Living Trust Michigan

Feb 24, 2021 | Estate Planning

living trust vs will

What is a living trust? A living trust is a legal document created by an individual, known as a grantor, who provides a trustee with the responsibility of managing their assets for a future beneficiary. At its simplest, a living trust is an estate planning tool designed to bypass the costly probate process. Since the will is active while the grantor is alive, it does not need to go through the courts when the grantor passes away. Living wills must meet certain requirements in each state, but are valid in all states as long as those requirements were met for the state they were created in. Since these trusts vary by state, it’s important to understand how they effect estate planning in Michigan.

Living Trust vs Will in Michigan

Wills differ from living trusts in that they specify how a person’s property is to be distributed after their death, whereas a living trust is created while a person is still alive. The grantor of a living trust can also name themselves as trustee and designate a successor trustee to manage their property after they pass. Wills are necessary when living trusts don’t contain all of the grantor’s property, or if the grantor has children. Most states don’t allow a person to appoint a guardian within a living trust. For these reasons, those who have living trusts may also draft a last will and testament.

Living trusts are harder to set up than wills and tend to me more expensive as well. This is where a Muskegon estate planning lawyer will be especially useful. An attorney can help set up a trust, understand how to legally transfer assets, and even provide guidance in regards to what type of property to place in your trust. An attorney can also assist with drafting a will if you deem having one necessary.

The Types of Living Trusts

There are two types of living trusts, revocable and irrevocable. Revocable trusts have the most flexibility and allow property in the trust to be removed or changed when the grantor chooses. Irrevocable trusts make it so that property cannot be removed without explicit permission from everyone named in the trust. The grantor releases ownership of the property in an irrevocable trust. This type of trust is also called a domestic asset protection trust. This form of trust is newer, and in Michigan, allows residents to protect their assets from creditors after property has been in the trust for at least two years.

Why Choose a Living Trust in Michigan?

As stated earlier, the main advantage of a living trust is avoiding the probate process. Living trusts also allow the grantor to hold property for a child until they come of age, or possibly avoid conservatorship. Revocable living trusts allow grantors to interchange property, while irrevocable can safeguard assets after a set amount of time.

What is the Cost of a Living Trust in Michigan?

The cost of a living trust depends on the route a person takes to create it. Do-it-your-self trusts using online forms can range from $100-$300, whereas the cost with an attorney depends on their rates. The benefit to using an attorney is the specialized knowledge of living trusts and experience with providing the best advice as to what property to store, options for naming trustees, and so on. Lucky for Michigan residents, the state does not have an inheritance tax, unless the decease party died on or before September 30, 1993. However, there is a federal estate tax, but only applies to estates worth more than $11.18 million.

So, living trusts may make distributing assets easier after death, but all things have their advantages and disadvantages. Whether you opt for creating a living trust, drafting a last will and testament, or both differs on as-needed basis. If you’d like to consult with a professional about your estate planning options, contact a local Muskegon Lawyer at Bowen Law Offices.

 

*Please note, that this article is meant for informational purposes only and is not intended as legal advice.

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BOWEN LAW OFFICES
(231) 726-4484
1042 Terrace Street
Muskegon, MI 49442, MI 49442

DISCLAIMER:

The information provided on this website does not, and is not intended to, constitute legal advice. All information, content, and materials available on this site are for general informational purposes only.

Only your individual attorney can provide assurances that the information contained herein – and your interpretation of it – is applicable or appropriate to your particular situation.

If you have legal questions, please contact us at: (231) 726-4484

Disclaimer:

The information provided on this website does not, and is not intended to, constitute legal advice. All information, content, and materials available on this site are for general informational purposes only.

Only your individual attorney can provide assurances that the information contained herein – and your interpretation of it – is applicable or appropriate to your particular situation.

If you have legal questions, please contact us at:
(231) 726-4484