Knowledgeable Michigan Revocable Living Trusts Lawyer
You’ve worked hard for your possessions, and you likely have strong opinions about what happens to them during your lifetime and afterwards. You don’t want to leave your belongings to people who didn’t care for you, or worse, to the state to distribute. A trust can give you a way to manage your assets and protect them when you’re gone. To learn more, speak to a Rochester Hills, Michigan revocable living trusts lawyer at Sumner & Associates, P.C. today.
What Is a Revocable Living Trust?
A trust is a separate entity on to itself. You and your spouse are the people who set up the trust called “Settlors” or “Grantor” and you are both the original managers of the trust known as the “Trustees” and the Primary Beneficiaries of the trust. You will name a Successor Trustee” to continue on managing the trust after you are gone. With a living trust you can eliminate the need to use Probate Court in administering your assets if you become disabled, incompetent, or die. A trust may also help reduce the risk of inexperienced and unskilled management of property by allowing you to select today an asset manager for the future.
A trust is a written expression of your desires as to the management of assets during your lifetime if you become incapacitated and to whom the assets pass upon your death. Put another way, it is an arrangement under which one person gives some part or all of their assets to another as Trustee. Those who are to receive benefits from the trust are known as beneficiaries. The arrangement establishes:
- Who the beneficiaries will be, what each will receive, and when they will receive it;
- How much investment authority will be given to the Trustee to meet the needs of the beneficiaries; and
- What the duration of the trust will be within the limits allowed by law.
What Can Be Transferred in a Trust?
A trust can allow you to transfer ownership from yourself or someone else automatically upon death. This skips probate and can save significant time and money. A revocable living trust can be formed to manage the following types of assets:
- Real property that you want to keep in the family
- Money for a child who can’t yet manage their own affairs
- College expenses for a grandchild
- Financial support for a pet
A revocable living trust lawyer can help you understand which of your assets can be taken care of through a trust.
Tax Planning With a Revocable Living Trust
In 2000, federal estate taxes were applied to anything over $600,000. In fact, heirs were to pay as much as 55 percent of the value of any assets over $600,000. Through 2001, as many as 50,000 estates were paying this much each year. However, by 2018 the federal estate tax exemption has been pushed to $11.18 million, and that amount of portable between spouses. That means that a married couple would have to have more than $20 million in assets before federal estate taxes were assessed. Now, only an estimated 1,800 estates pay federal estate taxes yearly.
However, your beneficiaries may have to consider their taxes when evaluating the amount of assets that you pass on to them. A trust can give them a venue to hold excess assets that they cannot yet take on for tax reasons or other reasons that they may not want to have excessive assets in their accounts.
Avoiding Probate Court With a Revocable Living Trust
Probate court can require a significant amount of time, money, and paperwork. Many people try to avoid it by working with a lawyer to form a trust prior to their deaths. However, there are other ways of getting assets to pass outside of the probate court. The following types of assets do not have to go through probate court in Michigan:
- Those owned jointly with someone else (bank accounts, real estate, etc.)
- Those with a named beneficiary (IRAs, life insurance policies, 401(k)s, etc.)
- Vehicles valued under $60,000 that go to a spouse or child
- Boats valued under $100,000 that go to a spouse or child
- Less than $24,000 in cash or personal property
- Businesses with a transfer on death designation
- Real estate with a “remainder beneficiary” named on the deed
Most property will fall into these categories, or it can be handled through a trust. An attorney can help you prepare new deeds, develop a trust, and determine what should happen to your assets.
Administering Your Estate Through Trusts
Estate administration occurs after you die and determines where your belongings go and to whom. When the court gets involved, they may require oversight and timelines that delay the process. It’s best to avoid probate court as much as possible.
Setting up trusts is like administering your estate before you die. You can set up trusts that specify which property goes to which beneficiaries. You can even set up a trust that will endure after your death. For example, if you have a beloved pet and you wish to continue providing for their care after you pass away, then you can set up a trust for their caregivers. The caregivers could then access the trust for anything they need for your pet.
Trusts include a specific set of instructions for trustees and beneficiaries. Everyone involved must follow your wishes. This can be different than what happens in probate court if someone challenges your will or the state’s administration of your estate. With a trust, your wishes are clearly established while you are alive. After your death, the court cannot as you for clarification. Thus, there can be some confusion with probate court. You get to administer your estate through a trust.
A Michigan Revocable Living Trust Lawyer Can Help You
You should meet with a Richland Hills MI estate planning attorney to discuss your estate plan and the advantages of a living trust. The attorney who will prepare the living trust documents that will give force to your estate plan is essential to the planning process. Your life insurance agent, financial planner, trust officer and accountant can also be helpful. Together, this team of experts can help you create the best plan for your family.
It is just as important to select the proper Trustee as it is to select the proper estate planning attorney. While a well planned living trust document can be just a few pages long, well chosen words and instructions can insure that your intentions and planning objectives are met. Sumner & Associates, P.C. has been practicing estate planning for over fourteen years and has received the highest rating for attorneys from Martindale-Hubbell. We can evaluate your situation and help you decide how to protect your interests. Call us today.