For some Michigan residents, setting up a trust may be one of their New Year's goals. One of the decisions that has to be made is whether the trust will be revocable or irrevocable, and this depends on the reasons for setting up the trust in the first place.
Life changes often create the need for estate planning changes, but when modifying a trust in Michigan, it is important to do it right. According to the American Bar Association, a trust amendment is a document that attaches to the existing trust, rather than a rewriting of the trust. In fact, if a person takes out a page, changes it, and puts it back in, this could lead to challenges and disputes later.
Ensuring that your family members are able to benefit from the assets you leave behind is one of the primary goals of estate planning in Michigan. We at the Bingham Legal Group PC often recommend spendthrift trusts to people who have concerns about their beneficiaries' ability to handle wealth responsibly.
Parents in Michigan who are concerned about their adult child with disabilities may be looking for a solution to ensure his or her quality of life is maintained after their death. According to FindLaw, special needs trusts are often the estate planning tool that fulfills this goal. There is more than one type of special needs trust, though, and for some families, a pooled-account trust may be the best option.
The responsibility of trust administration in Michigan involves quite a few financial duties, and if someone has asked you to be a trustee, you should consider it carefully before agreeing. The American Bar Association explains that your role depends heavily on instructions in the trust, so you should discuss the specifics of issues such as investments and distributions with the trustor to learn what the appointment will entail.
When you are setting up a trust, one of the components is designating a trustee. The trustee has significant responsibility, so it is important to find just the right person. Or should you choose an institution instead? According to the American Bar Association, both trustee options have benefits, but they each also come with downsides.
A pet parent in Michigan may not have the same concerns as the parent of a minor child. However, a cherished cat or dog companion is in a vulnerable position after an owner's death, and will need someone to take over its care. According to UPI, one woman ensured her cats would never want for anything by choosing guardians and setting up a trust to provide for their needs. She designated $300,000 from her estate to fund this pet trust, which stipulated that the money be spent on grooming needs, health care and food, as well as any other expenses that arose.
Someone who is making estate plans in Michigan may believe that a trust is his or her best option to avoid costly estate taxes. This is not necessarily the case, but there are a number of important and valid reasons why a trust may still be the most effective way to ensure that his or her estate is managed the way it should be.
In planning long-term financial goals, including estate planning and end-of-life issues, people may be interested in all the benefits of trusts. According to MichiganLegalAid.org, a person, known as a grantor, who chooses to create a trust designates another person or entity, the trustee, to hold the title of an asset. The type of trust will affect who can be the trustee, and also who may receive the benefits of the trust. It also determines control.
When planning for the future, a person in Detroit should consider how his or her beneficiaries may handle their inheritance. For many people, the goal is not merely to distribute assets, but to allocate them as provision for their children’s future. Not everyone understands how to be responsible with money, though, particularly when there is a lot of it. NerdWallet explains that in these cases, a parent can choose someone else to manage the child’s inheritance for him or her through a spendthrift trust.