When planning for your estate, there are different ways you can plan to pass assets to your chosen beneficiaries. One choice is to create a living trust which allows you, the creator, the flexibility to make changes and benefit from trust assets during your lifetime, and avoid probate after you are gone. Here are some considerations regarding a living trust:
What is a Living Trust?
A living trust (also called a revocable trust) is a trust which is established during the creator’s or “grantor’s” lifetime which, unlike an irrevocable trust, can be changed or revoked by the grantor. When the trust is initially created the grantor can serve as the trustee. The grantor can also receive use assets from the trust as a beneficiary. While this device can keep property out of probate and allows the grantor freedom to change its terms and move assets, a living trust does not protect assets to the same extent as an irrevocable trust.
Advantages of a Living Trust
One of the primary benefits of a living trust is that when the grantor passes away, whatever assets are in the trust will pass to its beneficiaries without having to go through the time and expenses of probate. This trust will also allow a grantor who becomes incapacitated to remain a trust beneficiary. The living trust, like most other trusts, permits the grantor to have control over how trust assets are distributed and can be created in a manner which protects the assets from some beneficiary creditors. Additionally, unlike a will which must go through public probate, a trust is a private document which allows the creator to keep the terms confidential and stay out of the probate court system.
While a living trust can be an excellent estate planning tool, there are also other measures you can take to protect your assets and provide for your beneficiaries. For instance, if your primary concern is shielding your estate from taxation or creditors (including the nursing home if you ever need long-term care), an irrevocable trust may be a useful alternative. To adequately plan for your estate it is vital that you meet with an experienced estate planning attorney who can help you understand the different aspects of your estate and your protective options.
Our office has experienced attorneys who can help you examine your assets and assist you in understanding your estate planning options. Please contact us online or by phone if we may be of assistance. https://www.michiganestateplans.com/contact/