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Revocable Living Trust
A Revocable Living Trust (often referred to as a “Living Trust”) is a legal document similar to a Will in that it controls the disposition of your assets upon your death. A Living Trust is a Trust that is set up while you are alive. A Trust set up after you pass away is a Testamentary Trust. Unlike Living Trusts, Testamentary Trusts do not avoid probate. (A Will that discusses a Trust is likely a Testamentary Trust.) A Revocable Living Trust is one that you can change.
The Revocable Living Trust is a popular estate planning tool for the following reasons:
Avoids Georgia probate (saving your loved one’s hassle, time, and money).
Typically, when a person passes away (with or without a Last Will and Testament), your loved ones cannot simply jump in and start collecting your assets. Probate is a court-supervised legal process used to validate your Will, collect your assets, value your estate, settle debts, pay various taxes, and oversee the distribution of your assets to your heirs. Even if everyone involved agrees to everything, the probate process can be time-consuming and can quickly get expensive, leaving fewer assets for your beneficiaries to inherit.
A Revocable Living Trust avoids this probate process, which saves your loved one’s hassle, time, and money. When you pass away, the person you choose to be in charge (called your “successor Trustee”) can immediately distribute the assets to your beneficiaries according to your instructions.
Avoids probate for out-of-state property
The Georgia Probate Court cannot transfer out-of-state real estate to your beneficiaries. This means if you own real estate in Georgia and out-of-state, your loved ones will have to go through a Georgia probate and an additional probate in the state where you own that real estate.
A single Revocable Living Trust can avoid probate in multiple states for people who own out-of-state real estate.
Protects against challenges
If someone contests your wishes, a Revocable Living Trust is typically more difficult to attack than a Will. Not only can this save the estate money, but it also protects your beneficiaries. While the possibility of a full-blown lawsuit exists in every case, some situations are more likely to lead to a lawsuit. For example, if you are disinheriting someone, have children from a previous marriage, are in a relationship with someone your relatives disapprove of, or are leaving assets to beneficiaries unequally.
Protects your privacy
During the probate process, your Will becomes public record. By staying out of probate, the Revocable Living Trust allows your wishes and the distribution of the assets to remain private.
Protects assets for your beneficiaries
The revocable living trust can work alongside other trusts to protect inheritances for your beneficiaries.
Simplifies asset management
A Living Trust is a convenient way to put multiple moving parts into one legal entity.
A Revocable Living Trust can be changed or revoked at any time. It is just as easy to change a Living Trust as it is a Will, and in some cases, it is easier to change a Revocable Living Trust than it is a Will. Additionally, you can name someone who lives out-of-state as the administrator after you pass away. This would be difficult to do with a Last Will and Testament.
No negative tax implications
You and your family pay no additional taxes with a Revocable Living Trust. The Revocable Living Trust does not need a separate tax identification number, nor must you maintain separate tax records. Trust income flows through the Revocable Living Trust to you personally, so you report it on your personal income tax returns.
No ongoing fees
The Revocable Living Trust does not involve ongoing fees. You can also add new assets to the Trust at any time. Our firm goes over how to do this with our clients, so there is no need to hire an attorney for future assets.
For more information or to speak with an experienced Georgia estate planning attorney, contact our office at (678) 784-4150.