If you want your assets to avoid probate after you pass away, consider creating a trust to bypass probate and immediately disburse to your beneficiaries through your trustee. However, you have many types of trust to consider in Michigan. If you also want asset protection while still living, you must create an irrevocable trust.
At Bassett Murray Law Group, PLLC, we have over 25 years of experience helping our clients in and around Ann Arbor, MI, with estate planning and trust creation. Call us today to schedule a consultation for estate planning and trust agreements.
Why Is Creating a Living Trust Important in Michigan Estate Planning?
While you can create a trust in your will (called a testamentary trust), it will not help you avoid probate. It is often better to create, fund, and manage a trust during your lifetime. Any trust you create during your lifetime is called a living trust, which can be either revocable or irrevocable.
A revocable trust is a trust in which you name yourself as both the grantor and trustee so you can continue to manage the trust, move assets into the trust, and still own and use the trust assets. Because you still own the assets in a revocable trust, it is not an asset protection trust during your lifetime. A revocable trust will become irrevocable upon you becoming incapacitated or passing.
An irrevocable trust is a trust you cannot change, amend, alter, or cancel after you create the trust and move assets into the trust. You will need to change the titles on any trust assets, such as real estate, financial accounts, life insurance and other assets, to put them in the name of the trust. Because you no longer own the trust assets, an irrevocable trust offers asset protection.
When to Use a Revocable vs. Irrevocable Trust
Asset protection with an irrevocable trust is sometimes advisable for large estates or individuals at high risk of lawsuits (doctors, engineers, surgeons, architects, etc.).
You may need to choose an irrevocable trust for several reasons, including:
- Reducing the impact of estate taxes if you have high-value assets.
- Providing an inheritance to children from a previous relationship.
- Protecting your assets from creditors or lawsuits.
- Allowing a family member to continue to qualify for government benefits.
- Protecting your business from the death or incapacity of the owner or a business partner
What Type of Trust Do You Need?
There are several types of irrevocable trusts available to suit your potential needs. The type of trust you create depends on what you intend to do with the assets in the trust after your passing. Some irrevocable trusts you should consider include:
- Charitable remainder trust
- Generation-skipping trust
- Irrevocable life insurance trust (IRIT)
- Special needs trust
- IRA trust
A knowledgeable trust attorney at our office can help you determine the type of trust that best suits your needs for your individual goals in creating an irrevocable trust.
Contact Our Experienced Trust Attorneys in Ann Arbor, MI
At Bassett Murray Law Group, PLLC, we help our clients prepare for all life’s changes in Ann Arbor, MI, and the surrounding areas. Call us today at 734-930-9200 or contact us online to schedule a consultation with an irrevocable trust attorney.