Many people have two simple goals in mind when they start to consider what to include when establishing an estate plan: protecting inheritance and avoiding probate. Both are laudable goals, as heirs and beneficiaries will appreciate an estate planner who is cautious and considerate with their assets and who knows that the probate process isn't always the easiest way to transfer assets. When a Michigan resident has these two goals in mind, they will often find themselves weighing the pros and cons of a living trust.
Of all of the options to consider when think about establishing trusts, many people are most familiar with the living trust. This estate planning option is one of the more commonly employed instruments. Basically, establishing a living trust involves transferring assets from the ownership of the individual into the ownership of the trust. The person establishing the trust is also appointed as trustee, allowing for a greater amount of retained control over the assets.
For some Michigan residents, the idea of transferring trusts out of their own ownership can be a big mental leap with unpleasant connotations. Individuals and families work hard for their assets, and transferring them can be unsettling. However, as mentioned in a recent article, it is important to remember that assets in a living trust are still in the trustee's control.
Trusts are a popular option for avoiding the probate process as well. Upon death the terms of the trust can authorize permanent transfer to a designated heir or beneficiary. Avoiding probate means saving funds from the estate which may otherwise be used to pay fees and costs, as well as potentially paying for the services of an executor of the estate.
Source: Los Angeles Sentinel, "Estate Planning 101: Breathing Life Into the 'Living Trust'," Marlene S. Cooper, Sept. 6, 2013