Scroggin & Burns, LLCScroggin & Burns, LLC2026-05-21T17:11:17Zhttps://www.scrogginlaw.com/feed/atom/WordPress/wp-content/uploads/sites/1101486/2021/09/cropped-fav-icon-32x32.jpgOn Behalf of Scroggin & Burns, LLC<![CDATA[3 ways an irrevocable life insurance trust saves you estate taxes]]>https://www.scrogginlaw.com/?p=2481932026-05-21T17:11:17Z2026-05-21T17:11:17ZWhat is an irrevocable life insurance trust?
An ILIT is a trust that takes ownership of your life insurance policy. When you set one up, you transfer control of the policy to the trust. This arrangement makes the trust both the owner and the beneficiary of the policy. With the trust holding ownership, the death benefit stays outside your taxable estate. For high-net-worth families in Georgia, this is one of the most effective tools available in estate planning.
3 ways an ILIT shields your wealth against estate taxes
Understanding what an ILIT is only tells part of the story. The real value lies in how it protects your family's wealth from estate taxes. Here are three specific ways an ILIT works in your favor:
It removes the policy from your taxable estate: When the trust owns the policy instead of you, the death benefit no longer counts as part of your estate, which means your heirs keep the full payout without losing any of it to estate taxes.
It makes use of annual gift tax exclusions: You can contribute cash to the trust to cover premium payments and those contributions qualify under the annual gift tax exclusion, so you fund the policy without touching your lifetime gift tax exemption.
It provides tax-free liquidity for your estate: The trustee can use the death benefit to pay estate taxes or purchase illiquid assets such as real estate or a family business directly from your estate, shielding your heirs from the pressure of a rushed sale.
Together, these three advantages make an ILIT a powerful strategy for preserving what you have built.
Secure your family’s wealth for the future
Estate planning is ultimately about making sure the people you care about receive the support and security they deserve. An ILIT can be a meaningful part of that plan, but every family's financial situation is different.
Hence, understanding your options is the first step toward making informed decisions about your estate. With the right guidance, you can build a strategy that minimizes your tax burden and keeps your legacy in the hands of those who matter most.]]>On Behalf of Scroggin & Burns, LLC<![CDATA[Are buy-sell agreements taxable events in Georgia?]]>https://www.scrogginlaw.com/?p=2481592026-02-19T15:57:24Z2026-02-19T15:57:24ZBuying or selling business ownership can affect more than control of your company. It can also reduce your profits if taxes cut into the deal.
A buy-sell agreement can help manage ownership changes and protect business stability. Still, tax rules at the federal level and in Georgia can affect the money you keep when ownership transfers.
When ownership transfers may create tax exposure
Signing a buy-sell agreement usually does not create taxes, but some funding methods or incentives may trigger tax consequences before a sale.Taxes generally arise when ownership interests change hands. Federal law often treats transfers as capital transactions. Georgia starts with federal taxable income, then applies state adjustments and credits. Ownership changes often trigger tax consequences in situations such as:
Retirement or voluntary sale of ownership interests
Death of an owner and transfer to heirs or partners
Disability that forces ownership buyouts
Transfers funded through life insurance proceeds, which can affect tax treatment and basis if transfer-for-value rules or exceptions apply
Installment payment buyouts that spread income over time
Transfers to family members or trusts that may require gift-tax reporting
Valuation also plays a major role. Outdated formulas or unrealistic pricing can cause disputes or tax challenges. Federal and Georgia authorities may also review valuations during transfers.
How agreement design can influence overall tax efficiency
The agreement’s structure can affect how much money you keep after a transfer. For example, cross-purchase structures often give better tax basis advantages. On the other hand, entity redemption structures may lead to different cash flow and tax results.Federal rules may also allow some heirs a step-up in basis to lower future capital gains. If a buy-sell forces redemption, the estate receives cash. Though Georgia does not have a state estate tax, state income taxes may still apply.Agreement funding also affects liquidity. Insurance-funded agreements may help cover costs, but policy structure can affect tax treatment. Installment buyouts may spread taxes and extend financial risk.Regular reviews help you adjust agreements as business value or tax laws change. Coordinated planning ultimately helps protect company and personal wealth.
