Who Do You Need for Your Trust?

There are a lot of legal terms used during the planning phase for your last will and testament. What do they mean? Do I understand the roles I am assigning in my will? Do I know what is required for these roles? Do I understand the lingo? You can call our Trust Department to discuss, or here are a few terms to review:

Executor – This is a person or entity, such as First American Bank, that is appointed in a will to administer the estate of a person who has died. The Executor’s function is to carry out the express terms of a will, including paying final debts, gathering and distributing assets to designated beneficiaries.

Trustee – A trust can be set up through your will. A trust does not exist until it is funded. In your will, a trust gives another party, as trustee, the right to hold property or assets for the benefit of a beneficiary.

Co-Executor – Same as Executor above except the role is shared and each Co-Executor has equal standing in decisions regarding the administration of the estate

Co-Trustee – Same as Trustee above except the role is shared and each Co-Trustee has equal standing in decisions regarding the administration of the estate

Successor or Contingent Executor/Trustee – Same as above for Executor or Trustee, except the original Executor must resign, die or be removed for the Successor Executor/Trustee to step into the role. It is a good idea to name successors in these roles as circumstances sometimes change.

Beneficiary – A person or entity designated to receive the income and/or principal of an estate or trust.

Heir – a person who is entitled by law or by the terms of a will to inherit from the estate of another. This comes into play in determining who should be notified when probating a will. Being an heir does not automatically mean you will be named as a beneficiary of a will. When there is no will, state law of intestacy dictates how property will be distributed to heirs.

Bequest – this is a gift from an estate that is designated for a certain person/entity to receive off the top and can include personal property, specific amount of money or a percentage of gross estate.

Residual – this is the remainder of an estate after all bequests have been fulfilled, all personal property distributed, and all debts and expenses have been paid.

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The Basics of Trusts

Navigating the world of trusts can be confusing, but fortunately, we’re here to help. There are many important decisions to make when creating a trust, however one of the first decisions to make is choosing what kind of trust you need at the moment. But before you can choose the type of Trust you need, it’s important to know the different types of Trusts, and fully understand what each one entails.

The two basic types of trusts are living trusts and testamentary trusts.

A living trust, which can also be known as an inter-vivos trust, goes into effect as soon as it is created. It also can be more private than some other types of trusts, because no one needs to know the terms besides the trustees, and it is not a public document, like a testamentary trust. The purpose of a living trust is to plan your estate while you are still alive.

A testamentary trust is part of a will, and does not become effective until after the individual passes away. Because it takes effect after death, it cannot be changed and is considered irrevocable. The person creating this trust is known as the "testator" and it is important to remember that a testamentary trust will not protect your assets from the probate process.

Another important thing to consider is whether your trust is revocable or irrevocable. A revocable trust can be altered or dissolved at any time, as long as the executor is still alive. It is more flexible than an irrevocable trust, and may help you avoid probate, but it is still subject to estate taxes. An irrevocable trust will transfer the grantor’s assets out of his or her estate, and can keep them from being subject to estate taxes. However,

once the trust is established, the grantor loses control of the assets and cannot alter the terms of the trust or dissolve it.

No matter what type of trust best fits your needs, First American can answer any questions you have. Remember, we offer executor and trustee services, and we are dedicated to helping our customers with this important role.



New Year’s Resolution and your Last Will and Testament

Have you made any worthwhile New Year’s Resolutions for 2016? Well, if you can’t think of one, may I suggest getting a will in place? The best gift you can give your loved ones is a plan!

You may say, “Well, I don’t really have any assets…” Even the smallest of estates are settled much more smoothly if you have a will. The state of Georgia does not have a small estate statute, so contacting your attorney and having a will prepared can save your family from a few administrative headaches. Also, if you die without a will (“intestate”), an Executor will have to be appointed by the Probate Court and Georgia state law dictates how your assets pass to your heirs.

In today’s estate planning environment, your attorney provides three documents for the price of one:  Last Will and Testament, Durable Power of Attorney for Healthcare, and a Financial Power of Attorney. These are the three basic documents that will allow your family to be able to handle your affairs when the need arises.

Before visiting with your attorney, give serious thought to who you will be naming to serve in the role of Executor, Trustee, Financial Power of Attorney, and Healthcare Power of Attorney. These are all very serious roles that require thoughtful consideration when you are making these designations. Is your estate simple or complex? Will your Executor need to be financially astute? Will there be potential personality conflicts between your Executor and beneficiaries? Does your Executor live out of state? Will your Executor have the time and expertise to handle your estate? All of these factors must be considered when choosing an Executor.

First American Bank offers Executor and Trustee services. When preparing your will, keep us in mind; we love to serve our customers in this very significant matter. Although it’s an unusual task to undertake, it’s an important thing to take care of and we’re happy to answer any and all questions you may have.

So, here is your challenge—make an estate plan and fulfill a worthwhile 2016 New Year’s Resolution!

jackie author