Articles Posted in ESTATE PLANNING

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The Atlanta, Georgia, fiduciary and Estate Litigation lawyers have seen a striking increase in the exploitation of the elderly through powers of attorney. Make no mistake about it; abusing the fiduciary duty imposed under Georgia law for the holder of a power of attorney is tantamount to stealing. It is white-collar crime at its worst. Our Atlanta, Georgia breach of fiduciary duty lawyers have significant experience in rectifying the misuse and abuse of a power of attorney. Our Firm is also aggressive in recovery of the exploited funds.

A Georgia power of attorney gives someone else the legal capability and power to act on behalf of another without their presence. Oftentimes, powers of attorney entail taking over extremely important day-to-day affairs of another and usually involve legally taking over their finances. While powers of attorney can be an effective tool to assist elderly and other persons with diminished capacity and ability, they are easily used to exploit the elderly or other persons with diminished mental or physical capacity. What is more, power of attorney documents are easily obtainable and can be purchased in kits from office and legal supply stores or downloaded online, sometimes free.

In these troubled economic times, family members, friends, and other persons have been using powers of attorney for their own financial gain by taking advantage of the elderly through the use of these documents. If this abuse goes unchecked, the assets, and sources of income of an elderly or incapacitated person can be devastated. In fact, the damage done can be limitless and usually is permanent unless it is possible to recover the assets back from the person who abused the power of attorney.

It is sad, but necessary in this day and time to be very guarded and protective of anyone holding a power of attorney. This is as true for a family member. As the old adage goes: It seems to be the ones you are closest to that hurt you the most. In fact, oftentimes, it is the family member or friend who borrows a little money with the characterless belief they will pay it back.

With the economy worsening, the temptation to acquire and/or abuse a power of attorney is ripe for occurring.

Who should I be on the lookout for?

• Acquaintances
• Family Members (especially ones in financial trouble)

• Scam artists

• Someone who befriends an older person
• Any person who exhibits strange and engaging activity, interest, and behavior toward an elderly or person with diminished capacity or ability

Setting up the power of attorney properly to lessen the chance of abuse.

• Seek advice and retain an attorney to create the power of attorney and explain how they work.

• Limit the powers granted under the power of attorney to those duties necessary for the purpose of the document. A “blanket” power of attorney is dangerous!

• Require the agent to provide a semiannual accounting in the power of attorney, which must be provided to a number or responsible persons who understand accounting and willing to take the time to see that the power of attorney is being used appropriately.

• Require the agent to keep all documentation pursuant to the power of attorney, such as receipts, bank statements, a daily or weekly journal or account ledger, etc.

• Consider a court-appointed conservatorship rather than a power of attorney. The courts require reports to be submitted and these are reviewed by the court staff, are public record, and open for inspection.

• It is best to have one person as agent under a power of attorney as co-powers of attorney only create confusion and result in disagreements.

• Should you be acting under a power of attorney for another, keep detailed, hard copy, and electronic copies of all records. Remember, you have a fiduciary duty as you are acting on behalf of another person. You are required by Georgia law to do what is in the best interest of the other person, which may be contrary to your own best interest and wishes.

Our Atlanta, Georgia estate and probate lawyers advocate that any power of attorney should not be entered into without serious consideration, substantial disclosure, and protections in place.


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A business owner pays approximately 16% of his or her salary in payroll tax. The payroll tax is in addition to federal and state income tax. For example, if you pay yourself a salary of $75,000, the payroll tax is approx. $12,000, plus federal and state tax.

Here’s a tip on how to save on payroll taxes. Suppose your business earns a profit of about $75,000 per year. So you pay yourself a salary of $75,000. Your payroll tax is approx. $12,000. If you were operating your business as an “S” corporation, which many small business owners do, then you need to know that distributions of profit from an “S” corporation are not subject to payroll tax.

Instead of paying yourself a salary of $75,000 (all of which is subject to payroll tax), pay yourself a smaller but reasonable salary of say $25,000. Thus, the payroll tax is approximately $4,000. The other $50,000 is distributed to you as an “S” corporation dividend. There is no payroll tax on the $50,000 distribution. That’s a tax savings of approx. $8,000!!!

