A revocable living trust, also known simply as a living trust, is a legal entity created during a person's lifetime to hold and manage their assets. Milton and Alpharetta estate planning attorney John Boscoe often recommends that his clients include a revocable living trust in their Georgia estate plan due to its many benefits.
How a Revocable Living Trust Works
In a revocable living trust, the grantor transfers ownership of real estate, bank accounts, investments, personal property, and other assets to the trust. The grantor usually designates themselves as both the initial trustee (the person responsible for managing the trust assets) and the primary beneficiary, allowing them to maintain control over the assets.
The primary purpose of creating a revocable living trust is to streamline the management and distribution of assets, both during the grantor's lifetime and after their passing.
During the Grantor's Lifetime
The grantor continues to manage and use the assets as they normally would since they are also the trustee and beneficiary of the trust. They can buy, sell, or change assets within the trust without significant restrictions.
In the Event of Incapacity
If the grantor becomes incapacitated due to illness, injury, or cognitive decline, the trust's provisions come into play. A successor trustee—someone the grantor has previously designated—takes over the management of the trust's assets and follows the grantor's instructions to ensure the grantor's financial affairs are taken care of.
After the Grantor's Passing
The trust becomes irrevocable upon the grantor's death, meaning it cannot be changed. The successor trustee continues to manage the assets according to the grantor's wishes. The trust's terms outline how the assets are to be distributed to the beneficiaries named in the trust document, whether it's family members, friends, charities, or other entities.
5 Important Benefits of Including a Revocable Living Trust in Your Georgia Estate Plan
With the ability to avoid probate, maintain privacy, exercise flexibility, plan for incapacity, and promote the smooth transition of assets, a revocable living trust can bring peace of mind to your estate planning journey.
1. Avoid Probate
One of the most significant advantages of a revocable living trust is its ability to help you sidestep the often lengthy and complicated probate process. Georgia probate involves court proceedings to authenticate a will and distribute assets, which can lead to delays, legal fees, and public disclosure of your estate's details. With a revocable living trust, the assets you place within it are not subject to probate, resulting in a streamlined and efficient transfer of assets to your beneficiaries. This saves time and money and ensures that your loved ones receive an inheritance promptly.
2. Protect Privacy
Privacy is often a concern when it comes to estate planning in Georiga. Unlike a will, which becomes a public document upon entering probate, the contents of a revocable living trust remain confidential. By maintaining your financial affairs within the confines of a trust, you safeguard your family's privacy and reduce the risk of disputes or contests that may arise from public exposure.
3. Provide Flexibility and Control
You can modify, amend, or even revoke the trust throughout your lifetime. This adaptability proves invaluable as your circumstances evolve. Whether you wish to add new assets, adjust beneficiaries, or modify distribution instructions, the trust's malleable nature ensures that your estate plan remains aligned with your intentions.
4. Plan for Potential Incapacity
Life can be unpredictable, and preparing for the possibility of incapacity is part of the Georgia estate planning process. If you were to become incapacitated due to illness or injury, the successor trustee you've appointed can step in seamlessly to manage the trust's assets according to your predetermined instructions. This arrangement eliminates the need for a court-appointed conservatorship.
5. Promote the Smooth Transition of Assets
The passing of a loved one is a challenging time for any family. A revocable living trust eases this transition by facilitating the seamless transfer of assets. When you appoint a successor trustee, this individual is responsible for carrying out your wishes and managing the trust's assets after your passing. This proactive step minimizes disruptions and uncertainties, allowing your loved ones to focus on processing their grief and adjusting to their new circumstances.