $109,560 for seniors with a large amount of assets, this higher CSRA results in the payment of more of your assets for nursing home costs.

It is important to understand that under New York law:

1. A spouse is charged with legal responsibility for the other spouse's nursing home costs. This means that the income and resources of the healthy spouse are considered as available to the Medicaid applicant spouse who is going into a nursing home and will be considered in determining if that spouse qualifies for Medicaid, and

2. If the healthy spouse has assets in excess of $74,820, those excess assets must be spent on medical care until the healthy spouse's assets are down to $74,820, and

3. If the healthy spouse's monthly income is more than $2,739 per month, the local Social Services Department will normally require 25% of the excess income to be spent on the nursing home costs of the spouse in the nursing home.

4. If the total income of both spouses does not exceed $2,739 per month, all of the total income can go to the healthy spouse, even if their spouse is in a nursing home.

5. The healthy spouse can refuse to support the spouse in the nursing home, but then the Department of Social Services has the right to sue the healthy spouse to recover money it pays for the nursing home costs of the spouse in the nursing home. Doing what is called a "spousal refusal" may make sense in certain situations because the Medicaid rate is less than the private pay rate.
5. Q. HOW MUCH INCOME CAN I MAKE AND QUALIFY FOR MEDICAID
A. Any person over 64 whose net income is less than $767 per month, plus an unearned income credit of $20 ($1,117 for a couple) per month, plus an unearned income credit of $20 for some couples) has satisfied the income means test for SSI related Medicaid. A single individual residing in a nursing home is permitted only $50 per month as a personal needs allowance, plus assets of $13,800 ($20,100 for a couple) plus a burial reserve. (Caution: under New York's new Estate Recovery law, passed April 1, 2011, if the person on Medicaid has this $13,800 exempt amount or any lesser amount of money in a joint account at the time of death, Medicaid can get a lien on those funds at the time of the Medicaid recipients death. Therefore planning needs to be done after the Medicaid recipient is on Medicaid and before the Medicaid recipient passes away to protect even the $13,800 exempt amount from Medicaid's lien under the new law.) You can set up a trust with a funeral director to prepay funeral expenses and the money in the trust will not be counted as a resource for Medicaid as long as any money not spent on the funeral is turned over to the Medicaid upon the senior's death. Caution, at the current time, only the cost of the vault, burial container, opening and closing of the grave, plot, stone and casket are treated as exempt for the community spouse, as opposed to the Medicaid applicant. (Car and personal residence may be exempt.) The law provides that the spouse of an individual who has established his or her eligibility for Medicaid is entitled to a monthly income not to exceed $2,739 per month.

6.Q. CAN I TRANSFER MY ASSETS TO MY CHILDREN OR OTHER FAMILY MEMBERS JUST BEFORE I GO INTO A NURSING HOME?

A. LAW IN EFFECT AFTER FEBRUARY 8, 2006. There is a new law in effect after February 8th, 2006 that will change previous law drastically. The bottom line is that under the new law there is a five year look back period and any assets transferred within 5 years of you going into a nursing home and making a Medicaid application will disqualify you from receiving Medicaid until that penalty period has run. Under the old law before February 8th, 2006, there was a Thirty Six Month Rule (applicable to outright transfers) and a Sixty Month Rule (applicable to certain transfers in trust). Eligibility for medical benefits is denied for a period of time if the person going into the nursing home transferred assets for less than fair market value within thirty six or sixty months before his or her application for Medicaid benefits. Under the old law which applies to transfers made before February 8, 2006, the period of ineligibility begins the first day of the month following the month in which the resources were transferred and lasts for a number of months equal to the total value of the transferred property divided by the average cost of nursing home care to a private patient in that region of the state. (Currently $7,688 per month in central New York State and higher in other areas of New York). Under the new law, the penalty period doesn't start to run the first day of the month after the month of the transfer, it starts to run much later, in essence, the penalty period starts to run on the date you are both: 1. in the nursing home and 2. would otherwise qualify for Medicaid, if you hadn't made the transfers. So any transfers within 5 years of applying for Medicaid result in a penalty period preventing you from qualifying for Medicaid, calculated by taking the amount you transferred within 5 years and dividing it by $8,015 (in central NY).    Source:
Law Offices of D. Victor PellegrinoAttorney at Law, 2627 Genesee Street, Utica, New York 13501, Phone (315) 733-0417, Fax (315) 792-8075.

