Estate holders in Georgia should think about taxes and income when planning for the future of their assets. The goal is for one to be able to have control over their assets after passing away.
In conjunction with a will, a trust is a legal document that provides instructions for distributing an estate. The terms of a trust establish how the assets can be used and distributed, and this may be the primary means of dispersing an estate if all or the majority of assets are in a trust.
While not always used primarily as a tax tool, a trust could provide tax advantages. When assets transfer to beneficiaries, a significant chunk of an estate could be taken in taxes. Items in a trust are taxed differently because the assets technically belong to the trust rather than the estate holder.
For tax benefits, one cannot just create a trust. One must also put assets in a trust’s control by titling the appropriate property in the name of the trust. This may include vehicles, real estate, bank accounts and investment accounts. A trust is not enforceable if there is nothing in the trust’s name. This would essentially mean that the trust is empty.
For a trust to be valid, one must follow state and federal laws when estate planning. Typically, a married person leaves behind assets to a spouse. After the last surviving spouse passes, an estate is distributed among family members, friends, charities and the like. A spouse is entitled to a portion of one’s assets, so a trust that disregards this may not be valid. Estate holders who remarry may be able to get valuable guidance from an attorney.