Parents in Georgia who are creating an estate plan may think that a will is the best way to pass assets down to children. A will can appoint guardians for minor children, but other vehicles have advantages as well.
Beneficiary designations and titles are a way of ensuring that assets pass to heirs quickly and privately. Beneficiary designations can be used with assets such as retirement accounts and life insurance policies. For property such as houses and vehicles, it is possible to add the heir to the title with rights of survivorship.
Trusts are extremely versatile and are not just for the wealthy. The most flexible type of trust is a revocable living trust because it allows the owner to make changes. The probate process that a will must go through is public, but a trust is in most cases not subject to it. A trust can be used to control how assets are distributed to an heir. For example, the money in a trust might be managed by someone other than the beneficiary. Distributions might come at certain intervals in a child’s life. A trust can also be used to give a greater share of the estate to a child with lower income or to put restrictions on how assets are distributed to a financially irresponsible heir.
Trusts are not only for wealthy people, but as an estate or family situation becomes more complex, a trust might be more useful. For example, a trust can help to preserve wealth for children from a first marriage as well as making sure that later children receive an inheritance as well. A trust can be set up to protect wealth from creditors, give to charity or skip a generation and pass wealth on to grandchildren. Although there are fees associated with trusts, they may still be less expensive than the probate process.