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Trusts Archives

Taxation concepts related to Michigan trusts

Trusts are an important, yet commonly overlooked, part of Michigan estate planning. Many other people who are considering creating a trust for their estate planning needs do not understand the various tax implications associated with the different kinds of trusts. Choosing the correct trust for a person's needs requires understanding the relevant tax consequences, however, in addition to understanding the different ways each kind of trust functions and the different benefits.

The basics of a living trust

Although they are commonly overlooked, trusts constitute an important and valuable part of estate planning. Trusts can take a variety of different forms, but they all generally provide ways to protect an estate and ensure that the trust creator's wishes are carried out. In essence, a trust is a legal word or concept that describes a relationship between two people in which one person holds the legal title to property for the benefit of the other person. In many cases, there are three primary people who are involved with a trust: the settlor, trustor or grantor, the trustee and the beneficiary.

What is a marital trust and what does it accomplish?

One of the key goals of estate planning for many Michigan residents is tax planning and providing for their relatives and heirs. People want to figure out the best way to set up their wills and inheritances so that the maximum amount possible of the estate is preserved for heirs and beneficiaries instead of going toward taxes. Trusts can be a very valuable tool for tax planning and estate planning purposes.

Trusts should not be overlooked when estate planning

Many Michigan residents put off discussing estate planning or making plans for after their death because it is uncomfortable to think about. However, the desire to leave money, assets, or other possessions to one's children often motivates people to take the steps to begin this planning process. Although there are many different options available for protecting one's own interests, as well as the potential interests of prospective heirs, trusts should not be overlooked.

Understanding the basics of a revocable trust

Many people avoid estate planning altogether because it tends to be an uncomfortable subject. Other people may tackle estate planning head-on but rely primarily on a will as the way to ensure that their wishes are carried out upon their deaths. There are some things that a will cannot do, however, that trusts can--and these things are often beneficial to the owner of the trust.

Trusts serve many purposes, provide inheritances to children

Because people work so hard for their money during their lives, they often want to be the ones to decide where it will go and how it will be used after their deaths. Many Michigan residents fail to make plans and arrangements involving their money until it is too late, however. This often means that their wishes are not fulfilled and conflicts easily arise among family members about inheritances. Trusts provide an effective vehicle to prevent these problems and ensure that a deceased's wishes are carried out after-or even during-his or her death.

Real estate can also be included in a charitable trust

Going through the process of estate planning is all about making sure an individual's assets and property wind up in the right hands upon passing away. Although close relatives are often top candidates to receive these assets, people may also have strong connections to certain charitable causes or organizations.

What is a pour-over trust?

When taking the first steps to create an estate plan, people might hear a lot about wills and trusts. As this happens, it's natural to wonder if specific types of estate planning instruments will actually be beneficial. One increasingly common strategy is to use a pour-over trust in conjunction with a will as people take important steps to protect their legacies.

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