More complete information on the Five Year Lookback may be found at:

http://estateandelderlaw.com/ep_pg2.htm


Additional information on the Asset Limitation is specific to Georgia is:

Key Medicaid Information for Georgia for 2012

Protections for the Community Spouse

Community Spouse Resource Allowance (CSRA):Minimum: $113,640
Maximum: $113,640
Increased CSRA:Permitted, with fair hearing.
Annuities:Actuarially sound annuities are permitted.
Monthly Maintenance Needs Allowance:Minimum: $2,841
Maximum: $2,841

Transfers

Average monthly cost of nursing home care according to state:$4,916.55
Has a Long-Term Care Partnership program been implemented?Yes

Income

Is the state an income cap state?Yes.

Estate Recovery

Has the state expanded the definition of estate beyond the probate estate?Yes
Has the state included a hardship provision in its estate recovery plan?Yes

Home Equity Limit

The state Medicaid program will not cover long-term care services for those with home equity above this limit, with certain exceptions.$525,000




This information was kindly provided by Ruthann P. Lacey qualified elder law attorney in Tucker, GA.

Contact Ruthann at:
Ms. Ruthann P. Lacey 
Company: Ruthann P. Lacey, P.C.
Address: 3541-E Habersham At Northlake
Tucker, GA 30084
Phone: (770) 939-4616
Fax: (770) 939-1758
Email:
rlacey@elderlaw-lacey.com
Admit Date: 01/27/1993
Law School: Emory University         

     

V.   The Testate Estate ( Dying With A Will )



Last Will and Testament Law

CODE OF GEORGIA
Title 53. WILLS, TRUSTS, AND ADMINISTRATION OF ESTATES Chapter 4. WILLS Article 1. GENERAL PROVISIONS



Current through Chapter 54 of the 2011 Special Session

Definitions are at [1]

OCGA § 53-4-1. Power Of Testator


A testator, by will, may make any disposition of property that is not inconsistent with the laws or contrary to the public policy of the state and may give all the property to strangers, to the exclusion of the testator's spouse and descendants.







OCGA § 53-4-2. When Will Takes Effect


A will shall take effect instantly upon the death of the testator however long probate may be postponed.







OCGA § 53-4-3. Determination Whether Instrument Is Will


No particular form is necessary to constitute a will. To determine whether an instrument is a will, the test is the intention of the maker to be gathered from the whole instrument, read in light of the surrounding circumstances. If the intention is to convey a present interest, though the possession is postponed until after death, the instrument is not a will. If the intention is to convey an interest accruing and having effect only at death, the instrument is a will.



CODE OF GEORGIA
Title 53. WILLS, TRUSTS, AND ADMINISTRATION OF ESTATES Chapter 4. WILLS Article 2. TESTAMENTARY CAPACITY



Current through Chapter 54 of the 2011 Special Session

OCGA § 53-4-10. Minimum Age; Conviction Of Crime


(a) Every individual 14 years of age or older may make a will, unless laboring under some legal disability arising either from a want of capacity or a want of perfect liberty of action.

(b) An individual who has been convicted of a crime shall not be deprived of the power to make a will.







OCGA § 53-4-11. Decided And Rational Desire; Incapacity To Contract; Insanity; Advanced Age Or Eccentricity


(a) Testamentary capacity exists when the testator has a decided and rational desire as to the disposition of property.

