Revocable living trusts and wills both allow you to name beneficiaries for your property. While having a will is important for everyone, depending on your assets and family situation, a revocable living trust may be a better for you than a will or vice versa. A revocable living trust allows you to avoid the probate process. On the other hand, living trusts are more complicated to make and you cannot use a living trust to name an executor or guardians for your children. However, this does not mean that a revocable living trust replaces a will. Rather, a living trust supplements a will and may be used in conjunction with a will to ensure that your overall estate plan is properly carried out. Below provides an overview of the difference between a will and revocable living trust in Georgia.
What is the difference between a Will and a Revocable Living Trust?
A will, also called a last will and testament, is a legally binding document that details how the testator (the person writing the will) would like his or her property and affairs to be handled upon death. It designates who will receive your property after your death, who will be the guardian of your minor children if any, and who will be the executor of your estate. At minimum, your will should appoint an executor to administer your estate and manage how to distribute your remaining assets to the intended beneficiaries or creditors. State laws governing wills are fairly uniform across all states: requiring the testator to be the age of majority and that the will be typed or printed. In Georgia, you do not need to notarize your will to make it legal. To finalize your will, you must also sign your will in front of two (2) or more competent witnesses, and the two witnesses must sign your will. A will must be formally acknowledged as valid by an appropriate court before it will be allowed to take effect. This process of having the will acknowledged as valid is called the “probate” process. If a will is formally acknowledged by the court as valid, it will take effect at death.
A revocable living trust, often just called a living trust, is a document in which you name a trustee to manage any assets you actually transfer to the living trust during your lifetime. It is referred to as a living trust simply because you create the trust while you are alive rather than creating it at your death under the terms of your will. You can be the trustee of your own living trust and keep full control over any assets the living trust owns during your lifetime. To make a living trust in Georgia, you creates the trust document in which you designate who will inherit trust property (also called a beneficiary) and name the trustee. You must also sign the document in front of a notary public and transfer your property to the living trust. The revocable living trust takes effect as soon as it is singed (although assets must actually be transferred to it before it becomes effective). Unlike a will, there is no formal acknowledgement process (i.e., the probate process) required for a living trust. Upon your death, any assets transferred to the living trust can be death with immediately. However, if you fail to ensure that your assets were transferred to the living trust during your lifetime, then such assets may have to go through the probate process.
Which is better: a Will or a Revocable Living Trust?
As mentioned above, a revocable living trust may be used in conjunction with a will. Even if you have a living trust, you may need a will to dictate how your assets not covered by the trust (because you failed to transfer the assets) distributed. These additional assets are typically covered by a pour-over will (a special type of will to cover unfunded assets and “pour” them into the trust). Nonetheless, a will and a living trust perform different functions and depending on your financial and family circumstances, you may prefer one over the other as the primary estate planning tool. It is therefore import ant to know the pros and cons of a will and a living trust.
Wills are typically the more basic document and generally are more simple, inexpensive and legally unbound than living trusts. In general, it will cost more time and money to set up and fund a revocable living trust that it will to write a will. Revocable living trusts can cost money up to one thousand dollars ($1,000) depending on the complexity of the situation. Also, transferring your assets to a trust can be both time-consuming and complicated. If you hold a variety of assets, you will need to contact your different banks and agents to have everything you own moved over. With a will, you do not have to worry about re-titling any of your assets.
Advantages of a Revocable Living Trust in Georgia
For many people, the biggest advantage of using a revocable living trust is that they can avoid the probate proceeding which can be time consuming and costly. If you own property in more than one state, it is particularly important to have a trust and avoid probate in multiple states. Most state laws require real estate to go through probate in which the property is located and without a trust, your family members will be faced with two ore more probate proceedings. Unless there are problems with your estate, probate may not be as expensive, complicated or time-consuming as most people think. While some states have fairly complicated probate laws, in Georgia with a well drafted will the probate process is relatively simple and inexpensive. So, having to undergo probate procedures in Georgia may not be that bad. However, Georgia has not adopted the Uniform Probate Code and there could still be some difficulty or complexity involved.
A revocable living trust is more appropriate for those who want privacy because a trust does not become a public document like a will. Probate is a public proceeding which means that anyone can go to the courthouse and take a look at each and every probate file being stored there. A revocable living trust, on the other hand, is not subject to public scrutiny and does not become a public record for everyone to see. A trust provides privacy on issues such as the name of an estate’s beneficiaries or the size of an estate.
Advantages of a Last Will and Testament in Georgia
Additionally, a will can be used to name guardians of minor children who will be left parentless by the death of the individual. A living trust cannot designate a guardian of your minor children in the even you and your spouse pass away. If you have minor children, therefore, you need to do additional planning such as including a designation of guardian in a pour-over will.
Based on your specific needs and circumstances, you should decide whether a revocable living trust is appropriate for you or not. Revocable living trusts are not for everyone, whereas for most people, having a will is a good idea. Nevertheless, the advantages of creating a revocable living trust may outweigh the disadvantages depending on your personal preferences and situations. Be sure to thoroughly consider all of the various factors (pro and cons of each) and apply to your particular situation, before you make a decision. If you have any questions or concerns, you should consult with an experienced attorney in your area.