Testamentary Trusts: A testamentary trust in Georgia is created by a will and comes into effect after the creator’s death.
The key features of a testamentary trust are:
- Delayed Creation: It doesn’t exist until the creator’s death.
- Probate: It is subject to the probate process.
- Control: It allows you to dictate how your assets are distributed after death.
The pros of a testamentary trust are:
- Control: You decide how and when beneficiaries receive assets.
- Protection: It can protect minors or irresponsible beneficiaries from misusing assets.
The cons of a testamentary trust are:
- Probate: It goes through probate, making it a public record.
- No Living Benefits: It doesn’t help manage assets or avoid probate during your lifetime.
Revocable Trusts: A revocable trust in Georgia is a flexible estate planning tool.
The person who creates it can alter or terminate it during their lifetime.
The key features of a revocable trust are:
- Control: The creator maintains control over the trust’s assets.
- Changeable: Can be modified or dissolved anytime.
- Privacy: Avoids probate, keeping the estate’s details private.
The pros of a revocable trust in Georgia are:
- Flexibility: Change or revoke it as your circumstances change.
- Probate Avoidance: Helps avoid the probate process, saving time and money.
The cons of a revocable trust in Georgia are:
- No Tax Benefits: Assets are still part of your taxable estate.
- No Creditor Protection: Assets in the trust are subject to claims by your creditors.
Irrevocable Trusts: An irrevocable trust in Georgia cannot be altered or terminated without the permission of the beneficiaries once it’s created.
The key features of an irrevocable trust are:
- Permanent: It cannot be changed without beneficiaries’ consent.
- Tax Benefits: It can remove assets from your taxable estate.
- Creditor Protection: It can protect assets from potential creditors.
The pros of an irrevocable trust are:
- Estate Tax Reduction: The assets are not part of your taxable estate.
- Creditor Protection: Trust assets can be protected from creditors.
The cons of an irrevocable trust are:
- Inflexible: It cannot be changed easily.
- Loss Of Control: You cannot control or manage the trust’s assets.
Typical costs of setting up a trust:
Attorney Fees: If you hire an attorney to draft your trust, expect to pay between $2,000 to $4,000 for a basic trust. More complex trusts, such as special needs trusts or tax-shelter trusts, can cost between $4,000 to $10,000 or more.
Trustee Fees: If you appoint a professional trustee, they will charge for their services. Fees vary widely but might be a percentage of the trust assets, typically around 1%.
Miscellaneous Costs: This includes costs like notary fees, document recording fees, or other administrative expenses. These are typically minor, usually under $100.
Maintenance Costs: Trusts require ongoing administration. If you hire a professional for this, expect additional annual costs.