If you’re a Georgia resident, and you want to create a complete estate plan that will support your financial goals and protect your loved ones, a Georgia living trust may be a good option.
Individuals and families commonly use living trusts to avoid probate, protect their privacy, and ensure the financial security of their loved ones.
So let’s talk about creating a living trust in Georgia — what it is, why you’d want to do it, and how to go about it.
What is a Georgia living trust?
The basic elements of a living trust are the same, no matter what state you live in.
A trust is a legal agreement made between two parties for the benefit of a third party. The legal agreement is a contract that manages assets. And a living trust, also known as an inter vivos trust, is one that’s active while you’re still alive.
Here’s how it works: If you decided to create a living trust, you’d be the grantor. That’s what the legal system calls the person who creates the trust. You’d appoint a trustee who would manage the trust and a successor trustee who would take over when the trustee dies. And you’d appoint a beneficiary (or multiple beneficiaries). That’s the person or entity that receives the assets you place into the trust.
With a living trust, you’d generally name yourself as the trustee (so you’re the grantor and the trustee). You would also likely be the lifetime beneficiary of the trust, thus holding all the roles. That way, you have control over all the assets in the trust and can use them for your own benefit until you die. At that point, the successor trustee takes over, and the assets are used for the benefit of your beneficiaries.
See: Which Trust is Right for You?
Benefits of a living trust in Georgia
For most people, the biggest benefit of setting up a living trust is probate avoidance.
Why would you want to avoid probate?
Well, for starters, it’s a long and tedious process. Everything in the probate record is available to the public. It can be costly. And it’s a hassle for loved ones that are already grieving.
Sometimes people have the mistaken impression that trusts are only useful for very wealthy individuals and families.
That’s not the case when you think about the benefit of probate avoidance — especially in Georgia. Many estates have to go through probate even if the deceased individual wasn’t rolling in cash. Assets owned by the deceased have to be transferred by probate unless there is another specific legal mechanism for transfer, such as joint ownership with right of survivorship.
Georgia doesn’t have a small estate exemption for probate. It does have simplified procedures for certain estates that meet a few requirements. The person must have died without a will, the estate must have no debts, and all the heirs must agree in writing on how to distribute the assets.
If you’re looking ahead to the future and want to have some say in how your assets are distributed, then you probably want to have at least a will. (And we agree — that’s a good idea.) So your loved ones won’t be able to use simplified procedures and would have to go through probate unless you set up a living trust.
There are other benefits of having a living trust in Georgia:
- Privacy. Everything that happens in a Georgia probate court is a part of the public record. That includes the will and any other documents that are filed as part of the probate proceedings. Many people decide they don’t want their family affairs (including financial information) to be available to the public. Trusts are private legal agreements, so the information they contain is not open to public viewing.
- Automatic transition of authority. For an executor named in a will to begin handling the affairs of the estate, they must get authorization from the probate court. If there was no will, the court must appoint an administrator to manage the estate. Both of these processes take time and can leave a gap when there is no one able to manage and protect assets or talk to creditors. But the successor trustee of a trust has the authority to take over immediately on the trustee’s death or incapacity.
- Protected inheritance for minors. A minor (anyone under 18) in Georgia cannot receive more than $25,000 in money or property without a conservator being appointed to manage the funds on their behalf. Once they turn 18, they get full access to the funds. However, if the money or property has been placed in a trust, the trustee automatically manages the funds on behalf of the minor. And the trust can be drafted to keep the funds in trust for longer — perhaps until the minor turns 25 or 30 and is more able to maturely manage their finances.
See: Is There a Difference Between Setting Up a Trust for Grandchildren or Children?
Creating and funding a living trust in Georgia
A Georgia estate planning attorney will help you set up a living trust and transfer assets into it. They’ll also help you do any ongoing management or maintenance of the trust to ensure it stays up to date and funded with the correct assets.
While the estate planning attorney draws up all the paperwork, they do need some important information from you.
- Who you’ll name as a beneficiary. Your attorney can provide guidance if you’re struggling to choose a beneficiary. And if the person you’ve chosen is a minor, your attorney will help you decide how to structure the trust for their best benefit.
- What assets will go into the trust. Any assets that aren’t in the trust could be subject to probate. However, certain types of automatically transferring assets aren’t appropriate for inclusion in the trust — like some retirement accounts, including IRAs.
- Who you want as successor trustee. The successor trustee will have automatic authority to take over management of the trust when you die or if you become too ill or incapacitated to manage it yourself. They’ll have a fiduciary duty to act in accordance with the terms of the trust.
See: Creating a DIY Living Trust? Here’s Why It’s a Terrible Idea
Your attorney will also work with you to fund the trust. That means that any assets you place into the trust must be transferred from your ownership to the trust’s ownership. For instance, a house placed in a trust would no longer be titled under the purchaser’s name. It would be titled to the trust.
If assets are not titled in the name of the trust, they are subject to probate just like they would be if you’d never created a trust.
Otherwise, the assets are subject to probate just like they would be if you’d never created a trust.
If assets didn’t make it into the trust before the grantor’s death, those assets can be handled in Georgia with a pour-over will goes through probate. Any property in the pour-over will briefly goes through probate and then gets passed through the trust.
Developing a thorough estate plan in Georgia requires careful planning, but the investment is well worth it. You get the peace of mind that your assets and your loved ones are protected.
If you’re ready to get started, schedule a phone or video consultation online. We can help you decide if a living trust is right for you.
