What is a trust?
A living trust, also called a revocable living trust (RLT), is a trust that you establish during your lifetime to direct the distribution of your assets after your death. Note that a living trust is different than a testamentary trust, which a part of your Will and only created after your death.
How does a trust-based estate plan work?
A trust-based estate plan consists of an RLT, a Will, a power of attorney, and an Advanced Directive for Healthcare. The trust is created during your life and it is funded. Funded means that you move your assets into the trust so that the trust owns the assets instead of you. For assets that may not have been moved over into the trust, you have a Will, commonly called a ‘pour over' Will, that essentially states that any assets held outside of the trust will be ‘poured over' into the trust after your death. Then, the trust will control how your assets are held, used, and distributed. The trust-based plan avoids the probate process with respect to distribution of your assets, apart from assets that have to be transferred into the trust through your pour-over Will.
Do I need a trust?
You may have heard, perhaps from friends and relative in other states, that everyone needs a trust. However, in our opinion, that is not the case for most people in Georgia. In some states, the time and expense of probate is such that most people prefer to avoid it by using a trust in their estate plan. However, the probate process in Georgia is comparatively easy and efficient, and thus a trust is not needed simply to avoid probate. Having said that, there can be several good reasons why a trust-based plan is a good choice for you.
So, why might I want to use a trust?
Though we don't believe it is necessary for everyone in Georgia, there are certain situations in which an RLT may be beneficial:
- Blended families: A trust can be a good option in blended family situations. A trust allows the trust-maker to ensure that a spouse is provided for after the trust-maker's death and assets are left to his or her children from a prior marriage.
- Privacy concerns: Some people want to minimize the probate court's involvement in their estate and maintain a certain level of privacy with regards to the distribution of their assets. A trust allows for this, as the trust generally remains private and avoids the probate process.
- Asset protection: A trust can help shield your child's inherited assets from their creditors, or perhaps from his or her spouse in the case of a divorce.
- Planning for future incapacity: A trust can also be beneficial when anticipating future incapacitation, illness, or disability of the trust-maker. The trust would bypass the need for conservatorship and allow the trust-maker to grant the Successor Trustee broad powers to carry out his or her wishes.
- Out-of-state property: If you own property in other states, where the probate process may not be as simple as in Georgia, a trust may be a helpful tool for you so that an ancillary probate proceeding in another state can be avoided.
How do I know if a trust is right for me?
At Peach State Wills and Trusts, we want to help you build the plan you need and avoid unnecessary documents—and costs. We will discuss your situation, goals, and concerns, and help you decide if a trust-based plan if best for you and your family.