(b) An incapacity to contract may coexist with the capacity to make a will.

(c) An insane individual generally may not make a will except during a lucid interval. A monomaniac may make a will if the will is in no way connected with the monomania. In all such cases, it must appear that the will expresses the wishes of the testator unbiased by the insanity or monomania with which the testator is affected.

(d) Neither advancing age nor weakness of intellect nor eccentricity of habit or thought is inconsistent with the capacity to make a will.







OCGA § 53-4-12. Freedom Of Volition


A will must be freely and voluntarily executed. A will is not valid if anything destroys the testator's freedom of volition, such as fraudulent practices upon the testator's fears, affections, or sympathies; misrepresentation; duress; or undue influence whereby the will of another is substituted for the wishes of the testator.


CODE OF GEORGIA
Title 53. WILLS, TRUSTS, AND ADMINISTRATION OF ESTATES Chapter 4. WILLS Article 3. EXECUTION AND ATTESTATION



Current through Chapter 54 of the 2011 Special Session

OCGA § 53-4-20. Required Writing; Signing; Witnesses; Codicil


(a) A will shall be in writing and shall be signed by the testator or by some other individual in the testator's presence and at the testator's express direction. A testator may sign by mark or by any name that is intended to authenticate the instrument as the testator's will.

(b) A will shall be attested and subscribed in the presence of the testator by two or more competent witnesses. A witness to a will may attest by mark. Another individual may not subscribe the name of a witness, even in that witness's presence and at that witness's direction.

(c) A codicil shall be executed by the testator and attested and subscribed by witnesses with the same formality as a will.







OCGA § 53-4-21. Knowledge Of Contents Of Will By Testator


Knowledge of the contents of a will by the testator is necessary to the validity of a will. If the testator can read, the testator's signature or acknowledgment of that signature is presumed to show such knowledge.







OCGA § 53-4-22. Competency Of Witness


(a) Any individual who is competent to be a witness and age 14 or over may witness a will.

(b) If a witness is competent at the time of attesting the will, the subsequent incompetence of the witness shall not prevent the probate of the will.







OCGA § 53-4-23. Testamentary Gift To Witness Or Witness's Spouse


(a) If a subscribing witness is also a beneficiary under the will, the witness shall be competent; but the testamentary gift to the witness shall be void unless there are at least two other subscribing witnesses to the will who are not beneficiaries under the will.

(b) An individual may be a witness to a will by which a testamentary gift is given to that individual's spouse, the fact going only to the credibility of the witness.







OCGA § 53-4-24. Self-proved Will Or Codicil


(a) At the time of its execution or at any subsequent date during the lifetime of the testator and the witnesses, a will or codicil may be made self-proved and the testimony of the witnesses in the probate regarding such will may be made unnecessary by the affidavits of the testator and the attesting witnesses made before a notary public. The affidavit and certificate provided in subsection (b) of this Code section shall be the only prerequisites of a self-proved will or codicil.

(b) The affidavit shall be evidenced by a certificate, affixed with the official seal of the notary public, that is attached or annexed to the will or codicil, in form and content substantially as follows:
   STATE OF GEORGIA
   COUNTY of ___________
    
  Before me, the undersigned authority, on this day personally
  appeared _______________________, ______________________, and
  _______________________, known to me to be the testator and the
  witnesses, respectively, whose names are subscribed to the annexed
  or foregoing instrument in their respective capacities, and all of
  said individuals being by me duly sworn, _______________________,
  testator, declared to me and to the witnesses in my presence that
  said instrument is the last will and testament or a codicil to the
  last will and testament of the testator and that the testator had
  willingly made and executed it as a free act and deed for the
  purposes expressed therein.  The witnesses, each on oath, stated
  to me in the presence and hearing of the testator that the
  testator had declared to them that the instrument is the
  testator's last will and testament or a codicil to the testator's
  last will and testament and that the testator executed the
  instrument as such and wished each of them to sign it as a
  witness; and under oath each witness stated further that the
  witness had signed the same as witness in the presence of the
  testator and at the testator's request; that the testator was 14
  years of age or over and of sound mind; and that each of the
  witnesses was then at least 14 years of age.
    