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A Notice of Deficiency (“90-day letter”) is sent by the Internal Revenue Service (“IRS”) to officially allege that a taxpayer owes additional taxes. If you receive a Notice of Deficiency, you need to contact an Atlanta tax law firm immediately. When choosing which Atlanta tax law firm to contact, you should consider choosing an Atlanta based law firm with an experienced Atlanta tax attorney, IRS tax lawyer, and/or Atlanta tax law expert.

Once you receive the Notice of Deficiency, you have 90 days from the date of the Notice (not 90 days from the date you receive the Notice) to consult an Atlanta tax attorney and/or Atlanta tax expert to assist you in considering your options and addressing the serious nature and implied allegations of this IRS Notice. The reason I suggest that your seek out counsel from an Atlanta tax attorney and/or Atlanta tax expert, is that the United States Southeastern Headquarters for the Internal Revenue Service (“IRS”) is located in Atlanta as are the Federal Tax Court and the Federal Court for the Northern District of Georgia. This has several advantages in that resolving your IRS tax matter may involve a meeting with an Atlanta Based Internal Revenue Service Agent (“IRS Agent”) in the City of Atlanta. Additionally, should you need to resolve any Internal Revenue Service (“IRS”) dispute through the administrative tax law process in Tax Court or through litigation in Federal Court; you will likely be doing so in Atlanta, GA.

Regardless of whether you believe the Internal Revenue Service (“IRS”) is correct, the amount alleged in the Notice of Deficiency is due and owing. As such, I strongly recommended you consult an Atlanta tax attorney, Atlanta IRS tax lawyer, and/or Atlanta tax expert. In my many years of practicing in an Atlanta tax law firm as an Atlanta tax attorney, I have seen all too many people misread or not understand these IRS letters and cast them aside only to find out later that this alleged IRS Notice of Deficiency has dire consequences because IRS Tax Notice went disregarded.

As general rule, when the IRS involved and it is not in the common course of your dealings with them, you should err on the side of caution and understand what exactly it is you have received from them and what your options are. Moreover, many people throw these IRS Notices aside only to have this action come back to haunt them with extraordinarily expensive and dire consequences. You should have an Atlanta tax lawyer, Internal Revenue Service (“IRS”) tax lawyer and/or Atlanta tax expert advise you on exactly what the Notice you received is, and exactly what it means for you. It is altogether true; most people do not understand the nature of these letters and what exactly this particular “Notice” is telling you. Furthermore, assuming you are correct in your evaluation of the alleged Notice of Deficiency, you should consider having an Atlanta tax attorney and/or Atlanta tax expert negotiate an installment payment agreement or formulate “Offer in Compromise” on your behalf. This of course, is assuming you qualify for these forms of payment plans. Nevertheless, it is better to work with the Internal Revenue Service (“IRS”) at the earliest time you can and before it is too late. Once the IRS has spent time, monies, and resources tracking you down and seeking and forcing payment from you, they are much less likely to negotiate, if they will negotiate at all.


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There is now tax relief for Georgia homeowners and an upper hand advantage for the Georgia Tax Attorneys and Georgia Real Estate Attorneys who represent and assist them. In a news brief issued by the IRS for the benefit of those with troubled loans, the government now says that if your mortgage debt is partly or entirely forgiven during 2007, 2008 or 2009 you may be able to claim special tax relief by filling out Form 982 and attaching it to your federal income tax return for that year. Usually, forgiveness of debt results in taxable income. However, under the Mortgage Forgiveness Debt Relief Act of 2007, you may be able to exclude from tax up to $2 million of debt forgiven on your primary residence. The limit is $1 million for a married person filing a separate return.

Debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure, may qualify for this relief. The debt must have been used to buy, build, or substantially improve your principal residence and must have been secured by that residence. Debt used to refinance qualifying debt is also eligible for the exclusion, but only up to the amount of the old mortgage principal, just before the refinancing.

