North Georgia Elder Law April 2019

Kevin’s Peace of Mind

www.kevintharpe.com (770) 503-1022

April 2019

Which Legal Document Serves as the Best Estate Planning Tool?

A Revocable Trust!

If you’ve been reading this newsletter over the last fewmonths, then you know that in January, I used an analogy about a hot rod restoration kit to demonstrate that a will is simply a car with no engine—you need a title of assets tomake the car drivable. Then, in March, I explored the twomost important pieces of information to consider when searching for a way to keep assets protected.

1. The type of asset determines the type of protection.

2. Do not give up ownership of your assets during your lifetime.

As a follow-up to those articles, this month, I’m going to talk about a legal document that allows you to tie together the title and type of asset without forcing you to give up ownership. This legal document is a revocable trust. Estate planning is all about answering this simple question: What will happen tomy assets when I die? Most people, including attorneys, focus on one type of legal document, a will. Unfortunately, a will won’t allow you to tie a title and type of asset together like a trust. A trust is not only a legal document but also a legal entity. In other words, a trust acts as a person. You can title assets in the name of a trust, including your home, financial accounts, and more. You don’t give up ownership when you title assets in the name of a revocable trust, and the type of asset does not change. For example, when you title your home in the name of a revocable trust, it continues to be your home, whichmeans it remains protected if youmove into a nursing home. There is a myth circulating, one that is often perpetuated by other attorneys, that the only way you can protect your assets if you go into a nursing home is through

an irrevocable trust. The opposite is true. If you title assets in the name of an irrevocable trust, you give up ownership. We already know that the type of asset determines protection, and as long you don’t give up ownership, your assets will remain protected. How can an irrevocable trust protect your assets, then? In our firm, we recommend revocable trusts as estate planning tools that will protect your ownership over your assets, protect you from probate, and protect your surviving spouse or beneficiaries if something happens to you. It will let you plan for any“what-if”situation and allow you tomake alterations to keep up with life’s circumstances or curveballs—unlike irrevocable trusts, which are permanent. After you pass away or become incapacitated, a revocable trust can no longer be changed. Our firm does not recommend revocable living trusts to protect assets from nursing homes or other risks, since protection of assets from nursing homes depends upon TYPE of asset, not type of trust.

So, if you tie together all the advice I’ve given you in the past fewmonths, you’ll recognize that there are 3 pillars of estate planning.

1. Title of asset is coordinatedwith theType of legal document.

2. Type of asset is coordinatedwith theType of legal document (without giving up ownership).

3. TheType of legal document that ties it all together is a revocable trust.

If you want to knowmore about how a revocable trust protects your ownership over assets, protects fromprobate, protects your surviving spouse and other beneficiaries, and allows you tomake changes tomatch any life-changing circumstances, don’t hesitate to reach out to our office. We’ll answer any questions youmight have!

-J. Kevin Tharpe

www.kevintharpe.com | 1

Published by The Newsletter Pro • www.newsletterpro.com

www.kevintharpe.com

Made with FlippingBook flipbook maker