Trusts are not just for rich people. A number of years ago many people had trusts in Michigan because of federal and state estate taxes. Those taxes could sometimes be over 50% of the estate. The non-taxable amount was very low at that time and people needed a strategy for passing as much of their assets as possible to their heirs. Today things are different in Michigan because state estate taxes were abolished, meaning that we don’t have them anymore. The federal government also has an asset limit of over $5 million dollars per person. So the real question is, why do you want or need a trust today? The quick answer is for privacy, probate avoidance, and maintaining greater control over you assets. There are many types of trusts including revocable grantor trusts, irrevocable trusts, Qualified Terminable Interest Property QTIP trust, Irrevocable Life Insurance Trust ILIT, among others. Today we’ll focus on revocable grantor living trusts.
One of the biggest advantages to having a revocable grantor living trust in Michigan is the ability to keep your wishes private. Since a trust doesn’t need to be probated through the court, the trust remains private in most instances. This can be a big benefit if privacy is important to you and you don’t want others to know what you have.
Probate is the legal process where the court decides whether a will is valid. If there is no will, then this process is can be expensive and time consuming. Sometimes it can last years. Even with a will in Michigan, this process can take a very long time depending on the contents of the will and whether you accounted for all of your assets. If they are not, then the court will follow the law through EPIC also known as the Estates and Protected Individuals Code. Here is the link for EPIC: Click Here. If you pressed the link you can see how complicated it can get. Having a trust avoids probate so that your trustees can distribute the assets to your beneficiaries without court involvement in most cases.
Maintaining Greater Control Over Your Assets
Having control over ones assets is one of the biggest advantages of having a living trust in Michigan. In a revocable grantor living trust, you can name yourself as a trustee and use your things the way you normally would. You can also include specific directions for where and how you want your assets distributed. For instance, you can make distributions to children as they reach milestones like graduating college or getting married. The options you have to control and use your assets are are close to limitless as long as they are not against public policy.
If you are looking for an Estate Planning Attorney in Ann Arbor, Saline, Dexter, Chelsea, Ypsilanti, Manchester, Milan, Brighton, Howell, or anywhere in Washtenaw and Livingston Counties, please don’t hesitate to contact me for a free consultation. I draft wills, trusts, powers of attorney, among other estate planning documents all the time. We can discuss your estate planning needs so you can better understand what you need to have your estate in order.