Guide to Creating a Georgia Living Trust

What is a Living Trust?

A living trust is established during one's lifetime. Individuals designating beneficiaries in this trust ensure that the trust property will be transferred to them upon their demise.

While a Will is an alternative option, it necessitates going through probate, a court-supervised process for transferring property to beneficiaries.

Many individuals create a revocable living trust as part of their comprehensive estate plan. These trusts grant the flexibility to modify or revoke them at any time.

Typically, the trust's creator assumes the role of the "trustee" during their lifetime, retaining control over the trust and its assets. The trust document also designates a "successor trustee" who will manage and distribute the trust's property after the creator's death.

In the case of a shared living trust, commonly established by spouses, the successor trustee assumes control only after the passing of both spouses.

In contrast, irrevocable trusts cannot be modified or revoked once signed. Although they require relinquishing ownership and control of the trust property, irrevocable trusts serve as valuable instruments for achieving specific objectives, such as tax reduction.

Do I Need a Living Trust in Georgia?

Creating a living trust to transfer your assets to loved ones after your passing can potentially spare them from the burdens of time, complexity, and financial strain.

In contrast to a Will, which can entangle property in probate court for months or even years, subjecting it to substantial court expenses and attorney fees, a trust enables the expeditious distribution of assets to beneficiaries, often without requiring legal intervention.

While certain states have embraced the Uniform Probate Code—a standardized law that streamlines the probate process—unfortunately, Georgia is not among them. However, Georgia does offer a simplified probate procedure for specific estates.

Referred to as "dispensing with administration," this accelerated probate route becomes applicable if the following criteria are met: there is no Will, no debts or creditors necessitate notification, and the heirs unanimously agree on the division of assets.

Suppose your estate meets the requirements for this efficient procedure. In that case, the probate process will be swift, straightforward, and relatively affordable, potentially alleviating the need to establish a living trust solely to bypass probate.

If I Make a Living Trust, Do I Still Need a Will?

Although establishing a living trust aims to eliminate the need for a Will, it is still essential to have one for the following reasons:

Appointing a guardian for minor children. A trust cannot be utilized to designate a guardian for your underage children. Hence, if you have dependents of a tender age, drafting a Will explicitly naming a guardian is imperative.

Addressing property not transferred to the trust. It is common for individuals to create a trust but inadvertently overlook the formal transfer of certain assets into the trust. For instance, they may neglect to update the deed for their residence.

Additionally, individuals may acquire or inherit property after establishing the trust and fail to realize the necessity of assuming ownership as the trustee. So, to account for such contingencies, having a Will as a backup becomes crucial, enabling you to dictate the distribution of assets outside the trust.

Without a Will, any property not transferred via your living trust or other means, such as joint tenancy, will be allocated to your closest relatives based on the regulations outlined by Georgia state law.

Can a Living Trust Reduce Estate Tax?

For the majority, fretting over federal estate tax is likely unnecessary, as the scope of its imposition extends solely to estates approaching a value of approximately $12 million. Moreover, it is worth noting that Georgia does not impose its estate tax, further alleviating concerns.

However, if you possess an estate approaching the $12 million threshold (or if you and your spouse or partner possess a combined estate nearing $24 million), there exists a possibility of employing a more intricate trust structure, such as an AB trust. Such measures can mitigate or even entirely circumvent the burden of estate taxes, but they entail additional complexities.

How to Make a Living Trust in Georgia?

Step 1: Evaluate Your Assets

Start by meticulously compiling a comprehensive inventory of your assets, from your primary residence and vehicles to valuables like jewelry, stocks, bonds, and life insurance policies.

Gaining a thorough understanding of the breadth of your holdings empowers you to identify assets that may be subject to the probate process. Including these assets within your living trust optimizes the benefits this legal arrangement offers.

Step 2: Gather Requisite Documentation

To effectively "fund the trust," assemble the necessary paperwork, including property titles, stock certificates, and bank account statements. These documents are paramount for the seamless transfer of ownership to the trust.

Step 3: Determine the Grantor(s)

Carefully weigh whether you will serve as the sole grantor of the trust or if establishing a shared trust would be more suitable. Married couples or domestic partners possessing significant assets may find shared trusts advantageous. However, in specific circumstances, two trusts can cater to unique requirements.

Step 4: Select the Beneficiaries

Deliberate thoughtfully and choose the beneficiaries of your living trust. These individuals can be family members, close friends, loved ones, or charitable organizations. Your selections will ultimately determine the recipients of the trust property upon your demise.

Step 5: Appoint a Successor Trustee

The successor trustee assumes a pivotal role in managing your assets and ensuring that your wishes are faithfully executed in the event of mental incapacitation or after your passing.

If the need arises, this individual will handle debt settlements and asset distribution and assume control of your affairs should you become incapable of managing them.

Selecting someone whom you deeply trust is of utmost importance. It is advisable to discuss your living trust plans with the designated trustee to confirm their willingness and ability to shoulder this responsibility. They may also be named as a beneficiary in the trust.

Step 6: Designate a Property Manager for Minor Children

Consider naming a property manager if a minor child possibly inherits assets through your living trust. This individual will oversee and safeguard the inherited property until the child attains the age specified in the trust.

Step 7: Prepare the Trust Document

After making all the preliminary decisions, it is time to compose the living trust document. Georgia mandates specific legal statutes governing the composition of trust documents. It is advisable to seek guidance from a seasoned estate planning attorney or an online legal service to ensure compliance with state laws.

Step 8: Sign and Notarize the Document

Once the trust document is complete, it is crucial to sign it and, if the trust was established jointly, have your spouse sign it in the presence of a notary public.

Step 9: Transfer Property to the Trust

The next step involves transferring your assets into the trust. The process varies depending on the type of property involved. You need to change the title for real estate, while intellectual property requires assigning ownership rights. Follow the specific procedures to ensure your assets are properly held within the trust.

Step 10: Safely Store the Document

Secure a safe location for storing your trust document and ensure that a trustworthy individual, such as the estate plan successor trustee, has authorized access.

Step 11: Engage in Ongoing Evaluation and Revision of a Revocable Living Trust

Life's milestones, ranging from the joys of births and marriages to the sad reality of deaths and divorces, call for a diligent reassessment of your revocable living trust. This critical step ensures the trust harmonizes with your present desires and intentions.

Even in the absence of such significant events, it is prudent to periodically review the document every few years, guaranteeing its enduring pertinence in the face of the ever-evolving circumstances of life.