Michigan estate planning: Trust options

Figuring out what to include in an estate plan can be challenging and downright confusing at times. There is a lot of information to consider and numerous options available for protecting assets and beneficiaries. For many Michigan residents going through the estate planning process, setting up trusts may be the way to go in order to achieve all the desired protections. But what kind of trust is best?

There are several trust options to choose from, which is a good thing. There are trusts that can be created and managed during one's lifetime, and there are others that can be formed to be effective after one's death according to the specifications included in a will. Regardless of when or how a trust is put together, any and all assets that are included in the trust will be subject to the terms of the trust agreement.

The most commonly used trusts are revocable and irrevocable trusts. A revocable trust is one that is created during a person's lifetime -- also known as a living trust. The trust maker has the ability to modify or revoke it as he or she sees fit.

An irrevocable, on the other hand, cannot be revoked or modified after it is created without the consent of the beneficiary. This is because any assets put into the trust no longer belong to the trust maker. This may seem a little extreme, but it does serve a purpose. Estate taxes do no apply to certain assets put in this type of trust.

When going through the estate planning process, Michigan residents will have to make tough decisions about how to protect their loved ones and their assets. For those who need them, there are several other trust types beyond revocable and irrevocable trusts that can be utilized for very specific purposes. An experienced estate planning attorney will be able to review all trust options with the client and assist him or her in setting up the one that will best serve his or her specific needs.

Source: money.cnn.com, "What kinds of trusts are there?", Accessed on Feb. 14, 2017