Did you know that there are different types of trust documents? While many people have heard of revocable and irrevocable living trusts, there are many other types of trusts a person can create when estate planning in Georgia.
Some of the different types of trusts include:
- Revocable trust – This type of trust can be changed or cancelled at any time, which means a grantor can add or remove assets and beneficiaries from the trust. Additionally, a grantor can add provisions after the trust has been created and can even change the terms of the trust. However, a revocable trust will become an irrevocable trust upon the grantor’s death, unless the grantor gave someone else the power to amend the trust. Upon death, the assets will not pass through probate, but they are distributed according to the trust terms. While this saves time and money avoiding probate, revocable trusts do not save estate taxes.
- Irrevocable trust – This type of trust is a trust that cannot be dissolved, changed, or cancelled. This means that once the trust has been created, the terms of the trust cannot changed—not even to change a beneficiary. Although this type of trust cannot be changed or cancelled, it has advantages, such as estate tax advantages that will help avoid estate taxes.
- Testamentary trust – This type of trust is created and funded under the terms of a grantor’s will. Grantors can change the terms of their trusts by amending their wills; however, upon death, this trust becomes irrevocable. All assets are then transferred to the trust through probate.
- Inter-vivos trust – This is also known as a living trust because it is created when a person is still living, and the trust can either continue upon death or end with it. Any assets in a living trust will avoid probate, and all assets and property will be distributed according to the terms of the trust, not a person’s will.
These trusts mentioned above are the common types of trusts; however, there are more complex trusts that are beneficial in certain situations. These trusts can include generation-skipping trusts (also known as a dynasty trusts), qualified terminable interest property trusts, qualified personal residence trusts, credit shelter trusts, and irrevocable life insurance trusts.
For more information about what type of trust is perfect for you and your situation, call an experienced Norcross estate planning attorney at the Law Offices of Shane Smith to arrange a consultation today at (770) 487-8999.