Many Georgia residents, while setting up their estate plans, will create trusts in order to keep their assets protected in the event of their death or incapacitation. There are certainly benefits to doing so. It all really depends on what type of trust one creates, as it can affect how things are handled during estate administration, such as taxes.
Generally speaking, there are two basic trust options available. These are revocable and irrevocable trusts. For the sake of keeping it simple, these trusts work for just about anyone who does not have highly specific needs or concerns — such as a special needs child that needs protecting.
A revocable trust is one that the owner can change at any time and the property in the trust still belongs to the trust owner. An irrevocable trust, on the other hand, cannot be changed. On top of that, assets placed in the trust no longer belong to the person — they belong solely to the trust.
One of the biggest benefits of putting assets into a trust is the potential savings on estate taxes. Before an estate can be administered to any beneficiaries, the executor is required to make sure all taxes due are paid to the IRS. Assets placed in an irrevocable trust are not subject to death taxes. This is not the case for assets placed in a revocable trust.
There are positives and negatives to each trust type. At the end of the day, one has to look at the overall picture and decide what he or she is ultimately trying to accomplish. An experienced attorney can help Georgia residents create the trust documents that fit their needs, and when the time comes, further assistance can be provided to loved ones to help the estate administration process move smoothly and swiftly.
Source: dummies.com, “What is a Revocable Trust versus Irrevocable Trust“, N. Brian Caverly and Jordan S. Simon, Accessed on Nov. 8, 2017