Trusts are incredibly valuable tools in the estate planning process. Oftentimes, however, a trust can only be as strong as the strategy behind it. In this “Wealth Matters” radio show episode, we talk with Richard Barnes, Partner at Barnes Law LLC, and Caroline Bradshaw, Senior Vice President and Managing Director for Trust Administration at Cumberland Trust. The experts break down what a trust is, and what practices will benefit the usefulness of the trust.
What is the Difference Between a Trust and a Will
A trust and a will will perpetually be associated with each other, as a trust often informs a will and vice versa. The two documents are created and behave differently, however. A will determines asset allocation. The stipulations of a will take effect when you pass away, but the document is fully changeable until then. Alternatively, a trust is an agreement between the benefactor and a third party, or the benefactor and himself, about how assets should be managed. It relies on interpretation on how an individual would best like to manage their assets.
Richard Barnes says that “a will can be signed today, but you may not pass away, and hopefully won’t pass away, for a long time. There’s a period of time, as people are living longer, where they may need a little bit of help. A will doesn’t really do anything to protect against that so much as a trust.” A trust can cover things that a will might not, and offers a level of protection if one becomes incapacitated.
Caroline Bradshaw describes the difference by pointing out that a will is a one-time allocation, while a will is a dynamic plan. “A trust is a dynamic instrument that lives with your family as they mature, as they have children, as circumstances, sometimes unforeseen circumstances, come up,” Caroline says. “It creates challenges, but also creates opportunities to help families throughout their life cycles.”
Can I Have a Trust Without a Will When Estate Planning?
If set up correctly, a trust does not need to go through probate upon the death of the benefactor. Given many people’s aversion to the probate process, some benefactors may seek to create a trust without a will in order to avoid probate. The experts advise against this. Trusts are useful for many things, but wills make more definitive statements about asset allocation.
Meanwhile, Richard Barnes argues that the probate process in Georgia may be beneficial. Barnes says that probate “helps people who have a particular interest in the person who died and their assets. It lets your children and your loved ones come to the court and say, ‘hey, look, I don’t think this is really what the benefactor would have wanted’.” Probate gives interested parties a chance to admit that there might have been a mistake.
How Do I Choose a Trustee?
When creating a will, the experts remind benefactors that a trust is only as strong as its trustee. Given the importance of the role, an individual might debate whether to appoint a family member or a professional or corporate trustee. Family members might have intimate knowledge of the family and its history, but professionals will bring in-depth knowledge of the probate process. The experts agree that a corporate trustee is an invaluable resource. However, to get the benefits that an individual trustee might offer, seek a bank that supports co-trusteeship. Caroline Barnes says “we welcome individual co-trustees, and we can work collaboratively to really understand the family’s needs, the dynamics, and the potential pitfalls.”
If an individual prefers to appoint a family member as trustee, they will often choose their spouse or oldest child. Individuals sometimes make a poor decision about their trustee for various reasons. The experts recall a client who chose a particular child as the trustee because the other child was a generally busier person. The experts advise choosing a trustee who is used to dealing with complex documents and who can best manage an often challenging process.
Premier Trust Litigation in the State of Georgia
If you find yourself in a trust dispute, Gaslowitz Frankel LLC are experts in trust litigation. When you contact our law office at 404.892.9797, you’ll be in touch with the premier fiduciary litigators for the state of Georgia.
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Gaslowitz Frankel LLC is the Southeast’s premier fiduciary litigation law firm. Our legal team specializes in all aspects of fiduciary disputes with over 30 years of experience representing individuals, executors, trustees, and more in complex fiduciary disputes involving wills, estates, and trusts.
