Irrevocable Trusts are an integral part of most asset protection planning strategies. They are used to protect property and assets from nursing homes and other predators, and, depending on your individual situation, can end up saving you thousands of dollars. East Cobb trusts lawyers have put together some of the basics to give you everything you need to know about Irrevocable Trusts.
Just as the name suggests, an Irrevocable Trust cannot be terminated once it is created, which is what sets it apart from a Revocable Trust. The reason it cannot be revoked is because of the many benefits afforded by the trust for protecting assets and shielding against taxes. Revocable Trusts are good for avoiding probate and allowing successor trustees to manage affairs if the grantor becomes incapacitated, while Irrevocable Trusts are mainly used for asset protection purposes.
A Living Trust
There are actually two types of Irrevocable Trusts – Living and Testamentary. A Living Trust comes into effect and is irrevocable as soon as it is initially funded, meaning the ownership of assets changes while the grantor is still alive and stays that way after the grantor passes away. A Testamentary trust becomes irrevocable when the grantor dies, meaning the terms of the trust cannot be changed after that point. Most Revocable Trusts become Irrevocable at the time of the grantor’s passing, while other Testamentary trusts are created through the Last Will and Testament.
Different Types of Irrevocable Trusts
As noted earlier, Irrevocable Trusts are designed to save money, either by reducing taxes or protecting assets. There are many different types of Irrevocable Trusts available depending on what situation you’re in and what goals you’d like to accomplish. Here are a few of the irrevocable trusts and their benefits:
- A Bypass Trust is used to significantly reduce estate taxes once the second spouse has passed away. The trust holds all the assets from the first spouse, meaning the surviving spouse does not actually own the assets. This reduces the amount of the estate for estate tax purposes.
- A QTIP Trust is used to delay or postpone the payment of estate taxes once the second spouse passes away.
- A Medicaid or Special Needs Trust holds ownership of a person’s assets in order to make them eligible for state and/or federal benefits, either when it is time to enter a nursing home or if the benefits are in danger of being lost due to an inheritance.
If you have questions about setting up an Irrevocable Living Trust, or if you’d like to have your current Irrevocable Living Trust reviewed by an experienced trust attorney, please give our East Cobb estate planning and asset protection planning law firm a call at 770-425-6060, or email us at email@example.com to set up a consultation.
Settling a probate estate in Cobb County requires quite a bit of time and a lot of organization. It has the potential to be a long, drawn-out process depending on the state of affairs of the deceased and how easy it is to work with the probate court. However, if you’re well-equipped and prepared to deal with the role and duties of an Executor, you may be able to settle the estate in a timely, uncomplicated manner. Georgia probate attorneys have put together these five steps for settling a probate estate.
- Gather Documents
The Last Will and Testament is the first document to come to mind when a person passes away and an Executor needs to start handling the estate, but it’s not the only one. Deeds, bank statements, insurance policies, and any other documentation relating to personal or business finances need to be located. In addition, numerous documents and forms must be filed with the probate court in order to get the probate process started.
- Notify the Proper Agencies
It is the Executor’s responsibility to notify any agencies the deceased had dealings with at the time of death, including banks, utility companies, or any other business where the deceased had an account. In addition, government agencies such as Social Security, Medicaid, and the VA need to be notified if the deceased was receiving benefits at the time of death.
- Create an Inventory and Have Property Appraised
In most cases, the probate court will require a thorough inventory of the deceased’s assets and property. This is for numerous reasons including estate tax purposes and beneficiary designations. It may also be necessary to have some property appraised, especially if it is collectible. This includes automobiles, art, jewelry, antiques, and even items such as baseball cards or comic books.
- Collect Debts and Pay Bills
As we talk about below, one of an Executor’s duties is to make distributions to beneficiaries. Before this can happen, the assets in the estate must be fully accounted for, and this includes debts owed to and by the estate. Pay any bills owed by the estate, but also seek out any money that may be owed to the estate in order to begin making the correct distributions to beneficiaries.
- Make Distributions to Beneficiaries
The Last Will and Testament will direct how distributions should be made to beneficiaries, but it is the responsibility of the Executor to make those distributions. All distributions must first be approved by the Cobb County probate court in order to ensure that all debts have been paid by the estate before beneficiaries receive assets. This is a complicated step and may require the help of a Cobb County probate lawyer.
