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Determining if two trusts are needed

On Behalf of | Dec 16, 2019 | Trusts |

Wills and trusts are designed to allow a person to control their assets and make sure their families are provided for when they are gone. Georgia residents may wonder if it is possible to have more than one trust and if a second trust would revoke the first one.

In most cases, a second trust is not going to revoke a prior trust. It is important for individuals to understand the differences between trusts and wills. When a person creates a will, there is likely going to be a provision stating that if the person creates a new will, the previous one will be revoked. Trusts usually do not work that way.

The one exception would be if a person decided to restate or completely amend the first trust, but it is important to understand that restating a trust is not the same as creating a new trust. It is simply an amendment of it. Even a complete amendment of the trust is still an amendment. Some trusts may contain a provision that would revoke the first trust, but this is not common.

Individuals who are interested in a second trust usually find that using the correct wording is all that is needed in order to make sure their wishes are carried out. For example, a parent may think that they need two trusts in order to divide their assets if the parent has two children and wants their property distributed evenly between them. However, they want only one of the children to receive the family’s lake house. Instead of creating two trusts, simple language can be used to express a person’s wishes.

One situation where two trusts may make sense would be in the case of life insurance policies. However, a person should understand how their estate would be subject to federal taxes. A lawyer may answer a person’s questions about trusts and estate planning. They could help their client create documents that are legally binding and help them fully understand any tax implications that would apply to their family.

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