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Last Will And Testament, Revocable Living Trust, Irrevocable Living Trust – Which To Choose?
There are a lot of different options to choose from when trying to decide how to structure your estate plan.
Last will and testament, revocable living trust, irrevocable living trust – which do you, choose? Each of the different documents we mentioned has pros and cons and they are all used in different situations depending on your estate planning goals.
Living trusts are one of the most popular options people choose to act as the foundation of their estate plan. Why? This article will explain some of the reasons people choose a living trust.
Living Trust Flexibility
A living trust in Michigan is a great option because of the combination of flexibility and protection it provides. It’s revocable which means you can change it at any time during your life.
If you want to change who will receive your assets after you pass, you can do so. Additionally, if you would like to add or remove assets that you placed in your trust, this is no problem.
All of the assets you placed in your trust for protection can be managed just like you do now. For example, if your house is in your trust and you wanted to sell it, you can do so no problem.
This differs from an irrevocable trust because an irrevocable trust can’t be changed. These trusts are usually used for very specific situations like planning for a family member with special needs.
They can also provide certain tax or credit shields.
But, in most cases people can achieve their goals with a revocable living trust because they can amend it if they change their mind.
2. Protection from Probate Court
One of the major reasons residents in Michigan choose a living trust over a last will and testament is because a living trust avoids probate court - a last will does not. Without a living trust, your family will have to go through the probate court process after you pass away.
Probate can be long and stressful for your family when they are already going through a difficult time mourning your loss.
Additionally, if an upset family member challenges your will, it can further delay your family’s ability to access the assets you wanted them to have.
A living trust allows you to avoid this process. The transfer of your assets is done privately, typically in an attorney’s office, and is handled by your successor trustee.
Your successor trustee is a person you trust who you appointed to distribute your assets to your beneficiaries when you were writing your living trust. The transfer of your assets can often happen in a matter of days rather months, or years.
3. Planning for incapacity
A living trust takes effect the moment it is signed. For this reason, people create living trusts to plan for cases of incapacity.
It’s not uncommon for people to become sick or mentally incapacitated prior to passing away.
Writing a living trust allows you to make medical and financial plans to take care of yourself and your family if you are unable to make decisions for yourself.
If something were to happen to you, your successor trustee would step in to manage your trust and ensure that you were getting the proper medical attention.
Additionally, you can outline your medical wishes and assign a person you trust to make sure those wishes are carried out.
This differs from a will because a will only takes effect after you pass away. As a result, it does not have the ability to protect you and your family from incapacity.
In Michigan, living trusts are very popular because of how flexible they are while still providing so much protection for probate and incapacity.
While a will or irrevocable trust have their place, they may not be right for every estate planning situation.
Will, trust, and estate law is complex. If you are interested in drafting a living trust in Michigan, consult with an experienced trust attorney.
Clea Smith is a USA based author on Legal issues related to estate planning, will & trust , business law and elder law. Clea Smith does his best writing on these topics that helps users to find the best solutions to their FAQ on estate planning, probate, living trust vs will and more about legal family issues. Author Clea Smith can be reached through rochesterlawcenter.com
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