                                             _______________________
                                                            Testator
    
                                             _______________________
                                                             Witness
    
                                             _______________________
                                                             Witness
    
  Sworn to and subscribed before me by _______________________,
  testator, and sworn to and subscribed before me by
  _______________________ and _______________________, witnesses,
  this ______ day of ______________, ____.
    
  (SEAL)
    
  (Signed)______________________________
          (Official Capacity of Officer)


(c) A self-proved will or codicil may be admitted to probate without the testimony of any subscribing witness, but otherwise it shall be treated no differently from a will or codicil that is not self-proved. In particular, without limiting the generality of the foregoing sentence, a self-proved will or codicil may be contested, revoked, or amended in exactly the same fashion as a will or codicil that is not self-proved.

VI.   The Intestate Testate Estate ( Dying Without a Will )


CODE OF GEORGIA
Title 53. WILLS, TRUSTS, AND ADMINISTRATION OF ESTATES Chapter 2. DESCENT AND DISTRIBUTION Article 1. GENERAL PROVISIONS



Current through Chapter 54 of the 2011 Special Session

OCGA § 53-2-1. Rules of Inheritance when Decedent Dies without Will


(a) As used in this Code section, the term:

(1) "Abandon" means that a parent of a minor child, without justifiable cause, fails to communicate with the minor child, care for the minor child, and provide for the minor child's support as required by law or judicial decree for a period of at least one year immediately prior to the date of the death of the minor.

(2) "Abandonment" means the act of abandoning.

(3) "Minor child" means a person who is less than 18 years of age.

(b) For purposes of this Code section:

(1) Children of the decedent who are born after the decedent's death are considered children in being at the decedent's death, provided they were conceived prior to the decedent's death, were born within ten months of the decedent's death, and survived 120 hours or more after birth; and

(2) The half-blood, whether on the maternal or paternal side, are considered equally with the whole-blood, so that the children of any common parent are treated as brothers and sisters to each other.

(c) Except as provided in subsection (d) of this Code section, when a decedent died without a will, the following rules shall determine such decedent's heirs:

(1) Upon the death of an individual who is survived by a spouse but not by any child or other descendant, the spouse is the sole heir. If the decedent is also survived by any child or other descendant, the spouse shall share equally with the children, with the descendants of any deceased child taking that child's share, per stirpes; provided, however, that the spouse's portion shall not be less than a one-third share;

(2) If the decedent is not survived by a spouse, the heirs shall be those relatives, as provided in this Code section, who are in the nearest degree to the decedent in which there is any survivor;

(3) Children of the decedent are in the first degree, and those who survive the decedent shall share the estate equally, with the descendants of any deceased child taking, per stirpes, the share that child would have taken if in life;

(4) Parents of the decedent are in the second degree, and those who survive the decedent shall share the estate equally;

(5) Siblings of the decedent are in the third degree, and those who survive the decedent shall share the estate equally, with the descendants of any deceased sibling taking, per stirpes, the share that sibling would have taken if in life; provided, however, that, subject to the provisions of paragraph (1) of subsection (f) of Code Section 53-1-20, if no sibling survives the decedent, the nieces and nephews who survive the decedent shall take the estate in equal shares, with the descendants of any deceased niece or nephew taking, per stirpes, the share that niece or nephew would have taken if in life;

(6) Grandparents of the decedent are in the fourth degree, and those who survive the decedent shall share the estate equally;

(7) Uncles and aunts of the decedent are in the fifth degree, and those who survive the decedent shall share the estate equally, with the children of any deceased uncle or aunt taking, per stirpes, the share that uncle or aunt would have taken if in life; provided, however, that, subject to the provisions of paragraph (1) of subsection (f) of Code Section 53-1-20, if no uncle or aunt of the decedent survives the decedent, the first cousins who survive the decedent shall share the estate equally; and

(8) The more remote degrees of kinship shall be determined by counting the number of steps in the chain from the relative to the closest common ancestor of the relative and decedent and the number of steps in the chain from the common ancestor to the decedent. The sum of the steps in the two chains shall be the degree of kinship, and the surviving relatives with the lowest sum shall be in the nearest degree and shall share the estate equally.

