The choice of one of these trusts can offer advantages that some people prefer over a will. But, there are misunderstandings about what each type of trust can and cannot do.
Either type of trust can eliminate the need for probate. For both types, the creator of the trust, known as the grantor, transfers ownership of his or her property to the trust. If all of a person’s property is in the trust there is no need for probate of a will. However, for any number of reasons people sometimes do not put all their property into the trust. Therefore a backup will is often recommended, called a pour over will.
For asset protection purposes, an irrevocable trust is required. The revocable trust does not offer any asset protection. With a revocable trust, the grantor, the trustee, and the beneficiary are generally the same person. To protect assets from future creditors, the grantor must give up control of the property put in trust. With an irrevocable trust, an independent trustee is required, who must manage the property for the benefit of the beneficiaries of the trust.
Concerning estate taxes, a revocable trust does not reduce estate taxes. With an irrevocable trust, the assets are not subject to the estate tax generally. A person who creates an irrevocable trust transfers permanent ownership of his or her property to the trust. Therefore these assets are not a part of his or her taxable estate for estate tax purposes (with certain exceptions). At the present, the estate tax is only a problem for people with a net worth of more than approximately $5.4 million. Statistically, most estates are not subject to estate tax. However, for an estate that is large, the amount over $5.4 million is taxed at a relatively high rate. In certain situations, a married couple can have a higher estate tax credit by using portability of any unused portion of the $5.4 million estate tax credit. Laws can always change, so it still pays to be mindful of the estate tax.
Our office prepares wills and trusts after analysis of their assets, liabilities, personal factors, and legal goals.
David S. Walker, Attorney at Law
David Sinclair Walker, Jr. P.C.
Mailing address:
P.O.BOX 871329
Stone Mountain, GA 30087
Offices:
•North Gwinnett Office-
6340 Sugarloaf Parkway, Suite 200,
Duluth, GA 30097
•South Gwinnett Office-
2330 Scenic Highway,
Snellville, GA 30078
Telephone 770-972-3803;
Facsimile 770-921-7418
david.walker.law.firm@gmail.com
http://www.walker-law-firm.com
GA Bar No. 731725
Admitted in GA and D.C. UGA Law
Certified Mediator no. 5194-7574-0803-0720
