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An irrevocable trust is one of many types of trusts family members can create in Georgia.
An irrevocable trust is a trust that cannot get changed or canceled.
After the trust agreement gets signed, there is no going back.
It has a grantor, trustee, and trust beneficiaries.
When the grantor places assets into the trust, itâs a gift to the trust.
The grantor cannot revoke that action, according to state law.
But the grantor can determine the terms, rules, and uses of the assets in the trust.
An irrevocable trust is defined as a trust with terms that cannot get amended or revised.Â
A grantor (the settlor) is the individual that creates the trust agreement.
A trustee is a person who has the fiduciary responsibility of managing the terms of the trust.
This person is also the successor trustee.
This is who distributes the trust assets during the probate process.
Trust beneficiaries are usually family members for who the trust was created.
Irrevocable trusts in Georgia are set up for estate and tax purposes.
And for asset protection.
This is because they remove ownership from the grantor.
And it removes the assets from the taxable estate.
Also, the settlor no longer has to pay taxes on income generated from those assets.
Assets that can get held in an irrevocable trusts include:
Irrevocable trusts allow you to do things like:
There are several types of irrevocable trusts in Georgia.Â
Let’s go over them.
Related: Disadvantages Of A Trust
A generation-skipping trust is also known as a dynasty trust.Â
This type of irrevocable trust is a multi-generational trust.Â
It allows families to pass wealth from generation to generation.Â
And avoid taxes like gift taxes, estate taxes, or generation-skipping transfer tax.Â
But only as long as those assets remain in the irrevocable dynasty trust.Â
And generation-skipping trusts are irrevocable and their terms cannot get changed.Â
A bypass irrevocable trust allows you to avoid taxes on certain assets when your spouse dies.Â
When a spouse dies, their portion of the estate will go into the irrevocable trust.Â
The surviving spouse can still manage their property.Â
And they can even draw income from the property.Â
This is because they are typically the successor trustee.
And one of the trust beneficiaries.
But the surviving spouse does not own it because the trust owns that property.Â
This allows a spouse to pass their estate to another spouse and avoid estate taxes.Â
In Georgia, an irrevocable life insurance trust gets created to:
Irrevocable life insurance trust allows you to:
There are other types of trusts that an estate planning law firm can create.
These types of trust funds include:
Whatâs the difference between a revocable trust vs an irrevocable living trust?
The main difference is when they become permanent.
An irrevocable living trust cannot get changed once itâs signed.
Upon creation, the irrevocable living trust is permanent.
But a revocable trust can get altered up until the grantor dies.
Once the grantor dies, the revocable living trust cannot get altered.
Letâs talk about some potential disadvantages of irrevocable trusts in Georgia.
Irrevocable trusts cannot get modified, amended, or terminated.
That is unless all the grantorâs beneficiaries give permission to do so.
The next point can either be an advantage or disadvantage.
But, the grantor transfers all ownership of properties to the trust.
The grantor transfers all ownership rights of assets to the irrevocable trust.
There are three main advantages of an irrevocable trust in Georgia:
Taxes get minimized by eliminating estate taxes during probate.Â
And removing taxable assets from the estate that does go through probate courts in Georgia.Â
Letâs say you earn too much money from your assets to qualify for things like:
You can place your assets in an irrevocable trust so you no longer own those assets.Â
This means you will be able to qualify for government assistance.Â
But you can still earn income from your irrevocable trust.Â
Placing your assets in an irrevocable trust in Georgia protects you from creditors and lawsuits.Â
When you place assets into a trust, you no longer own those assets.Â
They are trust assets because irrevocable trust now owns those assets.Â
So, no one can come after you for your familyâs assets if they are in the trust.Â
And you can reduce your personal income tax consequences.
Because the trust assets are not in your name.
Irrevocable trusts are useful for people who are vulnerable to lawsuits.
This can be:
Once an asset gets transferred to the trust, the trust owns the property.
This makes the property inside the trust safe from lawsuits and creditors.
That is, when people are attacking the grantor.
Itâs hard to say which is better between a revocable or irrevocable trust.Â
Letâs look at some key takeaways between an irrevocable trust vs revocable trust:
A revocable trust turns into an irrevocable trust in Georgia when the grantor dies.Â
Usually, the grantor is also the trustee and the beneficiary of the revocable trust.Â
Upon the grantorâs death, the trust becomes irrevocable.Â
And the revocable trust can no longer get modified in any way.Â
And no one can add or remove assets once that happens.Â
Here is a link to all of the laws for the state of Georgia on irrevocable trusts.
An experienced Georgia estate planning law firm will be able to guide you through these.
Does a trust avoid probate or does trust go through probate still?Â
Yes, an irrevocable trust avoids probate in Georgia.Â
This is because the property gets placed inside the irrevocable trust.Â
And the grantor no longer owns the property.Â
It becomes the trustâs property.
So, the property does not need to go through the probate process to get passed to the heirs.Â
The trustee pays the property taxes in an irrevocable trust.Â
It is the trusteeâs responsibility to manage the trust assets in the irrevocable trust.Â
The trustee will use the trustâs funds to pay for property taxes on those trust assets.
An irrevocable trust costs between $3,000 â $6,000.Â
How much an irrevocable trust costs in Georgia depends on how complex your estate is.Â
Your estate planning attorney in Atlanta will most likely charge you by the hour.Â
And not charge you a flat fee.Â
This is because they have no idea how complex your estate can be.Â
Likely, youâll have to pay a retainer fee that the attorney can draw from as they work on the trust.Â
And they will return unused funds back to you.Â
If you want the most secure trust documents, fill out the form below.
We have the experience needed to ensure that you, your assets, and your family are protected.
This means that you donât wrongfully lose assets to creditors and lawsuits.
We also make sure that you reduce your tax liabilities and avoid probate when possible.
This means you and your family donât get raked over the coals financially.
After you fill out the form below, we will set up your free consultation.
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