Trusts can be designed to serve some of the same purposes as wills, but some Georgia residents would do well to have both documents in their estate plans. A will on its own can transfer the assets of a person after he or she dies, and it’s the basic essential estate planning instrument for a reason. Trusts can lend many advantages that wills do not, including tax benefits during the life of the person who makes the trust, also called the settlor, and avoiding probate on the settlor’s death.
A trust is limited in that it can only control the distribution of assets that have been transferred to its possession. Assets that are not explicitly placed into a trust will not, in most cases, be under the control of the trustee. One popular structure that people use for their estate plans is a pour-over will that’s connected to a trust. With this structure, the will is drafted such that the assets of the estate are automatically transferred into the trust on the person’s death.
Structuring the estate with one or more trusts and a pour-over will ensures that the creator’s assets will be controlled by the terms of the trust and distributed by the trustee. This lends the advantages of the trust structure and the comprehensive coverage of a will. In cases where the person has a trust but no will, it is likely that some assets will transfer according to the state’s intestate statutes.
An attorney could help a client understand the differences between wills, trusts and other estate planning documents. Depending on the client’s circumstances, an attorney might recommend a pour-over will along with a revocable or an irrevocable trust. Legal counsel may also draft the legal documents necessary to establish the plan.