The Hive Law - Estate Planning - Wills - Trusts

Living Trust Georgia | Set Up A Georgia Living Trust

Living Trust In Georgia - Revocable And Irrevocable Living Trust

A living trust is a legal document created by the grantor during their lifetime. 

This estate planning tool allows the grantor to transfer their assets into the trust.

These assets are managed by a trustee for the benefit of designated beneficiaries. 

Trustees of living trusts are either:

  • the person who created the living trust
  • a family member
  • our law firm (many clients want us to manage their trusts)

A living trust enables the grantor to:

  • maintain control over their assets 
  • make changes to the trust

It also provides a streamlined and private process for distributing assets.

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What Is The Purpose Of A Living Trust?

The primary purpose of a living trust is to provide a well-organized and efficient way to manage and distribute assets during the grantor’s lifetime and upon their death. 

Key purposes of a living trust include:

  1. Probate Avoidance: A living trust allows the assets held within it to bypass the probate process. This saves time and money and maintains privacy for the grantor’s estate.
  2. Control and Flexibility: The grantor can maintain control over the trust assets during their lifetime. And they can retain the ability to make changes or revoke the trust as needed.
  3. Privacy: Unlike a will, which becomes a public record during probate, a living trust remains a private document. This keeps the details of the estate and distribution confidential.
  4. Incapacity Planning: In the event the grantor becomes incapacitated, a living trust allows for seamless management of assets by a named successor trustee, without the need for a court-appointed conservator or guardian.

Read More: What Is A Living Trust In Georgia?

What Does A Living Trust Do?

A living trust serves as a legal arrangement to manage, protect, and distribute assets for the benefit of designated beneficiaries. 

The main functions of a living trust include:

  1. Control During Lifetime: The grantor, acting as the trustee or appointing another individual as trustee, manages the trust assets during their lifetime, providing flexibility and control over the assets.
  2. Flexibility: The grantor can make changes to the trust, add or remove assets, or even dissolve the trust during their lifetime, allowing them to adapt the trust to changing circumstances or wishes.
  3. Probate Avoidance: Upon the grantor’s death, the assets held in the living trust are distributed directly to the named beneficiaries without going through the time-consuming and public probate process.
  4. Privacy: A living trust keeps the details of the grantor’s estate and the distribution of assets confidential, as opposed to a will, which becomes a public record during probate.
  5. Incapacity Management: If the grantor becomes incapacitated, a successor trustee named in the trust document can step in to manage the trust assets, ensuring the grantor’s needs are met without the need for a court-appointed conservator or guardian.

Revocable vs Irrevocable Living Trusts In Georgia

You can set up either a revocable or irrevocable living trust in Georgia. 

So, let’s look at the differences between them.

Control And Flexibility

  • Revocable Trust: The grantor retains control over the assets and can modify or terminate the trust during their lifetime. This flexibility allows the grantor to adapt the trust to changing circumstances or wishes.
  • Irrevocable Trust: Once established, the terms of an irrevocable trust generally cannot be altered, amended, or revoked by the grantor. The grantor gives up control over the assets, making the trust more permanent and less flexible.

Asset Protection

  • Revocable Trust: A revocable living trust offers limited protection from creditors during the grantor’s lifetime, as the assets are still considered part of the grantor’s estate.
  • Irrevocable Trust: An irrevocable trust provides a higher degree of asset protection. Since the grantor no longer controls the assets, they are usually not considered part of the grantor’s estate, protecting them from creditors’ claims.

Tax Implications

  • Revocable Trust: A revocable living trust does not inherently provide tax benefits, as the income generated by the trust is still taxed to the grantor during their lifetime. However, it can be structured with other estate planning tools to minimize estate taxes.
  • Irrevocable Trust: Irrevocable trusts can provide tax advantages by removing the assets from the grantor’s taxable estate. This can help minimize or avoid estate taxes, gift taxes, and generation-skipping transfer taxes. Additionally, irrevocable trusts can be structured to minimize income taxes on trust income.

Probate Avoidance and Privacy

Both revocable and irrevocable trusts:

  • allow for the avoidance of probate 
  • provide privacy

The trust assets are distributed directly to the named beneficiaries.

