Estate Planning: Setting Up a Trust in Michigan
Making plans for after you pass away may be hard for you. However, taking time to address the needs of your estate now will make sure the assets and the property you earned during your life is left to the people and organizations most important to you.
One way to set up your estate is through the creation of a trust. When you create a trust, you are known as the grantor or settlor. The trust is a legal arrangement for your assets to be passed along to specified beneficiaries. The passage of these assets is through a trustee which carries out your wishes regarding conditions regarding the transfer of your assets.
When creating a trust, you will need to select a trustee who will provide the attention needed to the administration of your wishes after you pass away or are otherwise incapacitated. Deciding who will act as your trustee can be a difficult decision. It will be his or her responsibility to be fair in the administration of your assets and to understand any changes to laws which may impact your estate.
The Michigan Trust Code outlines the responsibilities and legal requirements of a trustee. Our team includes expert estate planning attorneys who can help you decide who is the best option to serve as your trustee.
Trusts are complicated legal documents that require the expert advice of an estate planning attorney with the knowledge of current Michigan laws. Too many people try to take advantage of families and do not go through all the necessary steps to set up a trust properly. Planning for your estate should be customized for your family and your estate, at Grewal Law we will create the right trust to fit your needs.
Different Types of Trust
When deciding to set up a trust, there are an array of options for you select from when planning your estate. Each trust offers different benefits designed to help you control how your estate is settled after you are gone.
- Revocable Living Trust – the benefit of this type of trust is it can be amended throughout your life. It gives you the flexibility to make changes as you see fit as things change over time and gives you the ability to use your assets during your lifetime.
One type of living trust is an AB Trust. These are creating to allow married couples to pass property and assets to their beneficiaries after their death through the trust. Over the last few years Michigan has made changes to the laws regarding the transfer of property ownership and other assets, so contact your estate planning team at Grewal Law to better understand these changes and how they may impact a trust.
- Testamentary Trust – it is created as part of writing your will and does not go into effect until you pass away. Because a testamentary trust does not go into effect until you pass away, it may have some unintended consequences if you are incapacitated or otherwise permanently disabled. As your legal counsel, we can help you weigh the pros and cons to this type of a trust.
- Irrevocable Trust including Gift Trusts and Life Insurance Trusts – these trusts cannot be amended once created; these are permanent agreements. The creation of an irrevocable trust is meant to keep life insurance or other property out of the rest of your estate. There are sometimes tax benefits to creating an irrevocable trust and as your trust legal counsel, we can help you determine the best option for you. After changes to Michigan law in 2010, all trusts default to revocable unless otherwise specified. If you decide to create an irrevocable trust, we will ensure the documentation meets the legal requirements for this type of agreement.
- Charitable Trust–designed to pass designated property or assets to a charitable organization after your death. These trusts must be registered with the Michigan Department of the Attorney General and as your legal team, we will handle all the required documentation for your charitable trust.
The creation of one of these trusts will ensure your wishes are met and will help save your family or other beneficiaries time and money.
Creating a trust may be the best option for you, so contact us at 800-331-9871 or 517-393-3000 to learn more today.
Benefits to Having a Trust
Trusts offer several benefits including avoiding probate, saving money and protecting assets. One of the main benefits for your beneficiaries is that trusts do not have to go through the probate process. Estate administration required to go through probate court can be a long process adding additional burdens on your loved ones after you are gone.
Avoiding probate also helps save money related to the administrative costs and attorney fees. Probate court is public which means your entire estate is open to the general public and many families prefer to have business kept privately.
Besides avoiding probate, trusts help provide tax savings. If you have a large amount of assets, the amount of estate taxes paid at your death could be significant. The trust allows the assets to be easily transferred to another trust avoiding these potential taxes. The creation of a trust does not guarantee all taxes will be avoided, but it can provide significant savings.
Finally, the trust allows for your assets to be protected. You can outline conditions on the distribution of your assets. For instance, you may require certain conditions to be met before someone receives his or her portion of the estate.
In addition, there are certain regulations regarding Medicaid eligibility where your assets may be at risk of being taken to cover medical expenses. There is a five-year lookback period for Medicaid in Michigan, so it is vital to create trust early to protect your property from being taken to cover medical expenses.
We Can Help You Set up a Trust
Our expert estate planning team is ready to help you decide if the creation of a trust is the best choice for you. We can also help you decide on the type of trust you want to have made in order to meet your needs.
Trusts are complicated and Michigan law has changed a lot in regards to their administration. If you create a trust, we will handle all the required paperwork for a new trust or can help you update an existing trust you have already established.
Call us today for a no obligation quote at 800-331-9871 or 517-393-3000.