Reasons to Set up a Trust

When thinking about how to develop an estate plan you have probably considered devising a will which directs where your assets will go and states your final wishes concerning your estate and arrangements.  Another estate planning device which could be of significant benefit to you is a trust.  There are several different kinds of trusts which, depending on your circumstances, may be of value to you and your beneficiaries. 

What is a Trust?

A trust is a legal device which allows the trust grantor (or creator) to direct and instruct how assets will be given to named beneficiaries.  Not all trusts are the same as the parameters and purpose of different trusts can range significantly.  Once assets are placed in the trust, they and any distributions will be managed by a designated trustee.

Trust Benefits

  • Control

Creating a trust means that you can include specific terms and initially have control over how assets are distributed.   Generally, if you have a revocable trust, you can change its terms and remove and add assets as needed.  You can also control over how they are distributed and used by beneficiaries.

  • Privacy

When you bequeath property through a will, the document will be administered through the probate process.  Probate is a public, legal action which does not offer your estate or beneficiaries privacy.  A trust, on the other hand, is a confidential legal device which allows wealth to be transferred confidentially.

  • No Probate

Probate can be a time-consuming process which can be expensive and emotionally draining.   Passing resources through a trust allows beneficiaries to have timely access to the trust assets without the burden or costs of probate.

  • Tax Savings

Through careful and thoughtful estate planning, the use of a trust may be a means to minimize estate taxation for larger estates.  There are ways to skip and transfer tax benefits into trusts which can help reduce the estate’s tax burden.

  • Asset Protection.

One concern a trust creator may have is that beneficiaries could have legal problems or other issues which could place trust assets at risk (for example, creditors or a nursing home).  The trustcan be drafted in a manner which protects your assets through its structure aswell as certain restrictions on distributions. 

There are numerous different types of trusts which may be beneficial to you.  In order to determine which kind of trust may be right for you, it is important to consult with an experienced estate planning attorney who can help you accurately assess your options. We have experience helping clients plan for their estates through trusts and other legal devices and can provide the guidance you need to prepare for the future.  Please contact us if we may be of assistance.  https://www.michiganestateplans.com

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