At Thav Ryke & Associates, we are often asked for our expert opinion on the importance of setting up a trust. In Estate Planning, a trust is a very important part of the planning process in most cases. As we have stated many times in this Michigan Probate Law Blog, a will is an important estate planning tool. Oftentimes, however, in addition to having a professionally written will, it is also imperative to have a trust set up as well to ensure certain protections.
Trusts are set up to include particular protections for you and your loved ones (your survivors). A will defines the people who will receive assets from your estate, while a trust gives you the authority to decide how and when those assets are given to your survivors (or others you deem worthy of receiving some of your assets).
The Trust can be essential if any of your beneficiaries are minors or you want adult beneficiaries to obtain your assets or money over a longer period of time rather than all at once (which can be complicated if you are not confident your beneficiaries can manage money).
Trusts also can be helpful tools that allow you to manage your assets in your lifetime, while you remain the trustee of your trust. As the trustee, you can manage property, assets, money, or anything else you have listed in your trust. During this time, any trust created and funded during your life is a “living” or “revocable” trust. If you ever become incapacitated — and your trust includes an incapacity clause, which defines who manages your affairs in this instance — the trust will ensure your needs are met. Your estate and finances will be managed for your benefit.
When you die, your trust becomes “irrevocable” meaning that your assets are managed and distributed by your designated trustee. They are legally required to follow the instructions laid out in the trust. Trusts give you more comfort and peace of mind because you and your loved ones will rest assured that there is a plan outlined for the management of family assets. Trusts also protect family members who are minors (your children or grandchildren or great-grandchildren), who may not have the resources to deal with financial matters after you are gone.
For questions about setting up a trust as part of your estate plan, please contact one of the expert Michigan probate law attorneys at Thav Ryke & Associates in Southfield, Michigan.