Common errors in creating a living trust

| Mar 9, 2018 | Trusts |

A living trust can be a powerful tool in estate planning for people in Georgia. With this legal tool, assets skip probate and go directly to beneficiaries. Unlike a will, a living trust is also private. Furthermore, it does not require the creator to give up ownership of assets. The creator simply acts as trustee. If the creator becomes incapacitated, a successor trustee can manage the assets on the creator’s behalf.

However, there are some common errors that people make that mean their beneficiaries never get the full benefit of the living trust. One of the most common is failing to fund the trust. Creating a trust is more complex than simply drawing up the document. It is necessary to change the ownership of assets so that they belong to the trust.

Real estate deeds will need to be altered and placed in the name of the trust as will any vehicle titles. Most banks will have forms that a person can fill out to change the account so it’s in a trust’s name. Assets that a person fails to place in a trust may go through probate.

Another common error is not involving successor trustees. These trustees, who will take over when a person dies or becomes incapacitated, need to be familiar with the contents of the trust and its location.

An attorney could discuss the different benefits of trusts in estate planning. For example, a trust can be used to protect assets from creditors if a beneficiary is in debt. A trust can also tie distributions to specific times or accomplishments in a beneficiary’s life, such as finishing college or getting married. With legal assistance, an estate holder could make decisions based on their specific goals.