A living trust is popular among the estate planning tool. A properly written and funded living trust can offer advantages both before and after death. During your lifetime, you can continue to live in your home, spend your money and live as you normally would. After your death, your beneficiaries receive your assets without going through probate. Avoiding probate is probably the main reason why a living trust is so popular. Below explains a few things you will need to know about a living trust before you include a living trust as part of your estate plan. This article is for educational purposes only.
What is a living trust under Georgia law?
A trust is an legal agreement between three parties: the grantor (also commonly referred to as trustor or settlor), the trustee, and the beneficiary. The grantor is the individual who creates the trust agreement. The trustee is the person or entity responsible for managing the grantor’s property in the trust. The beneficiary or beneficiaries are people or entities receive the benefits of the property in the trust.
A “living trust,” also sometimes called an inter vivos trust, is simply a trust that is created and goes into effect during the lifetime of the grantor, rather than at death of the grantor. A trust goes into effect after the grantor’s death under the terms of a will is called “testamentary trust.” A living trust may be “revocable” or “irrevocable.” The terms of a revocable living trust can be changed or revoked at any time after the trust is created. On the other hand, an irrevocable trust cannot be changed or revoked after the trust commences. Once you transfer your property into an irrevocable trust, you cannot take it back.
A grantor can choose a third person as a trustee, or may act as the trustee himself or herself. If a grantor name itself as trustee of a living trust during its lifetime, it is important to have a “successor trustee” in place to step in and take over management of the trust if the grantor is determined to be mentally incapacitated or deceased. If the grantor becomes mentally incapacitated, the successor trustee can then manage the grantor’s finances and the assets that have been placed into the trust. At the grantor’s death, the success trustee can step in and distribute the remaining assets to the beneficiaries according to the instructions included in the trust’s formation documents. Without the successor trustee, the court will name a guardian to take over the grantor’s financial affairs when the grantor is unable to.
How to create a living trust in Georgia
To make a living trust in Georgia, you must create a trust document and sign the document in front of a notary public. The trust document contains the name and address of both the grantor and the trustee, a list of property along with the name of the person the grantor wishes it to be conferred upon and the name of the person who will inherit the property placed in the trust. Be sure to take enough time to consider what is best for you and your loved ones. Once you signed and notarized your trust document, you must transfer your property (in other words fund your trust) to the name of the trust. To do this, you must physically change the titles of your property from your individual name to the name of your trust, and change most beneficiary designation to your trust. You should carefully consider what type of assets you own and what will need to be done to get your assets funded into a living trust.
Advantages of using a living trust under Georgia law
The main advantage of making a living trust is to avoid probate on your assets. Probate is the court-supervised procedure which gathers a deceased person’s assets and distribute them to creditors and inheritors. So if you die without a will or trust, your assets are distributed through probate system which may not be divided the way you want them to be. But if you transfer all of your assets to a living trust, there is no assets to be transferred through the probate process. Georgia has not adopted the Uniform Probate Code (UPC) which is a set of probate laws that aims at simplifying the probate process. Therefore, it may be a good idea for you to make a living trust to avoid Georgia’s probate process.
Another advantage of a living trust is that you can control of your assets during your life and after your death. You can control what happens to your property after you die. In the trust, you can specify how your beneficiaries receive your assets and set up dates or conditions for disbursement. By creating a living trust, you can also plan for an unfortunate situation. If you ever become mentally incapacitated, the trust will provide for management of your assets.
Disadvantages of using a living trust in Georgia
One of the drawbacks to using a living rust is that even if you have created a living trust, you will still need a will. A will provides a backup plan for any of your property that is not transferred into your trust. Say, for example, you acquire new property and forget to add it to your trust before you die. That property will not pass under the terms of the trust document because a living trust can only control assets that have been placed into it. If there is no will, any property that is not transferred to your living trust will distributed by the court according to Georgia intestacy law without taking your wishes into consideration.
Another drawback is that funding a living trust can be cumbersome and difficult. You will need to contact your banks, investment and insurance companies, and transfer agents to change the title of ownership and update beneficiaries. You will also need to sign and record new deeds for real estate.
Whether a living trust is right for you will depend on your unique circumstances. Consultation with a attorney can always be a good option. After you have decided to create a living trust, it is advised to hire an attorney who is experienced in estate planning. Please keep in mind that a poorly drafted trust can sometimes be worse than no trust at all.
Getting Help with Your Georgia Trust Case
If you have questions or need help with a trust setup under Georgia law, call us at 770-609-1247 to discuss your case. We have helped hundreds of clients and can evaluate your situation to see what course of action is best for you. Contact >>
