A Living Trust is like a hope chest in your grandmother’s guest room.
What is a trust? This is a super common question we get at Atlanta Wills and Trusts. It is typically followed up by a few additional questions. Do I need a trust? Do I need a will if I have a trust?
Short answers:
A trust is a beautiful wooden box. You put things in this box to keep those things safe.
You may need a trust. Not everyone does, but a lot people who do not have a trust really need a trust and do not even know it!
Yes! You still need a will, even if you have a trust. It is a special will.
Long answers:
A trust is a legal instrument. A legal instrument that you can imagine creates (builds, after you go into a woodshop with me!) a beautiful wooden box. The box has a lid. There is a lock on the box. Most beautiful wooden boxes are “revocable living trusts.” “Revocable” meaning that the person who builds the box (the Grantor or Settlor) can make changes to the box anytime they want. The box is under the builder’s control, also. “Living” meaning you build it during your lifetime. The box lives alongside the builder (you!). There are trusts that get built after a person passes away. This isn’t that type of trust!
All the items you put into the beautiful wooden box will avoid probate! That’s right. You can have a beautiful wooden box AND still go through probate if you didn’t put the things in the box that would otherwise go through probate. A home is a great example here in Georgia of an asset that will go through probate (a court process, check out other posts!) if you do not put the house into your trust.
Not everyone needs a beautiful wooden box. The key questions I ask POTENTIAL new clients in a consultation is:
- Do you have kids under 21 years of age?
- Do you own real estate?
- Do you want to avoid probate?
- Do you want to make it easier on your family when you pass away to administer your estate?
If they answer yes to any of these questions, they either NEED trust or should have a trust. Here is one thing I will say: IF YOU HAVE MINOR CHILDREN YOU NEED A TRUST. There is no way around it. You need a living trust, also, to really avoid issues when you pass away.
But some people may not need a trust! But they still need a will.
Finally, even if you have a revocable living trust and even if that trust is chock full of your assets to avoid probate … you still need a will. It is like the safety net under the trapeze artist. You never want to you use it. You likely never will use it. But just in case …. you have it.