A Living Trust Can Help You Avoid Probate in Michigan, But a Will Doesn't. A living trust is a private document that does not require any judicial intervention. Most living trust transfers are made in the privacy of your lawyer's office shortly after a death. Trusts are frequently used in estate planning.
Living trusts created during the life of the grantor facilitate the transfer of assets to heirs without the cost and publicity of the estate. Trust transfers are usually faster and more efficient than will transfers. These fiduciary transfers allow grantors to maintain privacy with respect to the nature and value of their assets. They can be used to maintain the confidentiality of different values of assets transferred to different heirs.
Ensuring the privacy of family businesses and real estate held through entities not publicly identified with their owners are additional reasons for using trusts. The surest way to avoid probate is to have a trust. A living revocable trust does not need court approval. Everything is kept private, and your successor trustee can take over your management immediately after your death.
Just like a will, a living trust is a document you can use to name the beneficiaries of your property. However, beyond that, the two documents are different. The main feature of a living trust is that it appoints a trustee to manage and distribute the trust property after your death, and this replaces the executor who works with the probate court. Regardless of your net worth and, in particular, if any of your assets are titled in your exclusive name, you should consider a revocable living trust if you provide for the need to plan for possible mental disability.
One of the requirements of a valid will is that the person who created it be in their right mind. A trust has measures to protect against the possibility of invalidation due to mental incapacity. However, not all revocable living trusts are created the same way. However, there are many ways you can simplify, or even completely eliminate, the probate process.
One of the most effective ways to make things easier for the people you leave behind is to create a trust as part of your estate planning. Anything you put inside your Trust can be passed on while you avoid legalization. And, a big benefit of having a trust is that the distribution of assets remains private, while the distribution of assets through a will and a probate is public knowledge. A trust allows you a certain level of control over your estate that wills cannot provide.
The structure of trusts allows you to decide how and when your assets will be distributed. If you have young children, this can be a great way to make sure they don't receive their inheritances in a single lump sum. Trusts can be created with certain life milestones in mind, allowing children to receive funding after graduating from high school or college or even after marriage. With trusts, the grantor has greater control and can define specific rules or conditions on how assets will be distributed.
For example, if parents want their children to inherit income only at certain times or to care for a child with special needs, these wishes can be achieved through a trust. Of course, if you need a revocable living trust, be sure to fund your assets in your trust and update your beneficiary designations; otherwise, your trust will not be worth much less than the money you spent on it. When you become a member of & Will Trust, the documents included in a living will listed above are provided, regardless of whether you choose to purchase a trust or a will. Charitable trusts and “special needs” trusts are two types of trusts generally established during the life of their grantors. Trusts generally have a more complex legal structure compared to wills, and with the various types of trusts available, it can be difficult to know which (if any) are right for you.
Because all assets that pass through a living trust do not have to go through probate, they can be distributed to beneficiaries after the grantor's death without any fees or interference (or guidance) from the court. For this reason, many people chose to create a living trust. That said, the bill can add up quickly if you and your lawyer need to spend a lot of time discussing your goals before the trust agreement is drafted. Although it is often more difficult to claim against a living trust compared to a will, only an irrevocable trust can protect assets from creditor claims. Since living trusts are effective once signed and funded, and can be updated over the life of the grantor while wills take effect only upon death and are formed at a single point in time, living trusts are often prioritized due to their ongoing nature. In a living trust, you can name your spouse, partner, child or other trusted person to have authority over the trust assets if you become incapacitated and unable to manage your own affairs.
A living trust establishes a separate legal entity and trust assets evade succession so technically those assets are no longer part of the grantor's estate. A charitable remnant trust is an irrevocable trust that provides current income to the grantor or other designated non-charitable beneficiaries and partial tax deduction based on valuation of assets contributed. The trust document may provide for successor trustee for example in event of death or disability of grantor or trustee and include instructions for subsequent administration and transfer of trust assets. Special needs trusts are legal agreements that allow such individuals receive financial support from trust for private purposes without jeopardizing their eligibility for federal and state public assistance programs such as Supplemental Security Income (SSI) and other benefits. Sitting down with an estate planning lawyer can be very expensive especially if you don't know what you want or need.