Understanding how to properly select the trust account best suited to your needs requires a careful evaluation of all of your fixed assets and current earnings. To make the critical choices involved with protecting your wealth from excessive taxation, you and your Peachtree City estate planning attorney must also carefully examine all of your family's current and future needs. Please review the estate planning definitions set forth below prior to first meeting with your lawyer. They’ll make it easier for you to more readily discuss some of the most general concepts you'll need to understand.
Key Facts to Understand about Common Types of Trust Accounts
- Testamentary trusts. Included as part of your will, these are designed to transfer your estate assets when you pass away. Testamentary trusts are different than “living” trusts which are created during your lifetime and can allow assets to be given to beneficiaries while you're still alive. (You should also avoid confusing testamentary trusts with “living wills” which clearly spell out the types of end-of-life measures you’re willing to accept once your health starts to seriously decline);
- Bypass trusts. These are frequently used by married couples. Once the first spouse dies, his or her estate is placed in the bypass trust. The surviving spouse has the right to use this trust property (and the income it produces) while still alive – but will never actually own it. This type of trust account saves money because it reduces the taxes that can be imposed against the second spouse’s estate when he or she passes away;
- Revocable trusts. This type of trust simply means what its name implies -- once you place funds into this type of trust account – you are able to remove them -- although taxes can be assessed at that time;
- Irrevocable trusts. Once you place money into one of these trusts, it remains there for the designated “life” of the trust – until the trust is set to expire (when the remainder will be distributed to the named beneficiaries.
If you’re uncertain about whether you have enough money to justify creating a trust, you can openly share that with your Peachtree City estate planning attorney while discussing the advantages that various trusts can provide. In addition to providing you with considerable privacy regarding your estate assets – trusts can also provide for your daily living needs should you become ill or disabled. Should you want to create this latter type of trust, just be prepared to name the most honest and responsible person you know to act as your trustee.
To obtain help with satisfying all of your Georgia estate planning needs, please contact the Law Offices of Shane Smith today. You can schedule your free initial consultation with a knowledgeable Peachtree City estate planning attorney by calling: (770) 487-8999.