Nobody wants to think about the possibility of passing away, and even more devastating, having to give up possession of your 1973 Ford Mustang, but sooner or later, the thought arises: once you pass away, who does the Mustang belong to? Writing a will seems to be the obvious choice for setting instructions regarding how to dedicate your belongings, but setting up a living trust proves to be a more than viable alternative. This article aims to help you make a decision in deciding whether to create a living trust or will.
Please note: living trusts and wills are set up differently depending on the U.S. state in which you’re currently residing. The information presented here regards the particulars of Georgia specific living trusts and wills. It is always recommended to have an attorney present when creating living trusts, wills, and any other legal documents.
Do I really need a will or living trust?
Yes. Imagine your poor Aunt Jane had just suddenly passed away with a considerable fortune left to distribute among family and friends. Your family, after their period of grieving, realizes that Aunt Jane’s assets now need to be distributed and handled, but Aunt Jane hadn’t written a will or set up a trust! Well, Uncle Joe asserts that he certainly deserves her car, Grandma Pam says she deserves control of the house, Grandpa Bob wants her life savings, and suddenly everyone is fighting about who deserves what. Wills and living trusts help avoid this horrible legal mess your family would be engaged in after one’s death.
Legal jargon for Wills and Trusts can be intimidating, so let’s go over some of the key phrases.
- The executor is the person you put in charge of distributing your property after your passing when dealing with a will.
- Trustees are essentially the same as executors, except for a living trust instead of a will. The main difference is when you create a living trust, you can name yourself to be the trustee until your passing.
- Assets are the pieces of property that you own and would like to distribute.
- Probate is the official proving of a will.
- Probate assets are assets that would be under the jurisdiction of the probate court if one were to leave a will.
- Debts and taxes are any amounts one’s estate might need to pay out upon death.
- Beneficiaries are the people you want to receive your assets
What is a will?
A will is a written, personal document that provides your instructions for how you would like to distribute one’s belongings after death. Although a will is a legal document, one does not need the presence of a lawyer in order to set up a will; in fact, depending on state restrictions, there are websites where one can make and keep and updated will entirely online. That being said, having an attorney present is always recommended to avoid breaking any state restrictions or laws.
What is a Living Trust?
A living trust, like a will, is a written, personal document that provides your instructions for how you would like to distribute your belongings after death. However, living trusts are considerably “stronger” than wills in the sense that living trusts are completed and signed in the presence of a notary, funded by transfer of assets, and supported by a trustee when you pass away.
There are two types of Living Trusts: Irrevocable and Revocable.
- Irrevocable Living Trusts are unchangeable, and once assets are placed in an irrevocable living trust, they cannot be transferred.
- Revocable Living Trusts are far more common because they avoid this kind of permanent engagement, allowing you to edit and change the trust over the course of your life.
Advantages of a Will
- Wills are generally more simple, inexpensive, and legally unbound than living trusts. Living trusts are highly formal documents that can cost anywhere between $100.00 and $1000.00 depending on the complexity of your personal situation.
- Georgia is a state with a relatively simple and inexpensive legal system, so having to undergo the probate court system isn’t terribly difficult in comparison to most states. However, Georgia hasn’t adopted the Uniform Probate Code, so there could still be some difficulty in the probate system.
- Wills don’t have to be funded to remain effective. Trusts require funding and placement of assets to be an effective trust.
- Pros of a Living Trust
- Creating a living trust enables one to bypass the tedious probate court proceedings that are necessary under a will. Under a living trust, assets are distributed immediately upon death by the trustee, and families don’t have to pay the costs of an attorney. In this manner, a living trust may actually save you more money than a will would.
- Although it’s true living trusts are more formal, expensive, and difficult to create, wills don’t have the same ability as living trusts to establish provisions for niche, important cases. For example, assets in a living trust are protected from a surviving spouse if you would wish to disinherit him or her. Wills don’t have this kind of legal protection.
- Living trusts remain private at the time of your death, where wills become public record.
What can I do now?
The decision to create a living trust or a will is a highly personal one that shouldn’t be made alone. Our highly experienced attorneys can help you make the best choice for your personal, legal, and financial situation. If you have any qualms or doubts about the decision, or if the information is still unclear, call 770-709-1247 to have a helpful discussion with one of our probate attorneys today.