If you are an Executor and need help settling an estate, or if you would like to know how you can possibly avoid the probate process through the use of a Revocable Living Trust, please give our East Cobb probate law firm a call at 770-425-6060, or send us an email at steve @ georgiaestateplan.com to set up a consultation so you can see how we may help you.
If you have a properly executed will or trust in place, good for you! You’ve taken a great step toward protecting your assets for future generations. But, establishing an estate plan is only the first step. You still need to make sure that your plan will stay rock solid by keeping it up to date.
With each life change you will need to adjust your estate plan accordingly. If you experience changes to your career, health, residence, family or even tax status, your estate plan can be derailed. In some cases, a change could create new opportunities that can help you increase your net worth.
As Marietta estate attorneys, we don’t want you to spend an unreasonable amount of time continually reviewing your estate plan. A quick and easy way to determine whether you need to update your will or trust is to simply put your plan through the following “stress test.”
- Have there been any “big events” since your last updated your plan? – Most “big events” are related to your family; divorce, a new baby, a death. But a big event could also be business related and sometimes it’s not really big at all. For example, you may simply change your mind about the legacy you want to leave. If any of these have taken place in your life, consider it a trigger to look at your estate plan.
- Who is your named executor or trustee? – If you were to write a new estate plan today would you keep the same executor or trustee? If not, it’s time to update that plan.
- Have you reviewed your insurance plan? – Check your policy to see who you named as beneficiary and update that as needed.
- Have you entered into a joint property agreement with someone other than a spouse? – It’s not just property you own outright that should be in your estate plan. You should also include any property you jointly own with someone else.
- How is your record keeping? – It is important to stay organized so that your executor or trustee has a clear understanding of everything in your plan. If it’s been a while since you’ve reviewed and reorganized your records, do so now!
- Has it been 5 years or more since you looked over your plan?- Even if nothing in your life has changed, it is important to at least review your plan with an experienced Marietta estate planning attorney every five years because estate planning laws and rules are constantly shifting. Your Marietta attorney may be able to save your beneficiaries some trouble after your passing. Or, it is possible that you may be missing out on a benefit you didn’t even know existed. Just make it a rule of thumb to calendar a plan review every 3-5 years to be safe.
Getting your estate plan done is a great way to protect your wealth and everyone you love. But, consider it a living organism that could shift and change over time. Give your plan regular stress tests and then call our Marietta estate lawyers at 770-425-6060 and make an appointment the moment you suspect changes are needed.
You have probably seen so-called “standard” (a.k.a cheap) living trusts advertised all over the Cobb County area. Seminars, direct mail, and telemarketing are all common marketing techniques for the companies that sell “Do-It-Yourself” legal plans.
But, buyer beware! These one-size-fits-all estate plans are NOT created to deal with your unique situation or handle your unique assets. Without a plan suited to your individual needs, your assets may not go to the people that you’d like and could also cause confusion and undue stress at a very difficult time.
Many DIY legal companies lure buyers by claiming to use “real attorneys” to set up your trust, but often the attorney is just a front man and plays a very small part (if any!) in creating the trust or will. These companies may also exaggerate their ability to avoid taxes and protect assets. And, the companies/sales people will never give you a chance to verify their credentials.
Many DIY legal companies will also use names that are intended to confuse you into believing that they are a part of a legitimate organization like the American Association of Retired People (AARP). Another common tactic is that they may talk you into designating a representative of their company to serve as trustee or executor of your estate. We’ve even heard about a company that suggested that people add them as an heir!
Rather than setting up fraudulent wills and trusts, some companies exist solely to steal your identity. They will try to scare you or make any promise you’d like to hear to get you to hand over your personal information so they can steal your identity.
You should never make a buying decision if you feel pressured to do so on the spot. Instead, take your time and reach out first to a licensed and qualified estate planning attorney here in East Cobb County. Even if you end up with a document that is titled “Trust” or “Will,” it may not be worth the paper that it is on. Trusts and wills are unique and will need to be updated throughout your life so they will hold up during probate. If your trust does not stand up during probate, it is no different than not having a trust at all.
A one-size-fits-all approach to estate planning in East Cobb is rarely the best plan for anyone and may make life even more complicated and costly for your heirs if something happens to you. If you’d like to better educate yourself in this area, we invite you to contact our East Cobb estate planning law firm to set up a complimentary Georgia Family Treasures Planning Session in order to review any DIY documents that you may be considering. Just call us at 770-425-6060 or email firstname.lastname@example.org.