Would You Benefit From Creating A Revocable Living Trust?
At Meyring Law Firm, we are a full-service law firm that helps clients explore every avenue for creating a sound and effective estate plan, one of which is the revocable living trust. Our Atlanta living trust attorneys in Atlanta GA are dedicated to creating customized estate plans that not only reflect a client’s individual goals, but that truly take their estate plans to the next level.
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What Makes Up a Revocable Living Trust?
A revocable living trust is a document that determines how your property is managed and distributed during your life and also upon death. Typically, a revocable living trust involves three parties:
The Settlor – Also known as the grantor or trustee, this is the creator of the trust. In a revocable trust, the trust is amended or revoked as the grantor sees fit. The trust remains in a private state and achieves irrevocable status upon the settlor’s death.
The Trustee – This person holds title to the trust property and manages it according to the terms of the trust. The money or property held by the trustee makes up the principal of the trust; this principal can frequently change as expenses are incurred by the trustee or the principal appreciates or depreciates in value. Often, the settlor serves as the trustee during their lifetime and another person or trust company serves as the successor trustee after the settlor’s death, of if the settlor becomes incapacitated.
The Beneficiary – This is the person or entity entitled to receive the income or principal from the trust. The beneficiary benefits not just from the income or principal received by the trust, but the composition of the revocable trust allows the beneficiary to avoid the pains of probate court as they go through the trying time of losing a loved one.
A trust is considered a “living trust” when it is established during your lifetime and as “revocable” when you reserve the right to amend or revoke your trust during your lifetime.
What are the advantages of a revocable living trust?
The property held in a revocable living trust at the time of your death is not subject to probate administration, thus beneficiaries will receive their inheritance automatically, and within accordance with the stipulations set forth in the trust document. Other advantages include:
- The administration of a trust is a private matter; by remaining out of courts, the trust remains shielded from public discourse.
- Property can be distributed to beneficiaries shortly after your death, avoiding the lengthy processes that probate courts bring that can drag on for a considerable amount of time.
- Probate court approval is not needed to sell trust assets, expediting the process of liquidating assets that are no longer desired to be held.
What is the difference between a revocable and irrevocable trust?
Living trusts typically boil down to two different versions: irrevocable and revocable. The basics come down to this: revocable trusts can be modified or canceled by the grantor, whereas the irrevocable trust cannot be amended or terminated without first securing the beneficiary’s permission. Both types of trusts will aid in avoiding probate court, and a revocable trust obviously comes with added flexibility.
Why choose an irrevocable trust? The virtue of the irrevocable trust is that it effectively shifts assets out of the grantor’s estate. There are many reasons why someone would want to do this: these can include asset protection, avoiding taxes like estate tax or capital gains taxes, and taking advantage of certain charitable giving tax deductions. By moving assets out of the grantor’s provision, they become effectively shielded from creditors or lawsuits. There are ways to negotiate an irrevocable trust to avoid certain capital gains taxes, and in the event that a grantor is near the federal estate tax limit, shifting assets into an irrevocable trust can clear an estate from approaching that limit.
When clients don’t have a large enough pool of assets to approach the federal estate tax limit, or are less concerned about matters like capital gains taxes or asset protection, a revocable living trust may be the desired option. It guarantees the grantor the greatest amount of freedom to retain control over their assets during their lifetime, holding onto the ability to make changes to their living trust as they see necessary.
How to create a revocable living trust?
The process of creating a revocable trust is a fairly straightforward matter of meeting with the proper legal consultant and writing documentation that conforms with the law and includes the necessary provisions. The trust requires you, the grantor, to designate a trustee for managing assets in the trust. You can even name yourself as the trustee, although doing so leaves assets open to claims from creditors upon your passing. Should you ultimately decide to name another person or an organization as the trustee, you’ll also want a successor trustee in place should the trustee either withdraw or be unable to carry out the wishes of your living trust.
You will then need to decide which assets will fall under the provision of the trust. A revocable trust can contain cash, real estate, stocks and mutual funds, and stakes in businesses that you may wish to reallocate. The trust should list the account that the assets are held in, as well as pertinent custodian information, whether that be an investment company, bank or otherwise.
You can then name your beneficiaries and any directions you wish for your trust to follow through with in distributing assets. You can use the revocable trust to grant power of attorney should you become incapacitated, or can even use it to disinherit beneficiaries that challenge the trust (an advantage of a revocable living trust over a standard will). Once this is complete, you’ll then begin the process of transferring titles of property to the trust, and sign the necessary documents with a witness.
Contact an Atlanta Living Trust Attorney
Creating a revocable trust is a major move in establishing your estate’s security, but it can be made easy with the right professionals. Our Atlanta living trust attorneys can help you create a revocable living trust by preparing a legal document called a trust agreement, which is signed by the settlor and the trustee. We will then help you transfer property to the trustee so it will be held for the benefit of the beneficiary or beneficiaries named in your trust document.
Are you interested in creating a revocable living trust in Georgia? If so, contact our Atlanta revocable living trust attorney at Meyring law firm to learn more about these valuable estate planning tools in a free case evaluation!