Building an estate plan is one of the most meaningful things you can do for the people who depend on you. It gives you control over your financial affairs, your healthcare decisions, and ultimately, the legacy you leave behind. And when you build that plan in Georgia, including the right types of trusts can make a significant difference in how effectively your wealth is protected, managed, and passed on.
Trusts are among the most versatile tools in estate planning. Depending on your goals and your family’s circumstances, they can help you avoid probate, provide for a surviving spouse or a child with special needs, protect assets from creditors, reduce tax exposure, and ensure that your beneficiaries receive their inheritance on your terms rather than all at once. But not every trust works the same way, and choosing the right one — or the right combination — requires understanding what each type does and how it fits into Georgia law.
This guide walks through several key types of trusts that Georgia families should consider when building or updating their estate plans.
Revocable Living Trust
A revocable living trust is the most commonly used trust in estate planning, and for good reason. It offers flexibility, control, and one of the biggest practical benefits in estate planning: the ability to bypass probate.
Here’s how it works. You (the grantor) create the trust, transfer ownership of your assets into it, and typically name yourself as the initial trustee. You retain full control over the trust’s assets during your lifetime — you can buy, sell, add, or remove property at any time. You can also amend the trust’s terms or revoke it entirely, as long as you are mentally competent to do so. When you pass away, the trust becomes irrevocable, and your designated successor trustee distributes the assets to your named beneficiaries according to the instructions you’ve laid out in the trust document.
Because the assets are held in the trust’s name rather than yours individually, they do not go through probate. In Georgia, while probate is generally less burdensome than in some other states, it is still a court-supervised process that can take 12 to 18 months for uncontested cases and significantly longer if disputes arise. Probate proceedings are also public record, meaning anyone can access details about your estate, your assets, and your beneficiaries. A revocable living trust keeps all of that private.
Under Georgia law, a revocable living trust must be in writing — oral trusts are not recognized for estate planning purposes. The grantor must be at least 18 years old and of sound mind, as established under Georgia Code § 53-12-20. While notarization is not strictly required, it is strongly recommended and is standard practice, as it helps prevent challenges to the trust’s validity. If real estate is being transferred into the trust, the deed must be notarized and recorded with the county clerk of the superior court.
Georgia adopted the Uniform Trust Code (O.C.G.A. Title 53, Chapter 12), which governs how trusts are created, administered, modified, and terminated in the state. One important provision under Georgia law: if there are co-trustees, decisions must be unanimous unless the trust document provides otherwise.
One of the most common mistakes people make with revocable living trusts is failing to properly fund them. Creating the trust document is only the first step. For the trust to actually control your assets, those assets must be retitled in the trust’s name. Real estate requires a new deed. Bank and investment accounts must be retitled. Retirement accounts like IRAs and 401(k)s generally cannot be retitled directly into a trust but can name the trust as a beneficiary, which carries its own set of tax implications worth discussing with a qualified professional. If you create a trust but never transfer your assets into it, those assets may still have to go through probate — defeating one of the trust’s primary purposes.
A revocable living trust also provides an important layer of incapacity planning. If you become unable to manage your own affairs due to illness or injury, your successor trustee can step in and manage the trust’s assets on your behalf without the need for a court-appointed conservatorship. This can save your family considerable time, expense, and emotional stress during an already difficult period.
It’s worth noting that a revocable living trust does not, by itself, provide asset protection from creditors or reduce estate taxes. Because you retain control of the assets during your lifetime, they are still considered part of your estate for tax and creditor purposes. For those goals, other types of trusts may be more appropriate.
QTIP Trust
A Qualified Terminable Interest Property trust — commonly called a QTIP trust — is a specialized estate planning tool that is especially valuable for people in second or subsequent marriages, or anyone who wants to provide for a surviving spouse while also controlling what happens to the assets after that spouse passes away.
The concern that QTIP trusts address is a common one: you want to make sure your spouse is financially taken care of for the rest of their life, but you also want to ensure that your children (particularly children from a prior marriage) ultimately receive the remaining assets. Without a QTIP trust, a surviving spouse who inherits assets outright could remarry, change their own estate plan, and redirect those assets away from your children entirely.
A QTIP trust solves this by creating a structure in which your surviving spouse receives all of the income generated by the trust’s assets for the rest of their life — paid at least annually — but does not have ownership or control over the trust principal. The trustee may also be given authority to distribute principal to the spouse for health, education, maintenance, and support, depending on how the trust is drafted. When the surviving spouse passes away, the remaining assets in the trust are distributed to the remainder beneficiaries you’ve chosen — typically your children.
