Roswell Trust Attorneys Helping Clients Navigate Living Trusts and Estate Planning Matters
Trusts have the potential to provide tax advantages and shield your estate from creditors, while also allowing you to determine how each beneficiary will receive the money and in what circumstances they should receive it. Despite this, many seem to avoid or ignore the option of a trust, fearing it might be costly or hard to manage. While a trust may not be right for everyone, it is in your best interest to understand how they work and to see if a living trust is a good option for you. Often, a conversation with a living trust attorney can provide you with insights into what you need to do moving forward and also, perhaps, additional questions you need to ask yourself and your loved ones.
How Does a Trust Work in Estate Planning?
Trusts are created to be separate legal entities to hold a variety of assets that a grantor transfers into the trust. The assets are then owned by the trust and managed by a trustee. Usually, the grantor and the trustee are the same person. For example, if you create a trust and fund it by adding the family home and an investment account into it and name yourself as the one to manage the trust assets, then you are both the grantor and the trustee.
You can then name your beneficiaries—your spouse, children, relatives, or even a charity organization if desired—and determine how your assets in the trust should be divided among them after you pass away. This option gives you great control over how money and properties are divided and can even help protect your wealth in case your beneficiaries have any outstanding debt or are going through a divorce.
What is the Difference Between a Revocable and an Irrevocable Living Trust?
The most popular kind of living trust is a revocable trust. Revocable means it can be changed, amended, or canceled by the grantor at any time. It also allows the trust creator to transfer assets into the trust without permanently giving up ownership of said assets. It also lets the creator of the trust to add or remove beneficiaries, trustees, and assets at any point during his or her lifetime.
An irrevocable living trust, on the other hand, cannot be easily changed or canceled once created. Once the grantor transfers assets into the trust, those assets cannot be taken back. Any changes to the trust need to be submitted to each beneficiary and trustee for approval before being implemented, which takes time and further money. An irrevocable living trust can, on the other hand, also provide significant tax savings and a higher level of protection from creditors, since every asset placed into an irrevocable living trust is excluded from your taxable estate.
Is Settling an Estate Through a Trust Cheaper than Going Through Probate?
While every estate is different and a trust may not be right for every case, probate costs (including filing fees and associated charges) can be a considerable expense. Add to that the fact that many executors prefer to hire an attorney to represent them during the probate process, and you might be looking at significant costs your estate will need to pay before being passed on to your heirs.
Though a trust may have a larger upfront cost than a will, when it is time to settle your estate and distribute assets, your family will have an easier time because all assets in the trust can be passed on directly to your loved ones without ever going to court. This takes off the extra stress of trying to go through probate and potential family strains, while also dealing with their loss. Also, a trust that is well-maintained and kept up to date is likely to have an attorney already familiar with its terms and ready to execute the plan previously laid out. Because everything has been planned ahead of time, trust administration costs may be lower than costs associated with probating an estate, in addition to the emotional cost connected with each.
Do I Need an Attorney to Set Up a Living Trust?
You are not required to have an Estate Planning Attorney in Atlanta to set up a living trust but attempting to go the do-it-yourself route is extremely risky. You need to feel certain you are choosing the right type of trust for you and that your trust will do what it is supposed to do for your family, rather than creating an obstacle. It is in your best interest to get the help of a seasoned estate planning law firm, if you want to set up a well-drafted trust to protect your assets.
Oren Ross & Associates has assisted many clients in the Roswell area with making the right choices regarding trusts and estate planning. Contact our office today at (678) 250-4281 to see how we can help you and your family.