When people are planning their estates, they have a variety of options to choose from. Depending on their specific situations, Michigan residents may turn to a trust in order to help ensure that their assets are put to the best use following their deaths. A trust can help to protect an inheritance while still providing a benefit to the beneficiaries.
In these situations, a trustee is chosen to oversee the trust administration. The trustee will then ensure that the assets held in trust are really used to benefit the named beneficiaries of the trust. Therefore, when people are choosing a trustee, they have to make sure they choose someone that can efficiently carry out this task. Further, they need someone whom they can trust to effectively administer the trust and its assets.
Michigan law provides some protections in order to make sure that trustees carry out their duties. One such law is the "prudent investor rule." Under section 700.7803 of the Michigan estates and protected individuals code, trustees must follow the Michigan prudent investor rule. In other words, they must act as a prudent investor would in any particular situation while dealing with the property of another. Therefore, even though the trustee is not investing his or her own money, the person must still act prudently. Additionally, if a trustee was selected because of a special skill the person has, this section requires trustees to use any expertise or special skills that the person has while administering the trust.
There are many rules that govern the creation and administration of trusts in Michigan. People must be aware of these rules when they are creating their estate plans and selecting trustees. An attorney may be able to help to make sure people understand these rules. With the right help, people can make their best effort to protect an inheritance and preserve assets through the creation of a trust.