What Happens if You Don’t Set Up a Trust?

Without a properly funded revocable living trust, some assets may need to pass through Georgia’s probate process after death. Probate can involve court filings, administrative expenses, and public records, although the complexity and duration vary by estate. A trust can also provide continuity in managing trust-owned assets during incapacity and establish rules for how beneficiaries receive an inheritance. The financial power of attorney is another important tool for managing assets outside the trust during incapacity. For families with minor children, blended families, or real estate in multiple states, a trust may offer additional planning advantages. Whether a trust is appropriate depends on your assets, family circumstances, and estate-planning goals.

Many people know they should probably have a Trust, and yet most people still don’t have one. Here’s what happens if you don’t take action.

What Is a Trust Supposed to Do?

A Trust is a legal agreement between a Trustor and a Trustee giving instructions about how to handle assets owned by the Trust. I like to think of a Trust as an empty box. It’s a great container to hold things. And the Trust agreement tells you how the container works and how it handles anything inside the container.

There are typically four reasons people set up revocable living Trusts. A revocable living Trust (RLT) can avoid probate for properly transferred assets; it is private, has provision for what happens during incapacity, and it allows you to put guardrails in place for inheritance distribution. People choose an RLT because it is designed to prevent four things: probate, public record, court involvement during incapacity, and inheritance distribution at the wrong time or to the wrong person.

When a Trust is set up correctly and managed correctly, you get to avoid all of them. But often in my work I see the opposite. Instead, I see scenarios where a Trust is either funded improperly or never utilized at all. Let’s dig into some of the more common scenarios I see.

Scenario 1: You die without a Trust, and your estate goes through probate

I remember meeting with a client whose mother had passed away. She didn’t have a Trust, and her family came to me for help.

Probate in Georgia is a process. I sat with this wonderful family, and I explained what we would have to do:

• Locate the original Will
• File probate opening documents with the probate court
• Pay a filing fee [n1] 
• Have an executor appointed by court
• Hunt down every single asset
• Checking accounts (this may pass outside probate)
• Savings account (this may pass outside probate)
• IRAs (this may pass outside probate)
• CDs
• Life insurance policies (this may pass outside probate)
• Real estate deeds
• Vehicle titles
• Cryptocurrency 
• Jewelry
• Furniture
• Inventory every asset
• Make an accounting of every asset and debt
• Hunt down every debt
• Make notice of probate to creditors
• Wait for the court to issue letters before accessing estate funds to pay anything; depending on the Will’s provisions, some actions may also require court approval.
• File accounting with the court, unless waived within the Will
• File inventory with the court, unless waived within the Will
• Disburse every asset
• Close out probate

All of this is a full-time job that a grieving person has to do in addition to their actual full-time job. Currently probate takes anywhere from 6 months to 2 years in my county in Georgia. During the probate process some accounts may be restricted, but access depends on the account and the institution’s procedures. After the judge grants letters, the executor can access estate accounts, but it can take a while for this to happen.

Probate is a long, taxing, expensive scavenger hunt no one asked for. The probate proceedings are generally part of the public record, allowing members of the public to access documents filed with the court.

When a valid Will is provided, some of these steps can be simplified. But with a properly funded Trust, the court-related steps can be bypassed entirely!

The family I met with that day was daunted by what was ahead. And they later came back to me to set up a Trust so their children wouldn’t have to go through this long, painful process upon their passing.

Scenario 2: You become incapacitated without a Trust

Many people think that a Trust is not as helpful during incapacitation as it is after death, but they are actually mistaken. A Trust does not provide medical instruction to your doctors while you are incapacitated, but it does provide solutions for the financial function of your life.

When you set up a Trust, you also name a successor Trustee to step in and handle affairs for you if you become incapacitated or die. Your Trust also provides rules for how incapacity is proven. If you do become incapacitated and it is proven following those rules that person can now step in and receive access to your accounts. They can act in your stead and access any Trust-owned assets to ensure nothing is missed while you are unable to handle it. This means the electricity stays on because someone pays the bill. That real estate transaction that was scheduled can go through. Whatever it is, your Trustee can handle it.