Protecting deal value requires coordinated planning
Buy-sell agreements help protect business continuity and owner relationships. They can create layered tax effects if not planned carefully. With legal counsel, reviewing agreements alongside broader tax and succession plans can reduce costly surprises and help preserve the value you built.]]>On Behalf of Scroggin & Burns, LLC<![CDATA[This valuable resource shouldn’t be addressed in a will]]>https://www.scrogginlaw.com/?p=2481572025-11-15T21:47:55Z2025-11-15T21:47:55ZLife insurance providers control policy payout
Contrary to what many people might expect, a will is not an appropriate place to provide instructions regarding the distribution of life insurance proceeds. Although a will is a testamentary instrument that carries significant weight in probate court, certain resources are under the control of outside parties during estate administration.
That is generally the case for life insurance proceeds. The insurance company has a contract with the policyholder. They file a document that explains who should receive the funds from the policy when the policyholder dies. Although testators can certainly clarify what they have already designated with their life insurance company in a will, they cannot dictate what happens with the policy in their will.
The unfortunate reality is that many people attempting to draft or update their own estate planning documents might be unaware of this fact. If their will contradicts the documentation maintained by the insurance company, the prior beneficiary designation they filed with the company is what determines the beneficiary of the policy.
Policyholders may need to make a point of updating their wishes with their insurance providers when they make any other significant changes to their estate plans or their families. In some cases, those with sizable life insurance policies might even use the funds from the policy to fund a trust. Doing so can give them more control over the use and distribution of policy proceeds after their passing.
Life insurance can be an important component of an estate plan, even if the estate planning documents don't control who receives the payout from the policy. Creating and routinely updating an estate plan can help people provide for their loved ones and leave a positive legacy.]]>On Behalf of Scroggin & Burns, LLC<![CDATA[How do people keep their assets out of probate court?]]>https://www.scrogginlaw.com/?p=2481552025-08-24T14:56:32Z2025-08-24T14:56:32ZBy taking on co-owners
Generally speaking, the property that belongs directly to an individual becomes the property of their estate when they die. Testators can protect certain assets by extending co-ownership rights to their chosen beneficiaries while they are still alive. People can add family members and other intended beneficiaries as co-owners to real property and bank accounts.
Provided that they follow the appropriate steps, the co-owners can potentially assume ownership of the asset without it passing through probate court first. In the scenarios where individuals do not want to take on co-owners while they are alive, making transfer-on-death arrangements can be an option for a number of valuable assets.
By funding a trust
People who wish to protect their assets often create a trust to hold those resources. Trust can protect assets from creditor claims and estate recovery efforts. They can diminish the taxable value of an estate to protect testators from estate taxes.
They can even help people qualify for Medicaid benefits if their health declines as they age. The assets held by a trust no longer belong to the party funding the trust. Therefore, they are not part of the estate that passes through the probate courts.
There may be other solutions available as well, depending on the property a testator wants to protect. Creating an inventory of assets and a list of estate planning goals may make it easier for people to create robust plans that preserve their resources and uphold their wishes.]]>On Behalf of Scroggin & Burns, LLC<![CDATA[What taxes do people need to consider when estate planning?]]>https://www.scrogginlaw.com/?p=2481532025-05-29T19:15:11Z2025-05-29T19:15:11ZWhat taxes apply during probate?
There are several types of taxes that can influence estate administration and diminish the value of an estate. Thankfully, Georgia does not currently impose any direct taxes at the state level.
There is no state estate tax to cover. Regardless of how much the property that belonged to the deceased individual is worth, the state does not impose any estate tax obligations. Similarly, the beneficiaries of the estate do not need to worry about paying a Georgia inheritance tax based on the value of the resources they receive from the estate.
However, there could potentially be federal estate taxes to address. Those who have experienced professional success or who own high-value resources, including businesses and real property, may find that the total value of their assets puts their estates at risk of federal estate taxes.
For those who pass in 2025, the federal threshold for estate tax exemption is $13.99 million. Estates worth more than that could be subject to taxes adding up to between 18% and 40% of the overall estate value.
Income taxes can also be a consideration. The personal representative of the estate may need to file an income tax return on behalf of the decedent and cover any remaining income tax obligations using estate resources.
If the estate plan requires the liquidation of assets through an estate sale or a real estate listing, then the estate itself may owe income taxes as well. Any time the sale of assets produces $600 or more in revenue, the personal representative may need to cover income taxes based on the value of the items sold.