(d) Except as provided in Code Sections 19-7-1 and 51-4-4 for the right of recovery for the wrongful death of a child, when a minor child dies without a will, a parent who willfully abandoned his or her minor child and has maintained such abandonment shall lose all right to intestate succession to the minor child's estate and shall not have the right to administer the minor child's estate. A parent who has been deprived of the custody of his or her minor child under an order of a court of competent jurisdiction and who has substantially complied with the support requirements of the order shall not be barred from inheriting from the minor child's estate.

(e) For cases in which abandonment is alleged, the moving party shall file a motion with the probate court requesting the judge to determine the issue of abandonment and shall serve all parties as set forth in subsection (f) of this Code section. A hearing shall be conducted and all parties shall have the opportunity to present evidence regarding the party's relationship with the decedent. The burden of proof to show an abandonment is on the person asserting the abandonment by clear and convincing evidence.

(f) All parties to a motion filed pursuant to subsection (e) of this Code section shall be served in accordance with Chapter 11 of this title. If a party cannot be personally served and the party's interest in an estate is subject to forfeiture pursuant to subsection (d) of this Code section, the judge shall appoint a guardian ad litem for the party. If a party cannot be personally served, the citation shall also be published in the newspaper in which sheriff's advertisements are published in the county where the party was last known to reside.

(g) In the event that a parent is disqualified from taking a distributive share in the estate of a decedent under subsection (d) of this Code section, the estate of such decedent shall be distributed in accordance with subsection (c) of this Code section as though the parent had predeceased the decedent.

Cite as O.C.G.A. § 53-2-1







OCGA § 53-2-3. Inheritance By Children Born Out Of Wedlock


The rights of inheritance of a child born out of wedlock shall be as follows:

(1) A child born out of wedlock may inherit in the same manner as though legitimate from or through the child's mother, the other children of the mother, and any other maternal kin;

(2)(A) A child born out of wedlock may not inherit from or through the child's father, the other children of the father, or any paternal kin by reason of the paternal kinship, unless:

(i) A court of competent jurisdiction has entered an order declaring the child to be legitimate, under the authority of Code Section 19-7-22 or such other authority as may be provided by law;

(ii) A court of competent jurisdiction has otherwise entered a court order establishing paternity;

(iii) The father has executed a sworn statement signed by him attesting to the parent-child relationship;

(iv) The father has signed the birth certificate of the child; or

(v) There is other clear and convincing evidence that the child is the child of the father.

(B)(i) Subparagraph (A) of this paragraph notwithstanding, a child born out of wedlock may inherit from or through the father, other children of the father, or any paternal kin by reason of the paternal kinship if evidence of the rebuttable presumption of paternity described in this subparagraph is filed with the court before which proceedings on the estate are pending and the presumption is not overcome to the satisfaction of the trier of fact by clear and convincing evidence.

(ii) There shall exist a rebuttable presumption of paternity of a child born out of wedlock if parentage-determination genetic testing establishes at least a 97 percent probability of paternity. Parentage-determination genetic testing shall include, but not be limited to, red cell antigen, human leucocyte antigen (HLA), red cell enzyme, and serum protein electrophoresis tests or testing by deoxyribonucleic acid (DNA) probes.

