Trusts Attorney in Farmington Hills, Michigan
Nobody likes thinking of their own death or what will happen to their family after they pass away. However, the sooner you start planning, the better prepared everyone will be for the future. The best way to get started is to contact an estate planning attorney to learn about your options for passing assets to your family and loved ones. Most people believe a will is all they need, but you may want to hear about the benefits of a trust. If you’d like help setting up a trust or learning about the different types of trusts, reach out to Steven L. Rotenberg, PLLC in Bingham Farms, Michigan, to discuss your options.
Overview of Trusts
A trust is a legal contract between a trustor (the person who forms the trust) and a trustee (the person who manages the trust) where the trustee holds the title to specified assets or property. The trustor places certain assets into the trust, transferring ownership out of their name and into the trust. The trustee is responsible for managing these assets and distributing them after the trustor has passed. Because the assets are not in the name of the deceased, the transfer process is much faster and easier than it would be with a will.
There are two main types of trusts: a revocable trust and an irrevocable trust. As the name implies, a revocable trust (also called a revocable living trust) can be revoked at any time by the trustor. With these, assets can be added or removed, and the trustor can rename beneficiaries any time they like. With an irrevocable trust, what is set forth cannot be changed. This may be preferable to someone who’s looking to minimize their estate taxes or safeguard certain assets from creditors.
With any type of trust, you’ll want to work with an experienced attorney when setting it up. When you first meet with your lawyer, you’ll lay out your goals and financial details so you can develop a plan that meets your specific needs. You’ll then decide what assets you’ll want to include in the trust, assign beneficiaries, and decide who your trustee will be.
Why Having a Trust Is Important
Many people want to know, “How is a trust different than a will?” and “Why is a trust preferable to a will?” Trusts can be incredibly useful for estate planning for many reasons. First, they allow you to bypass probate. Probate is the legal process that assets go through where a judge “proves” your will and assists with its administration. This process can take several months to complete and can be costly. Additionally, the contents of your will become available on public record. However, unlike wills, trusts stay private and don’t go through probate, and your assets can instead be transferred directly to your beneficiaries.
Trusts also allow for more flexibility since you can move assets around and stipulate that certain assets be kept in a trust until a future date. For example, if you have minor children, you can have assets remain in the trust until their 18th birthday. Lastly, you can use a trust to protect you and your assets in cases of mental incapacitation.
Choosing a Trustee and Beneficiaries
Perhaps the biggest decision you’ll make is who your trustee and beneficiaries will be. Your trustee is responsible for executing your plan after you pass, so this should be someone you trust to honor your wishes. This can be someone you know, or you can appoint a professional trustee. Although your assets will be in their name, you’ll still remain in control of them during your lifetime and you can remove and reappoint a trustee at any time.
You’ll also need to consider who you’ll name as beneficiaries. These are often family members or friends, but you may also leave assets to a non-profit organization or charity you support. When assigning beneficiaries, you want to think about who will need financial support after you die and the needs of your spouse or children. You can also revise your beneficiaries if you have more children or remarry.
Serving Bingham Farms, Michigan
If you’re in the Bingham Farms, Michigan, area or anywhere in Monroe, Pontiac, Mount Clemens, or the metro Detroit area, call Steven L. Rotenberg, PLLC today to schedule a consultation to start setting up a trust.