Debt forgiven on second homes, rental property, business property, credit cards, or car loans does not qualify for the new tax-relief provision. In some cases, however, other kinds of tax relief, based on insolvency, for example, may be available. The Libby Law Firm is conveniently located in the heart of Buckhead in Atlanta, Georgia, near the intersection of Piedmont and Roswell Roads. We would welcome the opportunity to be of assistance to you regarding any type of tax related matter concerning debt relief or other type loan restructuring or loan workout matters. Please call us at (404) 467-8611 , to discuss your options, or send us a message through our confidential Web Site form.

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Foreign nationals may not fully understand the effect a green card has on his or her status for United States (“Federal”) tax purposes. The Federal Government taxes United States citizens and resident aliens on their worldwide income, regardless of their presence (or lack of presence) in the US. Nonresident aliens are only subject to Federal tax on their income connected to the United States.

For example, suppose you are a citizen of a foreign country and work full-time in a foreign country. While you may make no income in the United States and you only visit the United States a few weeks each year, the questions arises as to whether you owe Federal tax.

The answer may surprise you. It depends on whether you are deemed a resident alien or a nonresident alien. The test generally depends upon the number of days you are in the US. Most foreign nationals are aware of the “183 day” test, and keep careful track of their days of entry and leaving the US.

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Our Atlanta, Georgia estate law firm uses multiple vehicles when creating and an estate plan. One common estate planning tool involves joint ownership of an asset. Joint ownership of property means legal title is in two or more names. Generally this means upon the death of one legal owner, the property passes by operation of law to the other legal owner. Sometimes this type of ownership makes a lot of sense. For example, a husband and wife own their home in joint names. Upon the death of the first spouse, the home passes by operation of law to the surviving spouse.

There is no probate for most jointly owned property. There is no court involvement in the surviving joint owner assuming full legal title to the jointly owned property. Again, many times this is exactly what the decedent wants and the survivor has no probate concerns.

The lack of probate and the ease of property transfer are among the reasons a mother or father frequently add a child’s name to the mother’s or father’s bank account. But remember upon death the bank account, certificate of deposit or whatever property is held in joint names with a child transfers by operation of law to that child alone.

I’ve seen many surviving spouses name their children as equal beneficiaries in their will, but then put most if not all of their assets in joint names with just one child. Guess what happens on death? Despite the will directing that all the children share equally in the assets, there are no assets in the probate estate upon which the will operates to pass legal title. Instead, all the assets pass by operation of law solely to the child who is named as a joint owner.

Joint ownership can be a trap if you’re not careful and that is why the engagement of an estate planning attorney is essential to eliminate the many traps that you can fall into. In Atlanta, GA The Libby Law Firm crafts each estate plan with the individual in mind setting our goals for the minimum amount of probate and expense with the maximum amount of client satisfaction.
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Living trusts have become popular in Georgia in the last several years as an estate planning alternative to conventional wills. They are frequently touted as a way to avoid the Georgia probate courts, which are sometimes criticized as expensive and slow to resolve estates. While I believe the probate process doesn’t have to be those things, I am also happy to set up living trusts when they make sense for my clients.

Unlike a will, a living trust isn’t a legal document in which you simply write down your wishes. A trust is a legal structure like a corporation or a partnership. After you create it, you can transfer your assets — your home, bank accounts and other property — into the trust and then specify who is to receive them after you die. This legal trick allows you to take all of your assets out of your own name while keeping them under your control. Because probate only applies to property held in your own name, you can avoid a probate case in this way.

People who set up living trusts generally name themselves as the sole trustee in charge of the trust, or name their spouses as co-trustees, although they can name any adult. Trustees have the legal right to manage and control the trust’s assets, so it’s important to name trustworthy people. You can also name a person or institution as a successor trustee to manage the trust if you are incapacitated.
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Lifetime gifts in contemplation of death, or so-called “deathbed gifts” are usually made by a surviving parent to a child. The parent and/or the child think the gift is a good idea, probably to facilitate a transfer of legal title and/or to avoid probate. Sometimes a deathbed transfer might be made because the parent does not have a will, and thinks the lifetime gift is a good way to take the place of a will.