(C) If any one of the requirements of divisions (i) through (v) of subparagraph (A) of this paragraph is fulfilled, or if the presumption of paternity set forth in subparagraph (B) of this paragraph shall have been established and shall not have been rebutted by clear and convincing evidence, a child born out of wedlock may inherit in the same manner as though legitimate from and through the child's father, the other children of his or her father, and any other paternal kin;

(3) In distributions under this Code section, the children of a deceased child born out of wedlock shall represent that deceased child.






OCGA § 53-2-4. Inheritance From Children Born Out Of Wedlock


(a) The mother of a child born out of wedlock, the other children of the mother, and other maternal kin may inherit from and through the child born out of wedlock in the same manner as though the child were legitimate.

(b) The father of a child born out of wedlock, the other children of the father, and other paternal kin may inherit from and through the child born out of wedlock in the same manner as if the child were legitimate if:

(1) A court of competent jurisdiction has entered an order declaring the child to be legitimate under the authority of Code Section 19-7-22 or such other authority as may be provided by law;

(2) A court of competent jurisdiction has otherwise entered a court order establishing paternity;

(3) The father has, during the lifetime of the child, executed a sworn statement signed by the father attesting to the parent-child relationship;

(4) The father has, during the lifetime of the child, signed the birth certificate of the child; or

(5) The presumption of paternity described in division (2)(B)(ii) of Code Section 53-2-3 has been established and has not been rebutted by clear and convincing evidence.








OCGA § 53-2-5. Children Conceived By Artificial Insemination


An individual conceived by artificial insemination and presumed legitimate in accordance with Code Section 19-7-21 shall be considered a child of the parents and entitled to inherit under the laws of intestacy from the parents and from relatives of the parents, and the parents and relatives of the parents shall likewise be entitled to inherit as heirs from and through such individual.







OCGA § 53-2-6. Individual Related To Decedent Through Two Or More Lines Of Relationship


An individual who is related to the decedent through two or more lines of relationship is entitled to only a single share based on the relationship entitling that individual to the largest share under the laws of intestacy.








OCGA § 53-2-7. Vesting Of Title To Property; Right To Possession


(a) Upon the death of an intestate decedent who is the owner of any interest in real property, the title to any such interest which survives the intestate decedent shall vest immediately in the decedent's heirs at law, subject to divestment by the appointment of an administrator of the estate.

(b) The title to all other property owned by an intestate decedent shall vest in the administrator of the estate for the benefit of the decedent's heirs and creditors.

(c) Upon the appointment of an administrator, the title to any interest in real property which survives the intestate decedent shall vest in the administrator for the benefit of the heirs and creditors of the decedent, and title to such property shall not revest in the heirs until the administrator assents to such revesting. For purposes of this Code section, the assent of the administrator shall be proved in the manner set out in Code Section 53-8-15.

(d) Upon the appointment of an administrator, the right to the possession of the whole estate is in the administrator, and, as long as administration continues, the right to recover possession of the estate from all other persons is solely in the administrator. The administrator may recover possession of any part of the estate from the heirs at law or purchasers from them; but, in order to recover real property, it is necessary for the administrator to show, upon the trial, either that the property which is the subject of the action has been in the administrator's possession and without the administrator's consent is held by the defendant at the time of bringing the action or that it is necessary for the administrator to have possession for the purpose of paying the debts, making a proper distribution, or for other purposes provided for by law. An order for sale or distribution, granted by the judge of the probate court after notice to the defendant, shall be conclusive evidence of either fact.

(e) If an order has been entered under Code Section 53-2-41 that no administration is necessary, or if the administrator has assented to the vesting of title in the heirs, the heirs may take possession of the property or may sue for possession of the property in their own right.






OCGA § 53-2-8. Death Intestate, And Without Ascertainable Heirs, Of Spouse Of Intestate Decedent


(a) When the spouse of an intestate decedent dies intestate and without ascertainable heirs within six months of the decedent's death, any undistributed property of the decedent to which the spouse had been entitled prior to the spouse's death shall not escheat but shall be distributed to the heirs of the decedent who would have inherited the property under the intestacy laws if the spouse had predeceased the decedent.