(Without going through probate court.)

And the trust documents remain private.

How To Set Up A Living Trust In Georgia

Let’s talk about how to set up a living trust in Georgia. 

Setting up a trust in Georgia involves:

  • creating a written trust agreement
  • naming a trustee
  • transferring assets to the trust

Fill out the form on this page to ensure your trust:

  • is properly established 
  • complies with Georgia law 

Here are the general steps for setting up a trust in Georgia:

  1. Determine The Type Of Trust: Decide whether you want to create a revocable or irrevocable trust based on your financial and estate planning goals. A revocable trust can be changed or revoked during your lifetime, while an irrevocable trust is more permanent and typically cannot be altered once it is established.
  2. Choose A Name For The Trust: Select a name for your trust. It should be unique and easily identifiable.
  3. Draft The Trust Agreement: Work with an estate planning attorney to draft a trust agreement, which is a legal document outlining the terms of the trust, including the names of the grantor (you), the trustee, and the beneficiaries. The trust agreement should also specify the trustee’s powers and duties, as well as any specific instructions regarding the distribution of trust assets.
  4. Select A Trustee: Choose a trustee to manage the trust. The trustee can be an individual or a corporate entity, such as a bank or our law firm (yes, we offer trustee services). The trustee is responsible for managing the trust assets, making distributions to beneficiaries, and ensuring the trust is administered according to the trust agreement.
  5. Fund The Trust: Transfer assets into the trust by re-titling them in the name of the trust with a quit claim deed (we do this for you). This may include real estate, bank accounts, investments, and other assets.
  6. Obtain A Tax Identification Number: If your trust requires a separate tax identification number (EIN), apply for one through the IRS. Some trusts, such as revocable living trusts, can use the grantor’s Social Security number.
  7. Keep Records: Maintain accurate and up-to-date records of the trust’s assets, income, and distributions. The trustee is responsible for filing any required tax returns and providing beneficiaries with regular accountings of the trust’s activities.
  8. Review And Update The Trust: Regularly review your trust agreement to ensure it remains aligned with your financial and estate planning goals. If you have a revocable trust, you can amend or revoke the trust as needed to accommodate changes in your circumstances or wishes.

Read More: The Biggest Mistake Parents Make When Setting Up A Trust Fund

Living Trust Benefits And Disadvantages

In this section, let’s talk about:

  • what are the benefits of a living trust
  • what is the downside of a living trust

Advantages Of A Living Trust In Georgia

A living trust in Georgia offers several benefits to all parties. 

Some of the advantages of a living trust in Georgia are:

  • Avoidance Of Probate: One of the primary advantages of a living trust is that it allows your estate to avoid probate in Georgia, which can be time-consuming, expensive, and public. Assets in a living trust are distributed directly to the named beneficiaries without going through probate court.
  • Privacy: A living trust is a private document, unlike a will in Georgia, which becomes a public record during the probate process. With a living trust, the details of your estate and its distribution remain confidential.
  • Control During Lifetime: The grantor, who creates the living trust, can also serve as the trustee, maintaining control over the trust assets during their lifetime. This allows the grantor to manage, invest, or use the assets.
  • Revocability: A living trust is revocable, meaning the grantor can change the trust terms, add or remove assets, and even dissolve the trust during their lifetime. This flexibility allows the grantor to adapt the trust to changing circumstances or wishes.
  • Management During Incapacity: A living trust can provide a seamless transition of asset management if the grantor becomes incapacitated. The successor trustee, named in the trust agreement, can step in to manage the trust assets and use them for the grantor’s benefit without needing a court-appointed guardian or conservator.
  • Simplified Estate Administration: By consolidating assets into a living trust, estate administration becomes more streamlined and organized, making it easier for the trustee or successor trustee to manage and distribute the assets.
  • Potential For Reduced Estate Taxes: While a living trust does not inherently offer tax benefits, it can be structured in conjunction with other estate planning tools to minimize estate taxes, especially for married couples.

Now that we know the advantages of a living trust, let’s look at the disadvantages.

What Are The Disadvantages Of A Living Trust In Georgia?

