Your Guide to Creating a Living Trust: Georgia Laws & More
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Living Trust Georgia: The Basics
A living trust in Georgia can be used to manage your assets, avoid probate, and limit delays and expenses in case of your incapacity or death. Learn more here.
Author: Stan Faulkner, Founder, Perigon Legal Services, LLC
Mr. Faulkner is an experienced counselor and litigator with 15 years of experience, having held bar licenses in four states (Mo, Il, Ct and Ga). Stan Faulkner uses this experience and focuses his skills in the pursuit of assisting individuals in probate (trust and estate) matters, guardianships and conservatorships, estate planning, business disputes and contract disputes. Published on January 09, 2021.
A living trust is a legal document that transfers ownership of your assets into a trust where you can continue using them until they are transferred to your beneficiaries after death.
It is a crucial estate planning tool that ensures your final wishes are met. People often use living trusts to avoid the complex probate process after death or even plan for the possibility of becoming mentally incapacitated before death.
The living trust can either be revocable or irrevocable, and it goes into effect while you’re still living. There are four major roles in a trust – both revocable and irrevocable.
- Grantor: Also known as the settlor, this is the original owner of the property and estate placed in the living trust, and is the person who creates the trust.
- Trustee: A trustee is the manager of the grantor’s assets, responsible for distributing them upon their death.
- Successor trustee: A person appointed to manage the trust should the initial trustee become unable to do so (mental disability, death). This is necessary if the grantor is also the trustee.
- Beneficiaries: Person(s) the grantor has bestowed the assets in the trust to inherit after death.
Determining which type of trust is best for you is a big decision and one that requires the help of a skilled estate planning lawyer. If you are interested in creating a living trust in Georgia, read on or contact Perigon Legal Services today to begin building a comprehensive estate plan with a reliable living trust to accompany it.
What Is a Revocable Living Trust Georgia?
By far the most common type of trust in Georgia, a revocable living trust can be modified by the grantor if they wish to place additional items in trust or nominate new beneficiaries. It permits the grantor to also serve as the trustee, but it does not help avoid estate taxes because your ability to revoke or amend the revocable living trust causes your assets to still be includable in your estate.
However, in Georgia, most people do not have to worry about estate taxes because the federal estate tax is only levied on estates worth close to $12 million. Georgia also does not have its own estate tax. If you are interested in learning more about whether a revocable living trust is right for you, our attorneys are here to help you explore your options.
Benefits of a Living Trust in Georgia
In most states, the primary goal of a revocable living trust is to avoid having to go through probate. This is a relevant concern as probate is a time-consuming process with several costs and associated hassles. However, under state of Georgia probate law, the process is a relatively straightforward and inexpensive process when you have a properly-written trust document that names an executor.
A revocable living trust in Georgia is for those:
- Who plan to avoid conservatorship and guardianship in the event of future disability, seeing as the trust already provides management of your assets and use of them for your benefit;
- With very substantial estates;
- Who own property and assets in several different states;
- Who are very sensitive about privacy and wish that the beneficiaries of their assets remain confidential and not open to the public as would be the case with a will; and/or
- Who fear a contest to their will. With a revocable living trust where all assets are transferred before death, no estate goes through probate, and this no will to challenge.
While the above categories are relatively straightforward, determining if a revocable living trust is right for you is not always easy. When you meet with Atlanta estate planning attorney Stan Faulkner of Perigon Legal Services, you will be expertly guided through each of the pros and cons of revocable living trusts vs irrevocable trusts and the ways by which your estate planning choices may affect you and/or your loved ones in the future.
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What Is an Irrevocable Living Trust Georgia?
As its name suggests, all provisions established in the irrevocable living trust may not be reversed by the grantor. This trust type demands that the grantor transfers all ownership of their property and real estate to the living trust.
In turn, the trust provides certain benefits such as protection from estate tax (i.e in Georgia, if the estate is worth close to $12 million) or creditors’ claims. The grantor cannot alter any of the provisions within the trust. A revocable living trust turns into an irrevocable trust once the grantor dies.
Although there are only two types of trust, a great estate planning attorney can include certain clauses to establish conditions in the trust that align with the unique needs of both the grantor and their family members. For instance, a “spendthrift clause” prevents creditors from going after the fund after the grantor’s death and also bars beneficiaries from using the trust’s assets to pay off debts.
Trust vs Will in Georgia
Many people have heard the terms “trust” and “will”, but very few know the differences between the two. Both are useful estate planning tools that serve different purposes but can be used together to create a complete estate plan.
A will, also known as a Last Will and Testament, is a document that states who receives your property after your death with an appointed legal representative to execute your wishes. A trust, on the other hand, is a legal arrangement used to manage your property while alive and distribute it following your death.
One key difference between a will and a trust is that the former will only go into effect after your death while the latter takes effect and starts functioning after it is created.
- A will only covers properties that are in your sole name when you die. It does not cover assets held in trust or joint tenancy. It also does not cover properties that pass to a beneficiary by law such as life insurance policies or by contract. By contrast, a living trust covers, governs, and can distribute any property it’s been funded with. As a trust grantor, you transfer your assets into it, including life insurance policies and tenancy-in-common interests.
- A will passes through probate and the probate court oversees the entire process of ensuring the will is valid and distributing the property to living beneficiaries. A living trust allows you to skip this probate process, saving you time and money.
- Once a will goes through the probate process, it becomes a public record. But the terms of a living trust stays private.
- A will allows you to specify funeral arrangements and name a guardian for children, but a trust does not.
When you meet with the trusted Georgia estate planning attorneys at Perigon Legal Services, we will help you understand how each of these tools can benefit your estate planning and create a comprehensive plan to ensure that each covers all of your needs.
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Executing a Living Trust in Georgia Without a Complete Estate Plan
To prevent any issues when executing a living trust in Georgia, it is advisable to have a will as a backup to your living trust. Upon your death, the trust can only distribute what was titled in the trust.
If, for instance, you purchase a new property and don’t add it to your living trust before death, that property will not pass under the terms of the trust. A will can be used to appoint someone, such as a surviving spouse or another beneficiary, to inherit property that you haven’t left to a particular entity in your trust, which may allow them to avoid the probate process.
Without a will, any other assets not listed in the trust will pass through a type of probate process called intestate which is used when there is no will in place. This process is even more burdensome than the regular probate.
So, have your lawyer draft your will even if you have a trust. This type of will is known as the “pour over” will, meaning that any other asset(s) not included in your trust pours over into your trust to be administered accordingly.
Learn More About Georgia Living Trust Laws Today
To formally establish a living trust, it’s always best to consult an attorney. You want to make sure you work with an attorney who is experienced so that the irrevocable or revocable living trust accomplishes what you need it to. Otherwise, it could be challenged.
Don’t take this risk — contact the Georgia estate planning attorneys at Perigon Legal Services today to learn more about how we can help you. We have over 18 years of experience helping individuals and families in Atlanta, Georgia and surrounding counties accomplish their asset goals through responsible estate planning, and we can’t wait to assist you.
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