(b) The nonexistence of heirs of the spouse may be determined by publication as provided in Code Section 53-2-51. If no heir of the spouse appears, the property, less the expenses of the proceedings to determine the nonexistence of heirs, shall be paid over as provided in subsection (a) of this Code section.

VII.   TAX CONSIDERATIONS: THE STEP-UP BASIS RULE

What is the “step-up in basis” rule?

In general, when you sell an asset that has risen in value, you pay taxes on the gain. For assets like stocks, the “capital gain” is generally calculated as the difference between the purchase and sale price.
For example, if you buy shares in a company for $100 and sell them for $300, you have $200 in capital gain. The original purchase price, $100, is called your “basis” in the shares.
But there is a special rule for inherited property. Here’s how it works: If you inherit a stock from your late aunt and later sell it, you are taxed on the difference between what you sold it for and what the stock was worth when Auntie died.
Let’s say Auntie bought the stock a long time ago for $1,000 and its value climbed to $50,000 during her lifetime. When you inherit the stock, your “basis” is the stock’s fair-market value upon Auntie’s death, or $50,000, rather than the $1,000 she paid for it.
That step-up in basis means that when you sell the stock now, you’ll only pay taxes on any gain above $50,000 that occurred while you held the stock.
Since Auntie held the stock until she passed away, she never “realized” the $49,000 in gain, and therefore never paid taxes on it either. So the step-up in basis rule means that $49,000 goes permanently untaxed.   Source:  Seth Hanlon.  Center for American Progress.  February 16, 2011.

See, 28 USC Sec. 1014 Basis of Property Acquired from a Decedent

(a) In general
Except as otherwise provided in this section, the basis of property in the hands of a person acquiring the property from a decedent or to whom the property passed from a decedent shall, if not sold, exchanged, or otherwise disposed of before the decedent’s death by such person, be—
(1)the fair market value of the property at the date of the decedent’s death,
(2)in the case of an election under either section 2032 orsection 811(j) of the Internal Revenue Code of 1939 where the decedent died after October 21, 1942, its value at the applicable valuation date prescribed by those sections,
(3)in the case of an election under section 2032A, its value determined under such section, or
(4)to the extent of the applicability of the exclusion described in section 2031(c), the basis in the hands of the decedent.


VIII.   CONCLUSION



&&&&&&&&&&&&&

ENDNOTES


[1]

OCGA § 53-1-2. Definitions [Associated with Wills Trusts and Estates ]


As used in this chapter and Chapters 2 through 11 of this title, the term:


(1) "Administrator" means any person appointed and qualified to administer an intestate estate, including an intestate estate already partially administered by an administrator and from any cause unrepresented.


(2) "Administrator with the will annexed" means any person, other than an executor, appointed and qualified to administer a testate estate, including a testate estate already partially administered and from any cause unrepresented.


(3) "Beneficiary" means a person, including a trust, who is designated in a will to take an interest in real or personal property.


(4) "Codicil" means an amendment to or republication of a will.


(5) "County administrator" means any individual or individuals appointed by the probate court of the county and qualified to represent an estate that is unrepresented and unlikely to be represented.


(6) "Descendants" means the lineal descendants of an individual including those individuals who are treated as lineal descendants by virtue of adoption.


(7) "Executor" means any person nominated in a will who has qualified to administer a testate estate, including a person nominated as alternative or successor executor.


(8) "Guardian" means the guardian ad litem or representative described in Code Section 53-11-2 who represents one or more parties to a probate court proceeding who are not sui juris, are unborn, or are unknown.


(9) "Heirs" means those one or more individuals who survive the decedent and are determined under the rules of inheritance to take the property of the decedent that is not disposed of by will.


