Many misconceptions and myths surrounding probate and estate plans circulate through families, gossip at the coffee shop, or talk among friends. Some of these misconceptions can cause a lot of trouble for during your lifetime and for your family after you pass. Instead of taking the chance that your wishes are not achieved, or that you end up creating an unintended burden, you should contact a Georgia estate planning attorney to help you create an estate plan that ensures your wishes are met.
Poor Man’s Will – Adding Names to Your Deed and Accounts
Many people believe that you can get around creating a formal estate plan or Will by adding your children’s names on all of your property. While this action will avoid probate, it can have unintended consequences. If a child is subject to a lawsuit, bankruptcy proceeding, garnishment, or divorce an attorney could argue that the jointly owned asset should be part of that proceeding. Also, even if you add your children or heirs, you still may not avoid probate if the assets are not titled properly. There is a common misconception that avoiding probate should be the ultimate goal, when in fact, estate planning focuses more on making sure your assets are used for your benefit during your life and then go to the people you choose.
Revocable Trusts Cannot Be Challenged
Sometimes clients ask for a Revocable Trust because they have heard, or believe, that creating a trust like this will avoid any challenge to their estate plan. Unfortunately, this common misconception is not entirely accurate. An heir can still challenge the validity of a trust. A trust is beneficial because it is not publicly filed and there is no legal requirement that heirs receive a copy of the agreement, unlike a Will. An heir can still challenge a trust if he or she believes that trust was created under questionable circumstances or is fraudulent.
People also ask about creating revocable trusts to avoid taxes or protect themselves. While an irrevocable trust can achieve these goals, a revocable trust is tied through your social security number and you are still required to pay all taxes associated with the funds.
Me, Myself, and I and Irrevocable Trusts
While an Irrevocable Trust can protect the assets placed into such a trust from creditors, divorce, and estate taxes, the person creating the trust cannot be the beneficiary. I often hear clients under the misconception that they can create an irrevocable trust, and still be the Trustee and beneficiary of the funds. If you place assets into an Irrevocable Trust, someone else should be the Trustee and beneficiary. In effect, you are giving away these assets, which is what makes them beyond the reach of your creditors and shelters them from estate tax as you are being seen as having given them away. Irrevocable Trusts can have benefits for those who need advanced planning, but there are many factors to consider before you take that leap. Keep in mind that once you put assets into an irrevocable trust, you cannot remove them from the trust and you lose a great deal of control over those assets.
If you do not have an estate plan or you need to make changes to an existing estate plan, contact our Georgia estate planning attorneys at Grissom Law, LLC for a consultation.
Disclaimer
This Blog/Web Site is made available for educational purposes only as well as to give you general information and a general understanding of the law, not to provide legal advice. By using this blog site you understand that there is no attorney-client relationship between you and Grissom Law, LLC.