What Are The Basics Of Living Trusts For Georgia Residents?

At Peach State Wills & Trusts, we often receive questions about living trusts. As estate planning lawyers in Georgia, we understand that living trusts can be complex and overwhelming. However, understanding these trusts is crucial for anyone looking to secure their estate and ensure a smooth transition of assets. Let's explore the basics of living trusts and how they can benefit Georgia residents.

What Is a Living Trust?

A living trust, also known as a revocable trust, is a legal document allowing you to place your assets into a trust while alive. You have complete control over these assets and can alter or revoke the trust anytime. Upon your death, the assets in the trust bypass the probate process and are distributed directly to your beneficiaries. Think of the living trust as a suitcase in which you pack and organize your assets to allow them to be easily managed by you, or someone else in the case of your death or incapacity.

Benefits of a Living Trust

Living trusts offer several advantages:

• Avoiding Probate: One of the most significant benefits of a living trust is that it allows your estate to avoid probate, a court-supervised process that can be lengthy and expensive.

• Privacy: Unlike wills, which become public records, a living trust remains private. This ensures that the details of your estate and the distribution of your assets are not disclosed to the public.

• Control Over Your Assets: With a living trust, you retain control over your assets during your lifetime. You can manage, invest, and spend your assets as you see fit.

• Incapacity Planning: A living trust can, and should, include provisions for managing your assets if you become incapacitated. This ensures that your finances are handled according to your wishes, without the need for a court-appointed guardian.

Creating a Living Trust in Georgia

First, you need to draft the trust document, a legal document that establishes the trust and outlines its terms, including how the assets will be managed and distributed in a variety of possible scenarios. Next, you must fund the trust by transferring ownership of your assets, such as real estate, bank accounts, investments, and personal property, into the trust. Naming a trustee is another crucial step; the trustee manages the trust assets. You can serve as the trustee during your lifetime, and you will also need to name a successor trustee to manage the trust after your death or if you become incapacitated. Finally, it is important to regularly review and update your trust to ensure it reflects your current wishes and circumstances.

Types of Assets to Include in a Living Trust

Almost any type of asset can be placed in a living trust, including:

• Real Estate: Homes, rental properties, and land can be transferred to the trust.

• Bank Accounts: Checking and savings accounts can be retitled in the name of the trust.

• Investments: Stocks, bonds, and mutual funds can be included in the trust. Importantly, your qualified retirement accounts (IRAs, 401(k)s, 403(b)s etc., stay in your name while you are alive. 

• Personal Property: Valuable personal items, such as jewelry, artwork, and antiques, can be transferred to the trust.

• Business Holdings: Your ownership of small businesses such as LLCs and corporations may also be placed in a living trust as well.

Choosing a Trustee

Choosing the right trustee is crucial for the effective management of your trust. Here are some considerations:

• Trustworthiness: The trustee should be someone you trust to manage your assets responsibly.

• Financial Acumen: The trustee should have the skills to manage your assets effectively.

• Availability: The trustee should be available to manage the trust and handle the associated responsibilities.

• Professional Trustees: If you do not have a suitable individual to serve as a trustee, you can appoint a professional trustee, such as a bank or trust company.

What's the difference between Living Trust vs. Will?

While both a living trust and a will are tools for estate planning, they serve different purposes. A key difference is that a will must go through probate, a court-supervised process, while the assets inside a living trust avoid probate. Additionally, a will becomes a public record, meaning the details of your estate and some information about asset distribution are accessible to the public. In contrast, a living trust remains private, protecting your information from public scrutiny. Furthermore, a living trust can provide for the management of your assets if you become incapacitated, ensuring your finances are handled according to your wishes without court intervention. On the other hand, a will only takes effect after your death and does not offer any provisions for managing your assets during your lifetime.

Common Misconceptions About Living Trusts

Many believe that setting up a living trust is prohibitive, as it can be more expensive upfront than a will. However, a living trust can save money in the long run by avoiding probate costs. Another common misconception is that living trusts are overly complex. While they can seem daunting, with professional guidance, setting up and managing a trust can be straightforward. Additionally, some people mistakenly think that living trusts offer unique tax benefits. In reality, a living trust does not provide special tax advantages; it is primarily a tool for efficiently managing and distributing your assets.

How Peach State Wills & Trusts Can Help

Peach State Wills & Trusts is committed to helping you understand and establish a living trust that meets your needs. Our team will guide you through the process, ensuring your trust is set up correctly and your assets are protected.

Contact Peach State Wills & Trusts at 678-344-5342 or online to learn how to plan for your future in Georgia today. If you have any questions about estate planning in Georgia, you can download our free guide here; no strings are attached. We're dedicated to providing friendly, professional, and approachable legal services to help you with all your estate planning needs.