Living Trust
Estate Planning Experts & Personal Injury Attorneys
A living trust is an estate planning document that has vast utility during a person’s lifetime and beyond. The creator of a living trust is known as the grantor or settlor. Upon creation of the trust, the grantor will be instructed on how to transfer bank accounts, brokerage accounts, real estate, and other property to the trust. The grantor can name himself or herself as trustee and remain in control of the property held within the trust during his or her lifetime. The grantor will also name others to act as a successor trustee and/or co-trustee. A successor trustee or co-trustee may be permitted to act on behalf of the trust for any reason or upon the disability or death of the grantor.
Understandably, the act of transferring assets to a trust and creating a new taxable entity can seem drastic and untraditional to our clients that have held title to accounts and real estate a certain way for many decades.
Does Everyone Need a Living Trust?
A trust cannot do everything and not everyone needs a trust as part of an estate plan. Far too many people set up a living trust who do not need one and far too many people do not set up a living trust that should!
The decision to prepare a trust should be discussed with professionals that include your Macomb Estate Planning attorney, financial planner, and C.P.A. There are many aspects of trust that make it resilient during a person’s lifetime and after death. Here are some of the benefits of a living trust as part of an overall estate plan:
- Property that passes through a trust avoids probate. Property that is not held in trust may need to be probated to determine how it is to be transferred.
- The creator of the trust can appoint himself or herself as trustee and name successor trustees.
- Property can be held in trust for the protection of children until said child attains a specific age, or the trust may require incremental distributions over a longer period; for example, ages 22, 25, and 35.
- Provide succession and continuation of a family business.
- Keep a family farm in existence for survivors to share.
- Keep other real estates, such as a family cottage, in the family.
- Provide for a child or family member with special needs.
- Avoid estate taxes (most people do not have to worry about this).
Appointment of Fiduciaries: Trustee, Personal Representative, & Agent
When you prepare your estate plan, you will need to consider naming other person(s) or an organization to take on fiduciary positions and assume the responsibilities of managing your estate. A fiduciary is a person or organization that acts on behalf of another with a duty to act in good faith to act ethically and in the other’s best interest. When naming a fiduciary, you are not limited to naming your spouse and family members. In addition, when drafting your estate planning documents, such as your living trust, you will want to name back up co-fiduciaries and successor fiduciaries that can act on behalf of your estate when a fiduciary can no longer fulfill his or her duties.
Beware of Living Trust Free Lunch Seminars
Beware of high-pressure lawyers and free lunch seminars that promote a complex estate plan that you do not understand and do not need. The Michigan Attorney General has provided a consumer alert, Living Trusts - Beware of "One Size Fits All" Estate Plans & "Free Lunch Seminars":
What if an agent abuses the powers in a POA?
“Misinformation about the cost and complexity of probate provides a golden opportunity for sales pitches exploiting fears that life savings may be lost to taxes, predatory probate attorneys, or distributed years after death because of court delays. With laws curbing telemarketing sales calls, the use of free lunch seminars to pitch estate planning products has surged. Promoted as "educational" programs, these seminars are commonly a sales job in disguise. Be alert to seminars pushing "one size fits all" estate planning products, including living trusts. A decision as important as estate planning should be made with reliable, professional counsel who can help you decide what estate plan is best for your own individual situation, rather than someone whose primary interest is making a sale.”
Plan, Prosper & Live Well
There is no better time than the present to prepare your estate plan. Contact Macomb Estate Planning if you are considering a comprehensive estate plan, living trust, will, power of attorney, or designated patient advocate. A living trust can be a major component of an estate plan that can be used to appoint fiduciaries and control the flow of assets to beneficiaries according to the wishes of the grantor. The trust estate does not have to be probated in the court system when the grantor or settlor becomes incapacitated or dies.
Macomb Estate Planning
(586) 500-5000
MacombEstatePlanning@gmail.com
