Creating a trust and creating the right trust to meet your needs are two different things. The first step in creating a trust is to understand your goal for the trust so you can ensure that the terms of the trust document will meet those goals and comply with Georgia laws as well as applicable federal laws.
The most popular trusts in Georgia are revocable living trusts set up to avoid probate, so we will take a look at those first.
When the Goal is to Avoid Probate
Probate is the court-supervised process of distributing someone's property after they pass away, and ensuring that debts are paid properly and that the right people receive property remaining after obligations are satisfied. The law requires the executor of the estate to fulfill a number of different requirements through the court, so the process can be confusing, costly, and time-consuming.
When people put their assets in a revocable living trust, they can help their loved ones avoid the hassle, delay, and expense of probate. At the time of death, instead of going into an estate that must be probated, the property in the trust passes directly to alternate beneficiaries after debts are paid.
To create this type of trust, you need to have a trust agreement drawn up that establishes you as the primary beneficiary and primary trustee, with alternate beneficiaries and trustees who will take over when you pass away. Then you need to transfer ownership of property into the trust, unless it passes directly through a beneficiary clause, joint ownership, or some other means.
It is also a good idea to include language that allows your alternate trustee to step in and manage trust property if you become legally incapacitated.
Trusts to Accomplish Other Goals
To accomplish many other trust goals, you will need to establish an irrevocable trust that meets particular legal requirements. For example, if you want to set up a special needs trust to provide benefits for a loved one without interrupting their eligibility for government benefits such as Medicaid and SSI, you need to follow the federal and state specific requirements for these programs. The trust terms would need to limit the way funds are distributed so that they are not counted as income or assets for eligibility purposes.
You can also include trust provisions in your will to set up a trust that essentially remains dormant until you pass away. A will has no legal effect until your death.
In particular, parents with minor children often add provisions to their wills that create a trust to hold property for their children if the parents pass away before the child reaches a certain age. People also establish testamentary trusts to accomplish other purposes, such as providing for the care of a pet.
Peach State Wills & Trusts Can Establish a Trust with the Right Provisions to Meet Your Needs
Trusts carry serious legal consequences, and an irrevocable trust cannot be changed or revoked. That means it is essential to understand the terms of your trust before you execute the trust agreement and transfer property into it.
Advice and assistance from an experienced attorney are highly recommended. You don't want loved ones relying on trust documents that officials refuse to accept as valid. And you certainly don't want to be stuck with trust terms that restrict the use of your property in ways you never intended.
At Peach State Wills & Trusts, we work with you to understand your needs and help you determine whether a trust is your best option. Then we prepare trust documents and counsel you on funding the trust so that you can feel confident that the trust will achieve your objectives now and in the future. Call us today at 678-730-2079 for more information.