When it comes to planning an estate, one of the most popular choices is creating a family living trust. That’s because these documents are flexible while still offering a lot of protection.
How a Family Living Trust Works
When you make a living trust, you are known as the grantor and you assign yourself as the trustee. When setting up the trust, you transfer your assets from your name into the name of the trust.
This is commonly known to as funding the trust. This is an essential step when you set up a family living trust because it is what allows your assets to transfer seamlessly to your family members so that they can avoid probate court.
Inside of the trust, you will also name your beneficiaries. Your beneficiaries are the people you choose to inherit your money and property after you pass away. Typically, this is a spouse, children, grandchildren etc.
You can also designate how much each beneficiary will get and stipulate when they should receive their inheritance.
Another important person you will name in your trust is your successor trustee. This person will take over management of your trust if you become incapacitated or die. They will also be responsible for distributing your assets according to your wishes. Now that you know how this document works, here are 4 reasons why you may want to consider setting up a living trust.
Pass Your Assets To Your Loved Ones
If you want to pass your assets to your family in the most efficient way possible, you may want to consider a family living trust. Unlike a last will and testament, a living trust avoids probate court.
Probate court is a long, stressful, and potentially expensive process for your family to go through during a time of mourning. Without a living trust in place, your family will have to go through this process just to get access to your assets.
This process can take months, sometimes years depending on what happens in court. Additionally, probate is public. This means that your will and its contents become public, which may not be ideal. A lot of people wish to spare their family and their estate from the difficulty of having to go through probate, so they create a living trust.
With a living trust, the transfer of your assets often happens in a matter of days or weeks instead of months, or potentially years. Additionally, the transfer happens privately and only the people named in the trust have the right to see its contents.
If you would like to pass your assets efficiently to your family and maintain your privacy by avoiding probate, you should create a living trust.
Keep Control of Your Finances with a Family Living Trust
Another popular reason people make a family living trust is so that they can keep control of their finances after they pass away. What do we mean by this? An example might help.
Say for instance you have young children under the age of 18 and you want to leave behind an inheritance for them. However, you would like to see them reach a certain age or accomplish a milestone like graduating college before they receive their inheritance.
You can do so with a family living trust. Some people also like to maintain control of the finances so they can take care of a family member with special needs. While these aren’t the only examples of scenarios where this may come in handy, it gives you an idea of what is possible.
A Living Trust Can Plan In Advance for Incapacity
Most people think that estate planning is only about planning for your death. This couldn’t be further from the truth. When we talk about comprehensive estate planning, we also address creating a plan to make sure you, your family, and your assets are taken care of in case you become incapacitated and can’t make decisions on your own behalf.
It is very common for people to become incapacitated prior to passing away. Without the proper plan in place, your family could be forced to go through the court system just to get access to your assets. A family living trust can help prevent this because you name a successor trustee to manage your assets if you become incapacitated.
Maintain Flexibility InCase Things Change
Another thing that really appeals to people about creating aliving trust is the flexibility that it provides. A family living trust is revocable, which means it can be changed or revoked at any time.
Sometimes people delay from setting up a living trust because they are worried that it is permanent, and they can’t predict how their future circumstances may change. That’s not a problem with a family living trust because you can change it at any time if your circumstances change.
A family living trust is one of the most popular estate planning documents. Among some if its major benefits are probate avoidance, maintaining privacy and control over your finances, planning for incapacity, and flexibility.
If you are interested in setting up a living trust in Michigan, it is best to work with an experienced trust attorney to make sure that the document is structured properly and is legally binding.
If you want to make a living trust, give us a call at Rochester Law Center to schedule an initial consultation with a trust attorney. We’ve helped 1,000s of clients with estate planning. Call us today at (248) 613-0007.