You may be wondering why the person you named as executor in your Will can’t step in and do the same. A will generally takes effect at death and does not authorize an executor to manage your affairs during your lifetime. If you have a Will, but no Trust, a court may need to appoint a conservator to manage your assets.

The conservatorship process in Georgia is not easy or quick. To do this you must file a petition for conservatorship in probate court in the county the incapacitated person resides in. You must pay a filing fee. You must provide evidence for why a conservatorship is needed. A signed document from a medical provider who has examined the incapacitated person within the last 15 days may be required. Next, the court will appoint an attorney to act on behalf of the incapacitated person and will evaluate all evidence, including any evidence that the attorney provides. The family of the incapacitated will be notified, and the court will request a special evaluation by another medical provider. Eventually, there will be a hearing, and a judge will issue their ruling. After the conservatorship is granted, there are long-term burdens of bond, inventory, and annual returns which must be handled by the conservator. As you can see, this process is not quick or easy. 

But that process can be avoided through utilizing a Trust. Additionally, a power of attorney may authorize an agent to act on your behalf and can serve as a tool to avoid conservatorship. It also covers non-trust assets like IRAs. A Trust can provide continuity in managing assets owned by the trust if the grantor becomes incapacitated. The trust should specify how incapacity is determined and when a successor trustee may act. A durable financial power of attorney is also an important part of an incapacity plan because it may allow an agent to manage assets that remain outside the trust. Without effective planning, court-appointed conservatorship may become necessary.

Scenario 3: Your children inherit at the wrong time or in the wrong way

Without a Trust, an 18-year-old can receive an inheritance outright. A Will can also include a testamentary trust for children. How many 18-year-olds do you know who can handle a large chunk of cash or a valuable asset like a home without parental input? Even responsible 18-year-olds still can value some guidance.

When you set up a Trust, you are still that guiding force. You put guardrails around the inheritance. You determine how much is paid and at which ages, and you can also create rules for when access to funds is approved or not.

Sometimes minors are named as beneficiaries on a beneficiary designation form for life insurance or retirement accounts. If a Trust is not named and the life insurance is to be paid to a minor, this may require court involvement to name a conservator, unless the amount is under the threshold that is allowed to be paid out by a natural guardian. If a minor is named directly as the beneficiary of life insurance or a retirement account, a conservatorship or another arrangement for managing the funds may be necessary. Georgia law permits a natural guardian to receive and manage a minor’s personal property totaling $25,000 or less, under Official Code of Georgia Annotated (O.C.G.A.) § 29-3-1, without becoming a legally qualified conservator, subject to statutory requirements. A trust or properly structured custodial arrangement may provide another option.

Another potential solution for minor beneficiaries is a UTMA custodian.

Another consideration is when there is a blended family. If there is no plan in place, at least a portion of the assets pass to the surviving spouse. This may be your exact plan, but maybe not. Your surviving spouse may have different plans for the assets than you think. A Trust can really help provide clarity for who gets what after death 

Scenario 4: You Own Real Estate in Georgia Without a Trust

In Georgia, how real estate is transferred after a death depends on two things. First, how is the property titled? If it’s owned jointly with another person and the deed includes survivorship language, it passes automatically to the surviving owner. Without survivorship language, Georgia treats co-owners as tenants in common, and the deceased owner’s share goes through probate. Real estate in your name alone also goes through probate, unless you have recorded a transfer-on-death deed, which Georgia has permitted since July 2024. When a property goes through probate it can be frozen and the family may not be allowed to sell or transfer it until probate closes. If an Executor has letters, it is possible a property can be sold before the estate closes.

But when a property is held by a Trust, it is already owned by the Trust. There is no lag in ownership, and whatever needs to be done with the property can be done, as long as it aligns with the rules set forth within the Trust.

