Wills and trusts are a valuable estate planning tool for asset protection. You’re probably familiar with a will, but a living trust in Michigan has certain benefits that make it advantageous to have a trust. This article discusses the advantages of living trusts and enumerates the steps to making irrevocable and revocable living trusts.
How Trusts Work
A trust is a legal document in your estate plan where you, the grantor, transfers ownership of your assets and property into the trust so that the trustee can manage and distribute the property in a trust account to your heirs after you die. A living trust (also known as inter vivos trust) is a type of trust that’s created while you’re alive, and this can either be revocable or irrevocable. As the name suggests, you’ll be able to modify a revocable living trust whenever you wish, but not an irrevocable living trust. An estate planning lawyer can help you decide which types of trusts best fits your estate plan.
Advantages of a Living Trust
The main advantage of establishing a trust is avoiding probate. Unlike living wills, a trust doesn’t have to go through the probate process. Probate refers to the process of proving your will in probate-court and transferring your probate estate after your death, which often proves to be costly and time-consuming.
Until the probate proceeding is completed, the beneficiary of a trust won’t be able to receive the trust-fund and real-property held on trust. While Michigan estate law adopted the Uniform Probate Code which simplifies the process of probate, this only applies to small estates with a net worth below a specified amount. Consult with a probate lawyer for information on how to avoid probate.
Another advantage of creating a trust is that it provides the privacy that a last will does not. Your will becomes public record once it’s probated, but trust law allows living trusts to remain private even after you pass away. Trusts are also more difficult to contest in court, adding an extra layer of security in ensuring the terms of your drafted trust agreement are carried out.
Lastly, setting up a trust allows you to have control of trust property and assets, as well as trust administration. You can set up certain assets and property in trust to be distributed by the trustee at certain times or under certain conditions. If you want to have more control over your estate plan, a living trust may be what you’re looking for.
How to Make a Living Trust
To set up a trust in Michigan, you only need to follow the following procedures.
- Decide what type of trust you want to establish. This includes choosing between shared and individual trusts, as well as revocable and irrevocable trusts.
- List down every property that you want to be held in a trust.
- Naming beneficiaries of the trust. A trust beneficiary can include your surviving spouse, children, family members, and friends.
- Designate a trustee who will manage your trust funds and property and a successor trustee who can take over their duties and responsibilities if the trustee becomes incapacitated or passed away.
- Create trust documents that detail the property held in trust, its beneficiaries, and the designated trustee. You may also include instructions for how you want your trust assets to be distributed.
- Sign your trust agreement in front of a notary public.
- Finally, transfer the title of your indicated property and assets into the living trust.
Hire Experienced Trust Attorneys
Estate planning law need not be so complicated or stressful for you and your loved ones. If you’re thinking of placing your personal property in a trust, make sure the estate planning documents you’re drafting are legally valid. Our trust and estate planning attorneys can help you establish a trust and secure your financial legacy. What are you waiting for? Contact Entrusted Estate and Asset Protection, PC and get a free estate plan review today!