First, probate is not that much trouble, at least in Georgia. Also, a deathbed will is just as easy to prepare as a deed, for example. But the real problem for the beneficiary relates to the tax basis of the property.

For lifetime gifts, the grantor’s tax basis (generally the original cost of the property) becomes the tax basis of the grantee/beneficiary. For property received by a beneficiary thru the probate process (a so-called “testamentary gift”), the beneficiary’s tax basis is the fair market value of the property at the time of the decedent’s death.

For example: Assume a parent purchased a lake home years ago for $25,000. Now the lake property is worth $175,000. The parent makes a lifetime gift of the lake home to a child. The child’s tax basis is $25,000 (the original cost of the property). Upon a sale of the property for $175,000, the child’s tax gain is $150,000.

Instead assume the child received the lake home after the parent’s death thru the deceased parent’s will. The child then sells the property for $175,000. The child’s tax gain is zero, because the child’s tax basis is $175,000 (the fair market value at the time of the parent’s death). Assuming the above example, the difference between a lifetime gift and a testamentary gift could be a tax difference of as much as $60,000! So beware. A lifetime gift can result in a lot of needless tax.

Oftentimes, there are many factors involved making the best decisions about making lifetime gifts or setting up an estate plan which minimizes or diminishes any unwanted or unforeseen tax consequences. Needless to say, it is well worth the savings and peace of mind to find out before it’s too late.
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In my practice as an estate attorney in Atlanta, Georgia, I am often asked about the benefits of having a will. A will is a tool used to distribute an individual’s assets after that person has deceased. As with everything in life, you need a different tool for different jobs. Therefore, if you have made a will and it has been sometime since it has been up-dated or reviewed by an estate planning attorney; perhaps it is time for you to have a lawyer review your plan.

As time passes, state and federal laws change and usually our situation in life changes along with it and we accumulate more assets than what we started with. Too many people make a will and then put it in their safety deposit box and forget about it.

A will can be changed at any time. If the change is minor, it can be done with a document called a codicil, which is an amendment to the will and is usually kept with the original will once it is signed. If the changes are significant, then a new will should be prepared and it will void any previous will dated before it.

Your will should be reviewed on a regular basis every few years to make sure that the estate plan that was utilized in making the will is still the correct plan for you. At The Libby Law Firm, LLC your estate plan will be reviewed by our experts to ensure that the distribution of your assets upon your death will go smoothly with as little expense as possible.
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As a Georgia guardianship lawyer, I often in our Atlanta, GA, Buckhead and Midtown law offices we receive calls from distressed family members wanting to establish a guardianship for a loved one. Of course, many guardianships are established for young adults because of mental deficiencies or unfortunate accidents; but, the greater number of adult guardianships are established for elderly family members.

Unfortunately, most people wait until a family crisis has occurred before they decide to investigate the options that are available to them. The ideal time to speak with an attorney would be before an individual is incapacitated, in a hospital, in a coma, unable to care for themselves, suffering from dementia or Alzheimer’s, or their bills are remaining unpaid. When a person is deemed to lack sufficient capacity to make or communicate significant responsible decisions concerning his or her health or safety, it is time for that person’s friends or family to take the appropriate action to protect their loved one.

The initiation of a guardianship is not only an expensive proceeding but it is a very emotional time for both family and friends. Many times hard feelings are made not only by the proposed ward but also by other family members and the ward’s friends.

Although the circumstances surrounding the need to establish a guardianship vary, the procedure remains the same. In Georgia the Court requires that a petition be brought by either one petitioner and a physician, psychologist, or licensed clinical social worker, who will submit an evaluation of the proposed ward based upon an examination within fifteen days prior to the filing of the petition; or two petitioners.

If the Court accepts the petition, it will assign a physician, psychologist, or licensed clinical social worker to evaluate the proposed ward and file their report with the Court and a hearing will be set.
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