The needs and goals of each person can be met through estate planning, but this does not require each and every estate planning document to be included. One document that individuals in Michigan might want to know more about is a trust.
There are various types of trusts, and each trust type can accomplish different tasks. Depending on what people seek to achieve, they might require one, several or no trusts in an estate plan. To begin, it is important to note that a living trust can either be revocable or irrevocable. A revocable trust is when the creator retains control of all the assets within the trust, and they can change things at any time.
On the other hand, an irrevocable trust is when the assets within the trust are considered to no longer be the creator's. Typically, changes cannot be made to the trust without the consent of the beneficiary. However, the assets in the trust are not subject to estates taxes, which can be a major benefit.
An irrevocable life insurance trust is used to remove life insurance from a taxable estate. It also helps pay the estate costs and provides the creator's heirs with cash for a wide variety of purposes. Finally, individuals could include a qualified terminable interest property trust. This is useful for those that are part of a family of divorces, remarriages and stepchildren. This helps you direct your assets to particular relatives.
Choosing a trust can be complex, especially if you can benefit from various types of trusts. No matter what you choose, it is important to understand that you have rights and options in the estate planning process.
Source: Money.cnn.com, "What kinds of trusts are there?" accessed April 30, 2017