Have you wondered what the difference between a Last Will and Testament and a Trust is and if one is better than the other? We get this question frequently and the answer is that it depends on your situation and your goals.
Last Will and Testament
A Last Will and Testament is a document that you create during your lifetime that directs where your assets that are subject to probate go at your death. Your Will is only effective at your death, it does not have any power if you are incapacitated but still alive. A Will does not avoid probate, but rather makes sure that your assets go to the people you want instead of being distributed according to the laws made by the government. Your Will is filed in the probate court and is a public document. Additionally, for a Will to enter probate (the formal process of having your assets distributed through the court system) all of your heirs must be notified. An heir is determined when you pass and is your family tree as determined by the Georgia code (spouse and children, or spouse only, then parents, then siblings, etc.) If there are people you have intentionally disinherited or family members that might be upset at probate, a Will might not be the best option. Probating a Will also takes times which means no one will have legal access to your assets until someone is appointed by the court as the Executor, which can take anywhere from a few weeks, to a few months. However, with proper planning, updating your beneficiaries and creating payable on death designations can avoid most or all of the probate process and provide your loved ones with funds more quickly than probate.
Trust
A trust can be revocable or irrevocable depending on your reasons for creating one. A revocable trust means you have control of the agreement during your lifetime and can change it or terminate it at any time. In a revocable trust you also receive all of the income and principal from the trust. Irrevocable trusts tend to be more complicated and are often used to minimize taxes. Trusts are not made public. Only the people named in the trust have a right to see it (and the Trustee, the person who manages the trust). A trust, unlike a Will, is effective as soon as it is signed. If you (the creator) are living, but incapacitated due to dementia or other factors, someone else you name can manage the assets in the trust for your benefit. A trust also avoids probate, which means upon your passing your assets can be distributed immediately without any petitions or court interference. However, a trust requires work. To have a trust work correctly, you must retitle assets, update your beneficiaries, open new accounts, and review the document and your assets every few years to make sure it is still up to date. If a trust is not properly funded, it is not as effective and may not avoid probate. As you sell and purchase residences or other properties, acquire new assets, change jobs and retirement accounts, welcome new members to your family or say goodbye to others, all of these events trigger action needed by you to keep your trust current.
At Grissom Law, we work with you to find the estate plan that best suits your needs. From the simple to the complex, from probate to trust administration, our firm works with all. We can create a basic Will or craft a unique trust document that makes distributions under specific terms only.
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.