Trusts are tools for estate planning that work alongside your Will to control how assets in your estate are distributed. A trust and estates attorney can explain the purpose of these tools. Our Georgia trusts lawyers can tell you that these documents can:
The first step to the creation of a trust is your nomination of a Trustee. This person oversees the trust, usually by (i) investing Trust assets, if necessary, and (ii) distributing the assets in the Trust (normally called the Trust “Corpus”) to the beneficiaries. You also want to specify the purpose behind your trust. The Trustee has a fiduciary duty to carry out your “trust purpose”. The trust purpose is a bit like a mission statement: it grants powers to the Trustee, with the understanding that contingencies happen that are difficult to plan for.
Finally, you may assign a date or event which will cause the Corpus of the trust to be distributed. So, for example, if you do not believe your minor child will be mature enough to handle his share of the trust assets before the age of 31, you can work with a lawyer to specify that his share of the trust Corpus not be distributed to him until he attains that age.
If you fear lawsuits and are willing to forego the benefit of owning the assets outright, you might consider tying them up in a non-revocable trust. Essentially, these types of trusts relinquish your control over the trust Corpus completely, such that your creditors may not go after those assets if they win a lawsuit against you. The assets are no longer yours – they belong to the trust.
Depending on the state in which you live, at the time of your death, your Will will likely be examined by – and the distribution process overseen by – a court in a process known as probate. , Probate can get expensive quickly. What does this entail? The executor named in your Will will need to take your Will to the probate court and initiate the process, sign off on a bunch of paperwork, and could very well need to hire an attorney to make sure he/she is doing it correctly. Attorneys and court costs, or even just the costs paid to your executor, can add up quickly for a medium to large estate and this is why many prefer to place their assets in a trust before they pass away.
Placing your assets in a trust with the help of an attorney makes those assets, effectively, pre-distributed in the ways in which you prefer, so there is no longer a need to probate those assets.
Because the creation of some trusts can be considered a pre-distribution of those assets to the heirs of your estate, the assets included in your trust may not be considered part of your estate for estate tax purposes. Having these assets “off the books,” so to speak, can reduce the total value of your estate and thereby reduce or eliminate your estate tax liability altogether.
By working with a Georgia trusts lawyer, you can control the distribution of your wealth and protect your legacy.