What Are the Top Misconceptions Regarding Trusts?

It is a common misconception that by setting up a trust, people are going to lose control of their assets forever. For the most part, this is not the case. For a common revocable living trust, the person who puts the assets in the trust typically maintains absolute control over it for their natural life. You can put things in it, you can take them out and you can act with that property exactly how you did the day before. People typically do not lose control over trust assets. Another thing is that people are afraid, they do not have to go through the process of moving everything over immediately. That is also not the case.

While I do recommend that people have a strategy of properly transitioning property in the name of the trusts, it is often not going to ruin the estate plans and not do it immediately. The worst case scenario for a lot of our clients is that the Last Will and Testament will essentially state that “everything goes into the trust.”

Another misconception is that trusts are too complicated for the average person to consider. While it may be confusing to figure out what kind of protections you need and how to address them through a trust, an attorney should make this process relatively transparent and easy to understand. The last thing you should do is to setup a trust that you don’t understand. That is one area where you really want to talk with your attorney and understand what kind of protection and estate planning benefits you are receiving so you do not think you have more than you actually have, or you have a less than you think you have.

Is There a Way to Draft A Living Trust That It Can Be Protected By Beneficiary Creditors?

Yes. I recommend anyone who is drafting a trust to do is to include what is called Spendthrift language. This language will give the Trustee the power to hold back a gift to the beneficiary if it is going to go straight to the beneficiary’s creditor. The trustee can hold this gift in hopes that the beneficiary can resolve their underlying issue, and that can be a matter of years in Georgia. Typically, in Georgia, credit claims can be resolved in a six-year period. During that time, the trustee can make sure the creditors do not get it and help the beneficiary pay or settle whatever debts are owed.

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Is The Cost of a Will Or A Trust Tax Deductible In Georgia?

Potentially. As a general rule, tax planning is tax deductible to the degree that you are planning your trust to minimize taxes, including but not limited to the estate tax. I recommend that all my clients talk with their tax professional, whether it is your CPA or other tax planner to discuss applying this deduction to your specific situation.

Is A Will Just as Good as A Trust for Asset Protection for Estate Planning Purposes?

In this situation, it is not a will or a trust.

It depends on the situation.

It’s always important to have a Last Will and Testament. Even if all your assets are in a trust and probate is unnecessary, a Will can do many things that a trust cannot. In particular, a Will allows you a will can do things like you can nominate a guardian for children at the age of eighteen. That is not something you can do with the trust. You can layout certain provisions about family members and debts and certain things that cannot necessarily be addressed in a trust immediately.

Wills and trusts work well together. You can use the will to put any assets that are not in the trust and to pour them in the trust. By doing so, you “clean up” your estate plan and make sure that everything that should go inside the trust goes inside the trust.

Having just a will can form a good estate plan, but it will not provide the same level of lock down long-term security that a trust can provide and won’t give the same lifetime benefit of securing property against incapacity. In this situation, depending on what the person’s goals are and what their assets are. Trust is a very good option for many families. It’s a decision that should not be made without talking with an experienced trusts and estate planning attorney.

How Can A Trust Help Someone To Avoid Probate?

Under Georgia Law, the only assets subject to probate are those in the name of the deceased. When you transfer something into the trust during your life, it no longer belongs to you (at least on paper); it belongs to the trust. While the trustee may have the ability to then pull something out of a trust, the property is part of the trust until that happens. While in the trust, the trust document alone directs the use of that property and lays out the rules, procedures, the names of the beneficiaries, and how the beneficiaries can eventually receive the property.

Everything in the trust is not subject to probate so you do not have to worry about making a probate court filing to manage it or distribute to beneficiaries. In Georgia law, it is important to also note that trusts are not court-supervised, so barring a dispute (which is relatively rare), there is no need to step into a court at all.

What Sets Your Firm Apart in Handling Trusts and Other Estate Planning Issues?

Trust and estate planning is our area of expertise; we have done it for years. We keep up with the law. We have managed enough trust and estate litigation to know first-hand about the issues that create contention within a family and we can work with people to address those early on and present those disputes from happening down the road. We understand tax issues such as the estate tax, gift tax, and even the implication of trusts on income taxes. We understand asset protection issues and can give advice as clients potentially become involved in litigation down the road. We put that experience to work for our clients every day.

For more information on Misconceptions About Trusts, a free initial consultation is your next best step. Get the information and legal answers you are seeking by calling (404) 939-7562 today.

Get your questions answered - Call for a complimentary strategy session at (404) 939-7562.