(10) "Nominated executor" means any person nominated in the will to serve as executor who has not yet qualified to serve as executor.


(11) "Person" means an individual, corporation, partnership, association, joint-stock company, business trust, unincorporated organization, limited liability company, or two or more persons having a joint or common interest, including an individual or a business entity acting as a personal representative or in any other fiduciary capacity.


(12) "Personal representative" means any administrator, administrator with the will annexed, county administrator, or executor.


(13) "Qualified" means that a personal representative has taken the oath, posted any required bond, and been issued letters of administration or letters testamentary, as provided in this title.


(14) "Sui juris" means an individual is age 18 or over and not suffering from any legal disability.


(15) "Temporary administrator" means any person granted temporary letters of administration upon an unrepresented estate.


(16) "Testamentary gift" means the interest in real or personal property which a beneficiary is designated to take in a will.


(17) "Will" means the legal declaration of an individual's testamentary intention regarding that individual's property or other matters. Will includes the will and all codicils to the will.


Miscellaneous:


Lord Neaves 1800 - 1876.  High Court of Scotland (Court of Session or The Supreme Court of Scotland)


Ye lawyers who live upon litigants' fees,
And who need a good many to live at your ease,
Grave or gay, wise or witty, whate'er your degree,
Plain stuff or Queen's Counsel, take counsel of me:
When a festive occasion your spirit unbends,
You should never forget the profession's best friends;
So we'll send round the wine, and a light bumper fill
To the jolly testator who makes his own will.
He premises his wish and his purpose to save
All dispute among friends when he's laid in the grave;
Then he straightway proceeds more disputes to create
Than a long summer's day would give time to relate.
He writes and erases, he blunders and blots,
He produces such puzzles and Gordian knots,
That a lawyer, intending to frame the thing ill,
Couldn't match the testator who makes his own will.
Testators are good, but a feeling more tender
Springs up when I think of the feminine gender!
The testatrix for me, who, like Telemaque's mother,
Unweaves at one time what she wove at another;
She bequeaths, she repeats, she recalls a donation,
And ends by revoking her own revocation;
Still scribbling or scratching some new codicil,
Oh! success to the woman who makes her own will.
'Tisn't easy to say, 'mid her varying vapors,
What scraps should be deemed testamentary papers.
'Tisn't easy from these her intention to find,
When perhaps she herself never knew her own mind.
Every step that we take, there arises fresh trouble:
Is the legacy lapsed? Is it single or double?
No customer brings so much grist to the mill
As the wealthy old woman who makes her own will.

The law decides questions of meum and tuum,
By kindly consenting to make the thing suum;
The Aesopian fable instructively tells
What becomes of the oysters, and who gets the shells;
The legatees starve, but the lawyers are fed;
The Seniors have riches, the Juniors have bread;
The available surplus of course will be nil,
From the worthy testators who make their own will.
You had better pay toll when you take to the road,
Than attempt by a by-way to reach your abode;
You had better employ a conveyancer's hand
Than encounter the risk that your will shouldn't stand.
From the broad beaten track when the traveler strays,
He may land in a bog or be lost in a maze;
And the law, when defied, will avenge itself still
On the man and the woman who make their own will.

& & &



“Jarndyce and Jarndyce drones on. This scarecrow of a suit has, in course of time, become so complicated that no man alive knows what it means. The parties to it understand it least, but it has been observed that no two Chancery lawyers can talk about it for five minutes without coming to a total disagreement as to all the premises. Innumerable children have been born into the cause; innumerable old people have died out of it. Scores of persons have deliriously found themselves made parties in Jarndyce and Jarndyce without knowing how or why; whole families have inherited legendary hatreds with the suit. The little plaintiff or defendant who was promised a new rocking-horse when Jarndyce and Jarndyce should be settled has grown up, possessed himself of a real horse, and trotted away into the other world.”


 Dickens, Charles, BLEAK HOUSE, Bradbury & Evans, London (1853).