You may already be familiar with some of the estate planning options available to you in Michigan, such as wills and trusts. Many people rely on the team at the Bingham Legal Group to explain the differences in the roles, and which option may be better in a given situation. However, there is a type of trust that is actually included in the will.
FindLaw explains that, rather than being set up while you are still alive as a revocable or irrevocable trust would be, a testamentary trust comes into being after your death. The instructions are included as a provision of your will. Your assets go through the probate process, which involves the executor you named inventorying your estate and paying off debts, taxes and fees. Then, with the assets that are left, a trust is set up for your beneficiaries.
The testamentary trust can be particularly useful if you have minor children who would not benefit from receiving their inheritance immediately upon your death. Rather than allowing the children’s guardian to manage the funds as he or she sees fit, you have your executor create the trust. That puts the financial duty in the hands of the trustee you specify, along with instructions on how to carry out your wishes.
You may want the same person to fulfill all three roles if you have a trusted friend or relative who is willing and able to handle the responsibilities. However, you have discretion to do what you want in your last will and testament. There is more information about end-of-life planning on our webpage.