April 30, 2021
Revocable Trusts and Wills in Georgia
Revocable Trusts and Wills are often sold to the public as analogous estate planning tools, capable of achieving various levels of creditor, tax and probate protection. The truth is that each vehicle offers unique advantages, and the selection of either or both as an estate planning tool should only be made after carefully considering the respective costs and benefits. Below is a basic discussion of the differences between Revocable Trusts and Wills as a method for disposing of property at death.
The creation of a Revocable Trust requires the re-titling of property in the name of the Trust. So, real property, vehicles, bank accounts, securities accounts, etc. must all be re-titled. The advantage is that any assets titled in the name of the Trust at the grantor’s death will not have to be “probated” to pass to the desired beneficiary. Rather, the beneficiary (perhaps a spouse or child) will have immediate access to the assets of the Trust. While a Will does not require re-titling of assets, the power of the Probate Court must be invoked at death in order to pass assets to the desired beneficiaries. This is not an overly complex or financially burdensome process in Georgia, but it will involve a delay compared to the passing of assets via a Revocable Trust. It should be noted, however, that any practitioner drafting a Revocable Trust will also draft a “safety net” will, to direct to the Trust assets the grantor may not have re-titled during life. It is sometimes the case that a single asset, such as a bank account or car, will require the probate of a Will even if a Revocable Trust was drafted and funded.
If all assets successfully pass through a Revocable Trust without the need for probate, there will be no public record of the Will. Confidentiality can sometimes be a desired benefit for those leaving property at death, and a Revocable Trust can accomplish this. Another concern often raised by those wishing to leave property at their death is potential challenges to their desired testamentary scheme. Both Revocable Trusts and Wills can be challenged in a court of law. However, those attempting to challenge a Will actually face a more difficult task than those seeking to set aside transfers to a Revocable Trust, because of the legal presumption in favor of permitting an individual to dispose of his assets via a Will.
For creditor and tax purposes, the property in a revocable trust is treated as being owned by the creator, or “grantor” of the trust. This is so because the grantor can at any time prior to his or her death, “revoke” the trust and take the property back. Thus, revocable trusts do not offer unique tax benefits or creditor protection. Most common estate planning objectives achievable in a Revocable Trust may also be accomplished by a Will.
Additional benefits of Revocable Trusts may exist if the grantor is or may become disabled. Trusts can serve as a vehicle allowing a family member or institution to easily transition into managing the assets of a disabled individual.
While a well drafted Will in Georgia can almost always accomplish the required estate planning objectives, a Revocable Trust may be the best option for individuals seeking heightened privacy or those with unique family situations. An individual must weigh these benefits with the added complexity, necessary funding and cost of a Revocable Trust to determine if it is the best option.
Bryan A. Schivera is a partner in Oliver Maner’s tax and corporate department. He can be reached at firstname.lastname@example.org or 912.236.3311.