Proper estate planning can go a long way toward minimizing the loss of resources to taxes after an individual dies. Identifying the taxes that could apply and proactively planning to minimize them can help people pass as much property as possible to their loved ones rather than to the government after they die.]]>On Behalf of Scroggin & Burns, LLC<![CDATA[Tax tips that parents should put to good use]]>https://www.scrogginlaw.com/?p=2481262025-03-06T03:56:08Z2025-03-06T03:56:08ZRaising children is a significant financial responsibility. A very small silver lining in this regard is that parenthood also provides valuable tax benefits that parents can take advantage of when filing their returns. Understanding which deductions, credits, and tax strategies apply to families can help parents minimize their tax liability and maximize their refunds. Perhaps most obviously, claiming federal and state Child Tax Credit (CTC) opportunities is one of the most significant tax benefits available to parents. For eligible children under the age of 17, parents can claim a credit that directly reduces their tax bill. The credit amount and income thresholds change periodically, so parents should check the latest IRS and state tax updates to determine how much they qualify for.
Less obvious tax “wins” for parents
Parents with low to moderate income may qualify for the Earned Income Tax Credit (EITC), which can provide substantial relief. The credit amount depends on income level and the number of children claimed as dependents. Since the EITC is refundable, it can increase a family’s tax refund, helping parents cover essential expenses.For parents who pay for child care so they can work, look for a job, care for other loved ones, etc. the Child and Dependent Care Credit can offer significant tax savings. This credit covers a percentage of qualified child care expenses for children under the age of 13. Expenses for daycare, babysitters and certain summer camps may qualify, but parents should maintain receipts and documentation to support their ability to claim this benefit.When it comes to educational expenses, parents should consider 529 plans, which allow tax-free growth on contributions when used for qualified education expenses. Additionally, parents who pay college tuition or related expenses may qualify for the American Opportunity Tax Credit (AOTC) or the Lifetime Learning Credit (LLC), both of which can reduce the cost of higher education.Finally, single parents may benefit from filing as Head of Household, which provides a larger standard deduction and potentially lower tax rates compared to filing as Single. To qualify, the parent must have a dependent and cover more than half of the household expenses.To better ensure that they claim all eligible deductions and credits, parents should keep organized records of expenses, tax forms and any correspondence related to their children’s upbringing. Should questions arise, seeking personalized legal guidance is always an option. ]]>On Behalf of Scroggin & Burns, LLC<![CDATA[3 times estimated quarterly tax payments may be necessary]]>https://www.scrogginlaw.com/?p=2481242024-12-03T19:05:41Z2024-12-03T19:05:41Zestimated quarterly tax payments. Every year, they must pay money directly to the federal government and the state based on their likely income tax obligations. These quarterly payments are due in April, June, September and January of the following year.
What scenarios make people responsible for quarterly estimated taxes?
1. Self-employment
Independent contractors who fill out a 1099 instead of a W-2 are responsible for their own income taxes. With exceptions for the first year where they work as independent contractors, self-employed professionals typically need to make quarterly tax payments and then pay any remaining balance due when they file their annual income tax return.
In addition to paying quarterly, they can also expect to pay a somewhat higher amount in taxes because the companies or people who hire them to provide services do not contribute to employment taxes.
2. Business ownership
Those who run businesses or professional practices typically need to make estimated quarterly tax payments. They must make payments on behalf of the business in addition to any personal obligations that they may have if they are also self-employed.
3. Irregular income sources
Perhaps a successful professional has made significant financial investments and received dividend payments for their stock holdings. Maybe someone with a salary also has income from renting out a duplex.
Those with irregular income or sources of income other than traditional employment may need to pay estimated quarterly taxes. Anyone who might theoretically owe $1,000 or more in income taxes when they file their return likely need to pay estimated quarterly taxes in addition to their annual income taxes.
Seeking professional guidance about complex income tax matters can make a major difference for those with unusual income tax obligations. Taxpayers who secure appropriate support are less likely to make mistakes and oversights that lead to audits, penalties and tax controversies.]]>On Behalf of Scroggin & Burns, LLC<![CDATA[3 expenses that take priority over beneficiaries during probate]]>https://www.scrogginlaw.com/?p=2481212024-08-29T10:54:06Z2024-08-29T10:54:06Zcurrent probate statutes, numerous financial obligations take priority over inheritance rights beyond coverage for a single year of living expenses.
