A trust can be an important part of a person's estate plan. People can rely on the terms of the trusts to carry out their wishes after they have passed away. A trust may have many other benefits for individuals in Michigan and for their families.
However, creating a trust is just one step in the process. A trust is only as good as the assets placed in it. Without being properly funded, a trustee will not be able to use the trust for the benefit of the beneficiaries.
Therefore, it is important that Michigan residents understand how to properly fund their trusts. To properly fund a trust, people need to know what types of assets they want to give to the trust. Under the law, people have the freedom to give a large variety of assets to the trust. However, depending on the types of property, how the property is transferred may be different.
If the property has a title, like real estate, then a person can transfer title of the asset to the trust. This could include things like cars, investments, stocks, bonds and other similar assets. For assets that do not have a title, the rights to the property need to be transferred to the trustee. This property includes personal property, life insurance, intellectual property rights and business ownership rights.
If property has a beneficiary designation, then the property can be transferred by naming the trustee as the beneficiary. Therefore, when the person dies the property is automatically transferred to the trustee. Similarly, a pour-over will can be used to transfer property to the trust after a person dies.
While trusts may seem straightforward, there are many legal requirements that must be met in order for a trust to be valid in Michigan. People should consider consulting with an attorney to ensure that these requirements are met and that a trust will be legally enforceable.