+(231) 714-4501
Grand Traverse Trusts Lawyer
Creating a will is a simple method to outline your wishes regarding the distribution of property upon your death, but it does not suit every circumstance or asset type. If you aim to spare your family the probate ordeal, safeguard assets, exert greater influence over specific properties, or manage assets for a beneficiary who cannot manage assets on their own, establishing a trust alongside of a will could be prudent. Nevertheless, it’s important to remember that a trust operates akin to a vessel—it must be funded to serve any purpose!
Types of trusts available under Michigan law.
There are two major types of trust under Michigan law: testamentary and “living.” A trust created at the death of the “grantor” or “settlor” (person who created the trust) by the will is referred to as a “testamentary” trust. Testamentary trusts are less common, but are useful in some cases for Medicaid planning because, when drafted correctly, assets in such trusts are not used in determining the beneficiary’s eligibility for Medicaid. “Living” trusts are created during the life of the individual creating the trust. “Living” trusts typically are funded partially during a settlor’s lifetime, and also receive assets after the settlor passes away (beneficiary designations on accounts and/or via a ladybird deed for real property). “Living” trusts typically allows a person’s estate to entirely avoid the probate process,.
Revocable and irrevocable trusts.
Trusts come in two primary forms: revocable and irrevocable. Each type of trust presents distinct advantages and drawbacks.
Revocable trusts offer flexibility, allowing the grantor to modify them at will, including altering terms, appointing new trustees, and changing beneficiaries.
On the other hand, irrevocable trusts cannot be altered or revoked by the grantor. However, they may still be subject to changes, depending on the language of the trust and whether there is a “trust protector.” Irrevocable trusts are sometimes used for Medicaid planning, taxable estate planning, and to provide asset protection.
Trusts
A trust can:
- Manage assets in the event of your incapacitation
- Protect assets in a second marriages
- Shield your assets from creditors and predators
- Avoid the headache of probate
- Tax planning
- Manage a child or other beneficiary's inheritance by the rules that you set
- Provide for minors
- Provide for beneficiary's with special needs without cutting off government benefits
- Prevent disinheritance in blended families
- Provide for a spouse while ensuring continued eligibility for Medicaid