Estate planning in Georgia involves understanding the distinctions between wills and living trusts. While wills offer simplicity and the ability to appoint guardians for minor children, living trusts facilitate probate avoidance and offer enhanced asset protection. The choice between the two depends on factors like estate size, privacy preferences and the need for probate avoidance. A financial advisor with estate planning experience can help guide you through this important process.
Understanding Probate in Georgia
Probate encompasses the court-administered process where a deceased person’s estate is processed and dispersed. Not only is the probate process a necessity, it’s also a legal requirement to ensure the deceased person’s creditors are paid and the remaining assets are distributed according to their will.
During the probate process, which can take up to 12 or 18 months to complete in Georgia, the will is authenticated, an executor or personal representative is appointed and any creditors and heirs are notified. Debts are also paid and tax returns are filed, followed by the distribution of assets to beneficiaries.
In Georgia, the probate process follows certain rules that may slightly differ from those of other states. For example, there are specific conditions under which an estate in Georgia can bypass probate. This court-administered process may be waived if there is no will, all heirs unanimously agree on how the assets should be distributed and the deceased had no outstanding debts.
Probate can also be avoided in Georgia if the deceased person’s assets are held in a living trust or owned via joint tenancy. Payable on death and transfer on death designations can also ensure bank accounts and investment accounts, respectively, avoid probate. Understanding these conditions can aid in estate planning and potentially streamline the process of asset distribution after death.
What Is a Will?
A will is a legal document that lays out how an individual wants their assets to be distributed after their death. The assets mentioned in these documents can range from real estate to monetary savings, and even personal belongings.
The will also identifies an individual who will be responsible for executing these last wishes. This person is referred to as the executor, a role that is assigned within the will itself.
Although a will is indeed a legal tool, the aim is to draft its terms and conditions in a way that is easy to understand, not just for those with a background in law, but for any average individual.
What Is a Living Trust?
A living trust, also known as an inter vivos trust, is a legal instrument that has been widely adopted to ensure efficient management and distribution of assets, presenting a smoother transition of wealth after a person’s death.
A living trust allows you to place your assets into a trust during your lifetime and then serve as the entity’s trustee. When you die, the trust becomes irrevocable and a successor trustee ensures the assets transfer to your chosen beneficiaries.
For instance, a person may decide to transfer the ownership of their home into a living trust. This decision ensures that their home directly passes to their selected beneficiary after their death, bypassing the often lengthy and costly probate process.
Trust or Will: Which Is Better Suited for You in Georgia?
While trusts offer benefits like probate avoidance and the ability to manage assets during your lifetime, they’re not always preferable to wills. The choice between a trust and a will depends on personal factors such as the size of your estate, your privacy preferences and whether you need to appoint a caregiver for minor children.
In Georgia, for instance, a smaller estate might be better served by a will due to its simplicity and lower upfront costs. However, individuals with larger estates might prefer a trust for its potential to avoid probate and provide privacy.
When a Trust Is More Advantageous in Georgia
If you have a significant amount of assets, and value your privacy, then a living trust could be a winning choice when planning your estate. Since assets in living trusts bypass probate, the details of your estate would never become public record.
Furthermore, living trusts offer a unique level of customization in asset distribution and protection. For instance, you could specify that funds be released to a child when they reach a certain age. Additionally, once you die, the trust becomes irrevocable under Georgia law, which could help protect your assets against creditors and lawsuits.
When a Will Is More Advantageous in Georgia
A will, on the other hand, has its unique set of benefits. Let’s say you’re a parent with minor children. In Georgia, you can appoint a guardian for your children through your will, ensuring they are cared for according to your wishes. This provision can provide parents with an extra layer of comfort, knowing their children will be in capable hands in case something happens to them.
And while a trust has its merits, there are circumstances in Georgia where a will offers distinct advantages. For example, a will allows you to name a personal representative or an executor to wrap up your estate, settle your debts and distribute your assets according to your wishes. This feature can be particularly beneficial in situations where the estate includes complicated or contentious assets, as this personal representative can provide necessary guidance during the distribution process.
Can You Have Both in Georgia?
In the state of Georgia, it’s not just possible, but also legally feasible to have both a will and a living trust. The combination of these two legal documents might be considered when looking for flexibility and control over an estate before and after death.
Having both can mean your estate will bypass probate without you losing the ability to name a guardian for your minor children.
Establishing both a will and a trust can also ensure all your assets are accounted for. So, as an example, if you acquire new assets near the end of your life and don’t transfer them into the trust, having a pour-over will in place can help ensure that these assets get distributed according to your wishes.
But it’s important to understand that having both documents might lead to conflicts if the instructions in the will and trust contradict each other. Therefore, it’s important to keep both documents consistent and updated regularly.
Bottom Line
Deciding between a will and a living trust in Georgia depends on individual circumstances like estate size, privacy preferences and the need to care for minor children. It is legally feasible, and sometimes beneficial, to have both a will and a living trust in Georgia, providing flexibility and control over one’s estate before and after death.
Estate Planning Tips
- A financial advisor with estate planning experience can help you make a plan for your property and assets for when you’re no longer around. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
- Power of attorney is another key component of an estate plan. This legal instrument allows you to appoint someone to handle your financial affairs. In Georgia, power of attorney is durable, meaning it continues even if you become incapacitated. Here’s how to create one in the Peach State.
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