Probate expenses
Probate expenses may include the cost of legal representation for the personal representative and the cost of time in probate court. The cost of estate administration is a priority debt during probate proceedings. A personal representative usually needs to cover those probate costs before any other major financial obligations owed by the decedent.
Tax obligations
The personal representative of the estate may need to file a tax return and make a final income tax payment on behalf of the decedent. If the estate is worth millions of dollars, they may also need to handle estate tax obligations. If they liquidate or sell estate resources, the estate itself may have income tax responsibilities. Those taxes typically require payment before the distribution of property to beneficiaries.
Personal debts
Medical expenses from end-of-life care, credit card balances and even the remaining amount due on student loans may require payments using the resources in the estate. Typically, any creditors that make valid claims against estate resources receive payment before the final distribution of assets to beneficiaries of the estate.
Estate administration can lead to liability for a personal representative if they don't handle obligations in the correct order or distribute property before handling financial obligations. As such, beneficiaries and representatives may benefit from learning more about the financial priorities of an estate during the probate process.]]>On Behalf of Scroggin & Burns, LLC<![CDATA[How much of your estate may go to taxes?]]>https://www.scrogginlaw.com/?p=2481172024-06-04T00:27:22Z2024-06-04T00:27:22ZSome taxes consume a lot of estate resources
There are multiple different taxes that may apply to an estate depending on its overall value and what happens with estate resources. If the personal representative of a Georgia estate sells the state property, the estate may be responsible for income taxes. The decedent may also have some income taxes due after their death.
Filing tax returns on behalf of the estate and the decedent could lead to thousands of dollars in tax obligations. Those taxes are unlikely to have a major impact on a sizable estate. However, larger estates might be at risk of estate taxes.
The good news for testators thinking about their estate plans is that Georgia does not impose either estate taxes or inheritance taxes. The bad news is that federal estate taxes could still diminish the value of the estate.
If someone has $13.61 million or more in their estate, federal estate taxes may be due before beneficiaries receive their inheritances. The tax rate that applies depends on how much the estate exceeds that limit. The lowest applicable tax rate is 18%, but some estates may have to pay as much as 40% in Federal taxes. Given how much of someone's legacy could end up wasted on tax obligations, planning to minimize those taxes could be a smart move.
There are a variety of different tax strategies that people can employ when creating or updating an estate plan in Georgia. Addressing the potential impact of estate taxes proactively can help people provide the most substantial and meaningful legacy possible given their personal holdings.]]>On Behalf of Scroggin & Burns, LLC<![CDATA[What should you know about irrevocable trusts in estate planning?]]>https://www.scrogginlaw.com/?p=2481152024-03-12T12:50:33Z2024-03-12T12:50:33ZIrrevocable trusts are one category of these estate planning tools. Once you establish and fund an irrevocable trust, you can’t change the terms or void the trust without the permission of the beneficiaries or the court. In exchange for that loss of control, you’ll benefit from several advantages.
Tax advantages
Irrevocable trusts offer significant tax benefits. By transferring assets into an irrevocable trust, these assets are no longer considered part of the grantor's estate for tax purposes. This transfer can lead to a reduction or even elimination of estate taxes upon the grantor's death. An irrevocable trust allows individuals to mitigate the impact of these taxes, potentially saving a substantial amount in estate tax liabilities.
These trusts can also provide income tax benefits. In some cases, the income generated by assets within the trust may be taxed at a different rate than if the income were to accrue directly to the grantor. The specific tax implications depend on the trust's structure and the type of assets involved.
Asset protection and control through irrevocable trusts
Another critical benefit of irrevocable trusts is their asset protection. Since the assets transferred into the trust aren’t owned by the grantor, creditors and legal judgement typically can’t access them. This makes irrevocable trusts an effective tool for individuals concerned about potential future lawsuits or creditors, as it ensures that the assets intended for beneficiaries are preserved.
Irrevocable trusts allow grantors to set terms for the distribution of the assets after the grantor’s death. This is particularly beneficial for individuals who wish to specify conditions or milestones to be met before beneficiaries can access their inheritance. This level of control helps ensure that the grantor's wishes are carried out exactly as intended, even after their death.
An irrevocable trust is only one potential part of a comprehensive estate plan. Working with a legal professional to establish an estate plan helps ensure that everything is handled lawfully and in ways that meet an individual’s needs.]]>