A living trust in Georgia has some disadvantages you should be aware of. 

The disadvantages of a living trust are:

  • Initial Costs: Setting up a living trust typically involves higher upfront costs compared to creating a simple will, as it requires more complex legal documentation and assistance from an estate planning attorney.
  • Funding The Trust: The grantor must actively transfer assets into the trust, which can be time-consuming and may require additional legal assistance, especially for more complicated assets like real estate.
  • Ongoing Management: The grantor, acting as the trustee, is responsible for the ongoing management of trust assets, record-keeping, and tax filings, which may be more involved than managing assets outside a trust. Many people opt to let our law firm manage their trusts for them. 
  • Limited Creditor Protection: A living trust does not provide significant asset protection from creditors during the grantor’s lifetime, as the assets are still considered part of the grantor’s estate.
  • No Immediate Tax Benefits: A living trust generally does not provide immediate tax benefits, as the trust’s income is still taxed to the grantor during their lifetime. However, it can be structured in conjunction with other estate planning tools to minimize estate taxes.
  • Probate May Not Be Entirely Avoided: If some assets are not transferred into the trust, they may still be subject to probate. Additionally, a “pour-over will” may be necessary to transfer any remaining assets to the trust upon the grantor’s death, which would still require probate.
  • Not A Complete Estate Plan: A living trust is only one part of a comprehensive estate plan. Additional documents, such as a will, power of attorney, and healthcare directives, are typically needed to address all aspects of an individual’s estate planning needs.

How Much Does A Living Trust Cost In Georgia

The cost of setting up a living trust depends on several factors, like:

  • the complexity of the trust
  • the attorney’s fees
  • the assets being transferred into the trust

The cost of a living trust varies between $1,500 – $5,000+.

Here’s what affects how much a living trust costs in Georgia:

  • Attorney’s Fees: The majority of the cost of setting up a living trust comes from attorney’s fees. For a simple living trust, you might expect to pay anywhere from $1,000 to $3,000. And more complex trusts could cost upwards of $5,000 or more.
  • Trust Funding: Transferring assets into the trust, such as real estate, may require additional legal assistance and fees, particularly for preparing and recording deeds. These costs can range from a few hundred to over a thousand dollars, depending on the number and type of assets involved.
  • Trustee Fees: You can apply to have our law firm be your trust’s trustee and manage your trust for you. Our trustee fees are percentages based on the market value of the assets in the trust.  
  • Miscellaneous Costs: There may be additional costs associated with setting up a living trust, such as notary fees, postage, and document preparation fees.

FAQs About A Living Trust In Georgia

Does A Living Trust Become Irrevocable Upon Death?

Yes, a living trust becomes irrevocable upon the grantor’s death, meaning it cannot be changed after that point.

What Happens To A Living Trust After Death?

After death, a living trust:

  • Bypasses probate
  • Distributes assets to beneficiaries
  • Is managed by a successor trustee

What Should You Not Put In A Living Trust?

You should not put the following in a living trust:

  • Retirement accounts (401k, IRA)
  • Life insurance policies
  • Vehicles with loans
  • Certain jointly-owned assets
  • Tax-advantaged college savings plans

How Do You Fund A Living Trust?

To fund a living trust, you need to transfer your assets into the trust. Here’s how:

  1. Create a trust document: Work with an attorney to draft a trust document, appoint a trustee, and name beneficiaries.
  2. Change the title of assets: For assets like real estate, vehicles, and bank accounts, change the title or ownership to the name of the living trust.
  3. Transfer financial accounts: Inform your bank or financial institution about the living trust and follow their procedures to retitle the accounts in the trust’s name.
  4. Update beneficiary designations: For assets like life insurance policies and retirement accounts, update the beneficiary designations to the living trust.
  5. Transfer personal property: Create a document called an “Assignment of Personal Property” to transfer items like furniture, jewelry, and artwork to the trust.

Set Up Your Living Trust

If you want a living trust, fill out the form on this page. 

One of our attorneys will reach out to you to chat about the assets you want to protect. 

Talk soon. 

 

Get A FREE Consultation!

We run out of free consultations every month. Sign up to make sure you get your free consultation. (Free $350 value.)

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