Due to the many benefits of revocable living trusts, they are becoming increasingly common estate planning documents. But with their recent rise in popularity, several common misconceptions have emerged. Before you make any decisions, speaking with an experienced Atlanta living trust lawyer is important. Our skilled Atlanta estate planning attorney at Trace Brooks Law can do a comprehensive evaluation of your financial situation and walk you through why you should add a revocable living trust to your estate plan.

In this article, we answer several common questions about the benefits of revocable trusts.

Does a revocable living trust help me save on taxes?

No. Like other grantor trusts, revocable living trusts are ignored for income tax purposes during the grantor’s life. Taxable events that happen to trust-owned property during the grantor’s life must be reported on the grantor’s personal income tax return. Further, revocable living trusts and wills can accomplish the same tax benefits at death.

Does a revocable living trust protect my assets from creditors?

Asset protection is on many clients’ minds. A revocable living trust, however, is generally not an effective asset protection strategy. Because the grantor creates the trust and has full access to assets in a revocable living trust, Georgia law does not allow asset protection benefits during the grantor’s life or after death.

In very limited and rare circumstances, a revocable living trust may provide tangential asset protection benefits. Because it can be slightly more difficult for a creditor to collect from a trust than an estate, the trustee may have additional leverage in negotiating a settlement. Also, a revocable living trust may protect from a creditor of the estate that the grantor did not owe during their lifetime (this situation is rare). The limited circumstances in which a revocable living trust might protect your assets from current or future creditors should not be the primary reason to use a revocable living trust as your primary estate planning document. There are many more effective ways to protect your assets from current and future creditors, both during your life and after your death.

Contact an Atlanta Asset Protection Attorney at Trace Brooks Law to discuss options that could effectively protect your assets from current and future creditors.

Is a revocable living trust better than a will?

It depends. Whether a revocable living trust is better than a will depends on your unique circumstances and estate planning goals. Many clients balance the relative simplicity and cost-effectiveness of a will-based estate plan with the additional privacy and ease of administration afforded by a revocable living trust-based plan.

Contact an Atlanta Estate Planning Attorney at Trace Brooks Law with your questions about revocable living trusts, including whether a revocable living trust or will is right for you.