Probate procedures have long been a contentious issue among those who are attempting to plan for the distribution of their property following their death — and often more contentious among the survivors of those who did not bother to properly prepare at all! In many states, including Michigan, living trusts have become increasingly popular as a tool to circumvent much of the probate process and retain value within the property of the trust’s creator.
A living trust must be established within the lifetime of the grantor, or creator, of the trust. In most cases, this entails what is called a “revocable grantor trust,” in which the grantor agrees to move his or her property into the trust and out of his or her personal ownership. The grantor generally retains the right to make changes to the terms of the trust for the remainder of one’s lifetime or until legally considered incapacitated, with the trust usually providing an income for the grantor, to be paid out of the transferred resources. By transferring all of his or her resources to the trust, the grantor is free from personal ownership of property upon death, and can thus bypass probate.
A living trust is significantly more complicated and generally more costly to establish and maintain than a traditional will. However, the long-term benefits to both the grantor and grantees often justify a greater up-front burden in time and cost.
Legally speaking, it is possible to establish a living trust on one’s own, without the aid of a qualified law professional, and some individuals choose to create a living trust this way. As with any complicated legal matter, an experienced legal counsel can guide you through the process of establishing a living trust and help avoid any mistakes that could prove costly to both the grantees and grantor.