A living trust in Georgia is a legal arrangement where you place your assets into a trust during your lifetime. They can be managed and distributed according to your wishes, and you may serve as your own trustee. Living trusts may be revocable or irrevocable.
While there are some benefits to a living trust, it is not the best option for everyone. Depending on how it is set up, you may sacrifice stronger asset protection for the ability to make changes during your lifetime.
Our estate planning lawyers in Woodstock can help you understand your options. For more than a decade, we have served Georgia families and helped them through difficult legal issues. Call today to schedule your free Legacy Planning Meeting.
How Does a Living Trust Work?
A revocable living trust is a flexible estate planning tool you can change or cancel at any time. You place assets such as your home or investments into the trust, typically managing them yourself as the trustee. If you become incapacitated, the successor trustee you have named takes over administration of the trust.
After your death, the trust allows your assets to be distributed to your beneficiary, bypassing the probate process. This means a faster, smoother transfer of property and a continuity in the management of your affairs, all while giving you full control over your lifetime.
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What Is a Revocable Vs. Irrevocable Living Trust?A revocable trust is a trust you create that you can change or revoke at any time as long as you are mentally competent. These types of trusts allow flexibility and control, as you effectively act as your own trustee.
An irrevocable trust generally can’t be changed once it is created. You transfer assets into the trust, and you give up ownership and control over those assets. These trusts are a smart option for asset protection and Medicaid planning.
Nelson Elder Care Law offers a better option called the Absolute Protection Trust™. This offers the strong asset protection qualities of an irrevocable trust in conjunction with the ability to make changes as necessary.
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What Are the Fiduciary Requirements for a Living Trust?
In Georgia, a trustee is considered a fiduciary, which means they must act in the best interest of the trust beneficiaries. Their legal duties require them to:
- Act in good faith and with loyalty to beneficiaries
- Manage trust assets carefully
- Keep accurate records
- Avoid conflicts of interest
- Follow the terms of the trust document
Georgia’s trust laws govern the actions of trustees, including duty of care, impartiality, and transparency.
Does a Living Trust Avoid Probate in Georgia?
While you will still need to file a will with the probate court, a properly funded living trust avoids probate in Georgia. Assets transferred into the trust during your lifetime are not considered part of your probate estate when you pass away.
However, any assets not in the trust may still need to go through probate. This is why it is important to consult with an estate planning attorney to make sure assets are properly titled in the name of the trust.
What’s the Difference Between a Living Trust and a Will?
A living trust and a will are both important estate planning documents, but they are for very different purposes.
- A living trust takes effect during your lifetime and can manage assets if you become incapacitated, as well as allow assets to pass to beneficiaries without going through probate.
- A will takes effect only after your death and must go through probate before assets are distributed.
A will names an executor to carry out your wishes, and allows you to name guardians for minor children.
What Is a Pour-Over Will?
A pour-over will is a type of will used along with a living trust. It makes sure any assets not transferred into your trust during your lifetime are moved into the trust after you pass away.
These assets may still go through probate before transferring to the trust; however, the pour-over makes sure your overall estate plan is consistent.
What Are the Downsides of a Living Trust?
While some people may find a living trust useful, they also have drawbacks. These include higher upfront costs and greater complexity than a basic will. They require retitling assets, and revocable trusts do not have automatic tax benefits or credit protection.
For some estates, the disadvantages may outweigh the benefits. Talk to our estate planning attorneys to discuss other options, such as our Absolute Protection Trust™.
Let Us Help With Your Estate Planning Needs
A living trust can help you protect assets from probate, but it isn’t the right legal tool for everyone. Our team can help you put together an estate plan that meets your needs and protects what you have earned over your lifetime.
Nelson Elder Care Law has served thousands of Georgia families and assisted with important estate planning decisions. Call today to schedule your Legacy Planning Meeting to tell us about your goals and challenges.
