What is the most misunderstood element of estate planning? In our experience, the answer hands down is the revocable living trust.
Why is there so much confusion surrounding revocable living trusts, or RLTs? One of the main reasons is simply a widespread misunderstanding and ignorance of estate planning in general. Estate planning, like filing taxes or taking out a loan, is one of those life tasks most people will need to do, but are never taught how to do it. There is no class in school dedicated to the ins and outs of preparing your Will or Trust and planning for the distribution of your assets, leaving most people to learn about estate planning on their own, be it through the internet or from peers.
This leads to the second main reason for confusion surrounding RLTs: misinformation. Many people get their information about estate planning in general and RLTs specifically from Google searches and friends and family. The internet is a valuable resource when educating yourself on estate planning, but it comes with pitfalls. For example, there is the danger of relying on a source, be it a legal website, a news article, or even an attorney, who claims expertise in the subject, but in actuality is not educated on the specifics of estate planning and is doling out inaccurate advice—and not always unintentionally. The truth is revocable living trusts are a more expensive planning option than a Will-based plan and are sometimes pushed as necessary when a Will could suffice.
While friends and family likely aren't trying to sell you on an RLT for personal gain, you shouldn't accept their advice without doing your research. We have many clients call us wanting a trust because their brother, cousin, or best friend told them they need an RLT. Our first question is usually, “Where do they live?” Often, the person advising them to get an RLT is from out of state—this is key. While, generally, all estate planning documents are valid in all states, the probate laws and systems do vary across the country. In some states, probate is a complicated process that most people want to avoid; therefore, RLTs are the normative estate plan in that state. In Georgia, however, this is not the case, and most people do not need an RLT simply to avoid probate.
Make no mistake, in some situations RLTs make a lot of sense for our clients, and there are valid reasons to use RLTs as part of your estate planning. But, an RLT is not the right tool for each person's needs and goals. Know that you have options when it comes to estate planning in Georgia.
If you're considering an RLT for your estate plan, make sure to do your research. At Peach State Wills and Trusts, we can help you evaluate your situation and determine which planning tools are right for you. For more information on RLTs and estate planning in Georgia, give us a call at (678) 344-5342.