A trust is just one of the legal documents that Georgia residents should include in their estate plan. It is a legal agreement in which a trustee agrees to receive, safeguard and manage the assets provided by a settlor. The trustee also agrees to handle the assets in a manner that complies with the settlor's instructions and to properly distribute any income and principal from the trust.
As a fiduciary, the trustee has the responsibility of exercising reasonable care when managing the trust and choosing trust investments. The trustee also has to avoid conflicts of interest when selling, holding or buying trust assets and has to fulfill all duties to the settlor and the beneficiaries of the trust.
There are multiple reasons for establishing a trust. A trust can be used to protect assets from being divided during a divorce, from the creditors of beneficiaries and from the faulty judgement of irresponsible beneficiaries. A trust can also be used to privatize what happens with an estate's assets and help avoid the probate process. Individuals may also opt to use a trust to manage certain business assets for a business succession, manage assets that cannot be easily divided or hold assets for charitable giving so that the settlor and loved ones can benefit from reduced income taxes.
Individuals can structure a trust to ensure that it will meet their goals. They first have to decide if their trust should be funded now, funded with periodic gifts or funded when they die.
An attorney who provides estate planning services may advise clients of what types of trusts should be included in their estate plans to meet their unique goals. The attorney may assist with creating the trust, drafting the provisions, choose a trustee and devising a plan for funding the trust.