Understanding Wills & Trusts in Georgia: A Comprehensive Guide to Estate Planning
What is the difference between a will and a trust in Georgia?
A will is a written document, signed with specific formalities including two witnesses and a notary public in Georgia, that determines asset distribution upon death. It only becomes binding after death and probate court approval. In contrast, a trust (inter vivos trust) takes effect immediately during the creator's lifetime. It acts as a vessel holding assets that can be managed for the benefit of the creator or others while alive, with specific instructions for distribution after death.
How does a trust protect young beneficiaries?
Trusts offer significant control over how and when beneficiaries receive assets. For example, if you have young children, you can specify that assets be held until they reach a certain age (like 25) while allowing the trustee to pay for essential expenses like education, summer camp, or a reasonable vehicle. This prevents young beneficiaries from receiving large sums before they're financially responsible.
What are the benefits of trusts for blended families?
In second marriage situations, trusts can ensure assets benefit a surviving spouse during their lifetime while ultimately passing to the creator's children. This prevents assets from potentially going to the second spouse's children or estate, providing clear direction and protection for complex family situations.
How do trusts help with Medicaid and special needs planning?
Trusts can be valuable tools for Medicaid planning since Medicare doesn't cover long-term nursing care. Specific types of trusts can shield assets while maintaining Medicaid eligibility. For beneficiaries with special needs, trusts can preserve their eligibility for government benefits while providing additional support for their care.
What advantages do trusts have over wills in the probate process?
While wills must go through probate court, requiring heir approval and potential litigation, trusts can typically distribute assets after a brief waiting period (about six months in Georgia) without court supervision. This can save significant time and money, especially in contested situations where probate costs could consume substantial estate assets.
How flexible are trusts during the creator's lifetime?
A typical living trust remains fully controllable by its creator while alive and of sound mind. Assets in the trust can be sold, refinanced, or managed as needed. The trust can be modified or amended until the creator's death or incapacity, at which point the most recent version becomes permanent.
How do you ensure assets are properly placed in a trust?
Funding a trust requires explicitly transferring assets into it, either by retitling property, setting up trust bank accounts, or designating the trust as a beneficiary on life insurance and other accounts. A "pour-over will" can serve as backup, directing any remaining personal assets into the trust upon death.