From a tax perspective, assets placed in a QTIP trust qualify for the unlimited marital deduction, which means they are not subject to federal estate tax at the time of the first spouse’s death. Instead, estate taxes are deferred until the surviving spouse passes away. This can be a powerful planning strategy, especially for larger estates. The trust must be irrevocable once it takes effect, and the executor must make a QTIP election on the deceased spouse’s estate tax return for the marital deduction to apply.
QTIP trusts can be established as testamentary trusts (created through a will and taking effect at death) or as part of a living trust arrangement. In either case, proper drafting is essential. The trust must meet specific IRS requirements: the surviving spouse must be the sole beneficiary during their lifetime, they must receive all income from the trust, and no other person can receive distributions while the spouse is alive.
For Georgia families navigating blended family dynamics, a QTIP trust can also help ease tensions. The surviving spouse has the assurance that they will be financially supported for life, while the children from a prior marriage know that the remaining assets are protected for them and cannot be redirected by a stepparent.
Irrevocable Life Insurance Trust (ILIT)
Many people are surprised to learn that the death benefit from a life insurance policy can be included in your taxable estate. If you own a $1 million life insurance policy at the time of your death, that $1 million is added to the total value of your estate for federal estate tax purposes. For individuals whose estates approach or exceed the federal estate tax exemption — currently $13.99 million per individual for 2025 and expected to rise to approximately $15 million in 2026 following the One Big Beautiful Bill Act — this can create a significant tax liability.
An irrevocable life insurance trust, or ILIT, is designed to solve this problem. When you create an ILIT and transfer ownership of your life insurance policy to the trust, the policy is no longer considered part of your estate. The trust, not you, owns the policy. When you pass away, the death benefit is paid to the trust, and the trustee distributes the proceeds to your beneficiaries according to the trust’s terms — free of estate tax.
Because an ILIT is irrevocable, you give up direct control over the policy once it’s been transferred to the trust. You cannot change the trust’s terms, take the policy back, or name new beneficiaries without working within the framework of the trust document and applicable law. This is a significant trade-off, which is why it’s important to work with an experienced attorney who can draft the trust to include appropriate flexibility where Georgia law allows.
There is also a timing consideration. If you transfer an existing life insurance policy to an ILIT and die within three years of the transfer, the IRS may still include the policy’s death benefit in your taxable estate under the three-year lookback rule. One way to avoid this is to have the ILIT purchase a new policy from the outset, rather than transferring an existing one.
Beyond estate tax savings, an ILIT also offers probate avoidance (since the trust, not your estate, receives the proceeds), creditor protection for the policy’s cash value and death benefit, and the ability to control how and when your beneficiaries receive the insurance proceeds. For example, you can direct the trustee to distribute funds over time rather than in a single lump sum — a valuable feature if your beneficiaries are young or may not be prepared to manage a large inheritance.
Retirement Plan Trust
Retirement accounts — IRAs, 401(k)s, 403(b)s, and similar plans — are often among the largest assets in a person’s estate. And thanks to significant changes in federal law over the past several years, how these accounts are handled after the account holder’s death has become more complex and more consequential from a tax standpoint.
The SECURE Act of 2019 fundamentally changed the rules for inherited retirement accounts. Before the SECURE Act, most non-spouse beneficiaries could “stretch” distributions from an inherited retirement account over their own life expectancy, spreading out the tax burden over decades. The SECURE Act eliminated this option for most beneficiaries and replaced it with a 10-year rule: the entire inherited account must be fully distributed within 10 years of the account holder’s death.
Certain individuals — called eligible designated beneficiaries — are exempt from the 10-year rule. These include a surviving spouse, a minor child of the account holder (until age 21), a disabled individual, a chronically ill individual, and a beneficiary who is not more than 10 years younger than the account holder. Everyone else, including most adult children and grandchildren, is subject to the 10-year payout requirement. The IRS finalized regulations in July 2024, and enforcement of annual required minimum distributions within the 10-year window began in 2025 for certain beneficiaries.
This is where a retirement plan trust comes in. By naming a properly structured trust — rather than an individual — as the beneficiary of your retirement account, you can control how and when distributions are made to your beneficiaries after your death. This is particularly useful if you have concerns about a beneficiary’s ability to manage a large sum of money, if a beneficiary has creditor issues, or if you want to protect a beneficiary with special needs.
There are two main structures for retirement plan trusts. A conduit trust requires the trustee to pass all distributions from the retirement account directly through to the named beneficiary in the year they are received. This offers less asset protection but is simpler from a tax perspective, since the distributions are taxed at the beneficiary’s individual rate. An accumulation trust allows the trustee to retain distributions inside the trust, providing greater protection from creditors and more control over timing. However, income retained in the trust is taxed at the trust’s own tax rate, which reaches the highest federal bracket of 37% at just over $15,000 of income in 2025 — far lower than the threshold for individuals.
