Estate Planning

A living trust is just what its name implies?a trust you establish while you're living. Living trusts can be "revocable" or "irrevocable," and there are unique characteristics to each. Although it's not normally intended to completely replace a will, a revocable living trust can be an effective way to maintain control of property during your lifetime?and a private way to dispose of it after your death.



Revocable Living Trusts

The benefits of establishing a revocable living trust?one that allows you to change the terms at any time?are many. Here are some of the most important advantages.

• Professional management. You may not have the ability or the time now to act as your own trustee and manage your assets the way you want. A professional trustee will do that for you. You can then observe how your trustee manages your money and continually make clear to him or her exactly what you want done with your money during and after your life.
• Probate avoidance. At your death, the revocable trust will become irrevocable. Then the assets in your living trust will bypass the expense and delay of probate. Transfers will not be public, so your privacy will be preserved.
• Asset protection. A trust will protect beneficiaries from others (protecting children's inheritances, for example, from divorced spouses).
• Control of terms. You may select the location of your revocable trust, thus choosing the law that will govern its operation and the interpretation of your trust instrument. By choosing the law of one state over another, it may be possible to do things that you cannot do under the laws where you are domiciled.

The Irrevocable Charitable Trust

If you are interested in making a major charitable gift but feel you can't give up the income from your assets, consider an irrevocable charitable remainder trust. Eventually UGA will receive what's left of the trust after your lifetime (and that of another beneficiary, if you wish), but in the meantime you'll benefit in these ways.

• Tax savings. If you transfer long-term appreciated assets to a charitable trust, you'll receive an income tax deduction based on your age and the fair market value of the assets on the day you set up the trust. Plus, the transfer is not subject to up-front capital gains tax.
• Lifetime income. Every year, the charitable trust pays you (or your beneficiary) either a fixed income (with the annuity trust) or variable income (with the unitrust) You make the choice when you set up your trust.

See how a charitable remainder annuity trust can benefit you.

See how a charitable remainder unitrust can benefit you.