In recent years, revocable living trusts have become increasingly common estate planning tools. In the right circumstances, revocable living trusts can be an extremely useful estate planning strategy. However, in other cases, revocable living trusts can be unnecessary or redundant – even counterproductive. In this article, we cover the common reasons someone might need a revocable living trust in Georgia. But first, let’s dispel a myth: the myth that probate is bad.
In some states, probate can be an expensive, time-consuming nightmare. However, in Georgia, probate is not “bad.” Georgia is known as an “easy probate” state. With a well-drafted will and the assistance of experienced Atlanta estate planning attorneys, probate can be relatively straightforward and inexpensive. If you want to ensure a smooth probate process and protect your loved ones from unnecessary stress, contact Trace Brooks Law today at (404) 492-9559 for knowledgeable guidance and support.
What is a Revocable Living Trust?
A revocable living trust is an estate planning device that can be beneficial for anyone who wants their assets to be managed efficiently both during their lifetime and after passing away. While there is a common misconception that only wealthy individuals can benefit from them, revocable living trusts can be a valuable part of any individual’s estate plan.
Contrary to a traditional will, a revocable trust offers a dynamic approach to asset management. As the trust creator or grantor, you can alter the trust provisions at any point, provided you have the mental capacity to do so. This includes the power to modify distributions, appoint or remove trustees, and adjust to current laws, maintaining control over your affairs.
During your life, you act as the trustee, managing the trust’s assets. This role comes with the flexibility to make all critical decisions regarding the trust’s administration. Should you become incapacitated, the trust is designed to seamlessly transition the management responsibilities to a successor trustee without the need for court intervention. This avoids the complexities and expenses of a conservatorship, simplifying financial management and investment decisions on your behalf.
Upon your death, the trust showcases its benefits by avoiding the probate process. Your assets can be distributed to your chosen beneficiaries according to the terms you’ve set forth, without the delays and public scrutiny that come with probate. At this point, the trust becomes irrevocable, solidifying your wishes and ensuring that no alterations can be made to the trust’s terms or beneficiaries.
However, a revocable living trust demands attention and maintenance. It functions effectively only when properly funded; hence, assets must be retitled in the trust’s name, and as new assets are acquired, they too should be incorporated into the trust. This active management ensures that the trust truly reflects your current asset portfolio and that your estate planning objectives are achieved.
Advantages of Using a Revocable Living Trust
Whether you have a well-drafted will or a pour-over will with a revocable living trust, the administration of your estate will require a similar effort. Ease of administration, however, is only one thing to consider when deciding if you need a revocable living trust. Several other advantages to using a revocable living trust as your primary estate planning document include:
- Privacy. When you die, your will becomes part of the public record. That means anyone can obtain a copy of your entire will – including who gets what and how they receive it. If you use a revocable living trust as your primary estate planning document, your pour-over will should simply give all your assets to your trust (which, upon your death, becomes irrevocable). Though your pour-over will would be part of the public record, your revocable living trust would not. This would keep the distribution of your assets private and out of the public record. This is especially important if you are considering leaving assets disproportionately or disinheriting a potential beneficiary entirely.
- Avoidance of out-of-state probate. Probate is required in each state where you own real property at death. As we noted previously, Georgia is known as an “easy probate” state (Georgia is, in fact, one of the easiest probate states). Out-of-state (or “ancillary”) probate can be frustrating, time-consuming, and costly – doubly so in a state with a complicated probate process. If you use a revocable living trust as your primary estate planning document, you can avoid out-of-state probate by signing a quitclaim deed from yourself to your revocable living trust.
- Simplicity in cases of incapacity. Powers of Attorney are the most common way to designate someone to manage your financial affairs if you become incapacitated. A revocable living trust allows for an easier transition of the management of your assets if you become incapacitated.
- Simplicity for blended families. Estate planning complications arise when one or both spouses have children from a prior relationship. Many of these complications can be avoided with the privacy of a revocable trust.
As you can see, there are many benefits to revocable living trusts. There are, of course, drawbacks: primarily initial cost and initial complication. Because of the additional legal work required to draft an effective pour-over will and revocable living trust, an estate plan using this strategy is often more costly upfront. Further, for a revocable living trust to be effective, assets must be retitled in the name of the trust. The proper retitling of assets can be complicated and time-consuming.
Finally, as the name suggests, revocable living trusts can be revoked or amended by the grantor – the creator of the trust – at any time (so long as the grantor is alive and has capacity).
| Advantages of Using a Revocable Living Trust | Description |
|---|---|
| Privacy | Maintain asset distribution privacy with a revocable living trust, especially for specific preferences or privacy concerns. |
| Avoidance of Out-of-State Probate | Prevent complications and reduce costs by avoiding out-of-state probate through property transfer to the trust. |
| Simplicity in Cases of Incapacity | Streamline asset management during incapacity with a revocable living trust. |
| Simplicity for Blended Families | Address estate planning complexities in blended families discreetly and reduce potential conflicts. |
Does a Living Trust Avoid Probate in Georgia?
In Georgia, creating a living trust is a recognized strategy to bypass the probate process for your assets. This approach applies to a variety of assets, including real estate, bank accounts, and vehicles. To establish a living trust, you must first draft a trust document, which functions similarly to a will. This document should appoint a successor trustee to manage the trust after your death.
The critical step in this process involves transferring the ownership of your assets into the trust, with yourself named as the trustee. This legal reassignment allows the trust to effectively manage the assets according to the terms outlined in the trust document.
Upon your passing, the successor trustee you’ve appointed will have the authority to distribute the assets directly to the beneficiaries named in the trust. This distribution does not require probate court intervention, thereby streamlining the process and avoiding the typical delays and expenses associated with probate.
Therefore, in Georgia, a well-managed living trust can be an efficient tool to avoid probate, ensuring a smoother, faster, and potentially less costly transition of assets to your beneficiaries.
An experienced Atlanta estate planning attorney can help you determine whether you should establish a revocable living trust or review your existing trust to ensure it remains effective and fulfills your wishes. contact the Atlanta estate planning attorneys at Trace Brooks Law today at (404) 492-9559 to schedule a consultation.