Keep in mind that if you own property in multiple states, each state requires its own probate proceeding. This can be avoided when the property is not owned by you, an individual, but rather by your Trust.

The most common reasons people don’t have a Trust

We hear a lot of reasons for why people don’t have a Trust yet. But the ones that come up the most are:

“I don’t have enough assets”. This is probably not true! If you own a home or have life insurance, you likely benefit from a Trust. But furthermore, if you are married, have children, or are a part of a blended family you probably need a Trust.

“I’ll do it later.” But will you? The time to plan is now. A Trust can’t help you when it’s in your head but not a legal reality. 

“It’s too complicated”. I know it can feel that way, but when you work with my team we make it easy. We get to know you, your goals, and the type of legacy you want to leave to your loved ones. Then we provide you with options that will help you reach those goals. We will guide you through the process.

No Trust in Georgia

Dying without a Trust in Georgia generally means probate for any assets that don’t pass by title, deed, or beneficiary designation. Having a Will does not change that; a Will is simply your instructions to the probate court. Probate is a long and tedious process. It can also be expensive. A Trust, when funded properly, avoids probate. This saves your loved ones from the time, emotional, and actual cost of probate.

Probate isn’t a bad thing. It’s good that it exists. But it’s great that Trusts can help you avoid it!

Do I need a Trust in Georgia?

If you are married, have children, are in a blended family, or own property, a Trust is probably the best estate planning tool for you. If you are single, have no children, and have a simple estate with no property ownership, a will-based plan can work well. But Trusts are generally best for most adults.

Consequences of no Trust

The consequence of not having a Trust is almost always probate. 

The consequences of probate are many: 

• Inefficient
• Long and drawn out
• Public
• Requires lots of paperwork
• More easily contestable
• Emotional toll from always having to deal with something
• Restricted assets

Probate is not bad. It exists to help people properly transfer assets from a deceased person to their legal heirs. It is designed to protect the deceased’s wishes and their legal heirs. But it is a difficult process. When a Trust is utilized and funded properly, probate and its consequences can be avoided altogether. At my firm, we love helping people sidestep anything that would cause more turmoil during an already emotional time.

FAQs

Does an average person need a Trust?

Yes. Trusts are for everyday ordinary people. If you have a spouse, children, a blended family, or property, a Trust can greatly benefit your estate plan.

Is there a downside to having a Trust?

If a Trust is not properly funded, it isn’t going to do what you think it will, which gives false hope. Trusts tend to cost more up front and require ongoing maintenance. Additionally, some irrevocable Trusts require you to give up control of your assets altogether. Other downsides include upfront cost and the work and effort of funding the trust, no creditor protection, no tax savings, and additional ongoing maintenance. But in general, a properly funded revocable living Trust has few downsides.

At what point does someone need a Trust?

If you own a home, are married, or have children, a Trust is likely the right choice for you. If you are in a blended family, a Trust is definitely a good choice. A Trust can mitigate a lot of issues before they ever arise, and it can save your loved ones a long, drawn-out court process.

Who needs a Trust instead of a simple Will?

Many people assume Trusts are only for the ultra-rich. In fact, many people who are not wealthy may benefit from a Trust, depending on their circumstances. Average people benefit from Trusts every day. If you have assets and descendants, a Trust is almost always the right call. Keep in mind that a Trust-based plan should always include a Pour-over Will to catch anything accidentally outside of the Trust. If you are single with no children and limited assets, then it is possible a Will can suffice. 

What happens if you don’t set up a Trust?

When you have a Will but not a Trust, all of your assets (that don’t pass through title, deed, or beneficiary designation) must pass through probate upon your death. This means that your estate, and potentially any family drama that comes out of it, becomes a matter of public records. Probate is also a long and costly process. Non-probate assets and small estates can also avoid probate.

Unsure if a Will or Trust is right for your family?

Don’t leave your estate to chance or force your loved ones through a long, public probate process. Download our Free Will vs. Trust Guide to compare your options, learn how a Trust protects your home and assets, and choose the right plan for your family’s future.

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