Because of the SECURE Act’s changes, many trusts that were drafted before 2020 with conduit provisions may no longer function as the grantor intended. What was once a slow, controlled drip of distributions over a beneficiary’s lifetime could now be a mandatory full payout within 10 years. If your estate plan includes a trust that was drafted before the SECURE Act, reviewing and potentially updating it should be a priority.
Special Needs Trust
If you have a family member with a disability, a special needs trust is one of the most important estate planning tools available. Its purpose is to provide supplemental financial support to a person with disabilities without disqualifying them from means-tested government benefits like Supplemental Security Income (SSI) and Medicaid.
This matters enormously because SSI and Medicaid have strict asset limits. To qualify for SSI, an individual generally cannot have more than $2,000 in countable resources. In Georgia and 38 other states plus the District of Columbia, receiving even one dollar of SSI automatically qualifies an individual for Medicaid — a program that covers essential health care and long-term care services. If a person with a disability receives an outright inheritance or gift that pushes them over the asset limit, they could lose both SSI and Medicaid eligibility, creating a devastating gap in coverage.
A special needs trust avoids this outcome. Assets held in a properly drafted special needs trust are not counted as the beneficiary’s own resources, so they do not affect eligibility for government benefits. The trustee can use trust funds to pay for supplemental needs that government programs do not cover — things like additional medical care, dental work, therapy, assistive devices, vehicle modifications, recreation, education, personal care items, and travel.
There are two primary types of special needs trusts. A third-party special needs trust is funded with assets that belong to someone other than the beneficiary, such as a parent or grandparent. Under Georgia law, this trust can be either revocable or irrevocable, and can be created during the grantor’s lifetime or through a will. One significant advantage of a third-party trust: when the beneficiary passes away, the remaining assets can go to other family members or beneficiaries of the grantor’s choosing — there is no requirement to reimburse Medicaid.
A first-party special needs trust (sometimes called a self-settled or payback trust) is funded with the disabled individual’s own assets — for example, from a personal injury settlement or an inheritance received outright. Federal and state law require that when the beneficiary passes away, any remaining funds in a first-party trust must first be used to reimburse Medicaid for benefits it provided during the beneficiary’s lifetime.
Coordination is key. If you have a child or family member with special needs, it’s important that your will, trusts, beneficiary designations, and even the estate plans of other family members (such as grandparents) all direct assets to the special needs trust rather than to the individual directly. Even a well-intentioned gift made outside the trust can jeopardize the beneficiary’s government benefits.
Choosing the Right Trusts for Your Georgia Estate Plan
No two families have the same needs, and no single trust does everything. The right approach depends on your specific goals, your family structure, the size and nature of your assets, and your concerns about what the future may hold.
A revocable living trust may be the right foundation for families who want to avoid probate and maintain flexibility. A QTIP trust may be essential for blended families navigating second marriages. An ILIT can protect larger estates from unnecessary tax exposure. A retirement plan trust can preserve control over the largest asset many families own. And a special needs trust can make the difference between financial security and a devastating loss of benefits for a loved one with a disability.
These trusts can also work in combination. A comprehensive estate plan might include several types of trusts alongside a will, powers of attorney, healthcare directives, and carefully coordinated beneficiary designations.
How Yeom Baek Can Help
At Yeom Baek, we understand that navigating the world of trusts can feel complex and overwhelming. Our estate planning attorneys work with Georgia families to identify the right strategies for their unique situations — whether that means establishing a single revocable living trust or building a more comprehensive plan that includes multiple trust structures working together.
Our trust planning services include:
- Revocable living trusts and irrevocable trusts
- QTIP trusts for blended families and second marriages
- Irrevocable life insurance trusts
- Special needs trusts for beneficiaries with disabilities
- Retirement plan trust coordination in light of the SECURE Act
- Trust funding guidance to ensure your assets are properly titled
- Ongoing trust review and updates as your life and the law evolve
The decisions you make today about how your estate is structured will shape your family’s financial future for years to come. Let us help you get it right.
Contact Yeom Baek today to schedule a consultation and start building the trust strategy that fits your family’s needs.
At Yeom Baek, we prioritize your family’s future. Schedule your estate planning consultation today and take control of your legacy.
This blog post is for general informational purposes only and does not constitute legal advice. Trust and estate planning laws are complex and subject to change at both the state and federal level. For guidance specific to your situation, please consult with a qualified estate planning attorney licensed in Georgia.
