Estate Planning
Trusts
Maximizing Your Estate’s Potential With Trusts
At The Law Offices of Jarrett R. McCartney, PLLC, we help you create tailored trust solutions to protect your assets and ensure your wishes are honored.
Our experienced team in Michigan is dedicated to making estate planning straightforward and effective. We aim to ensure the security of your future with a comprehensive trust plan.
Our firm specializes in creating trusts that provide peace of mind and financial security. Whether you’re looking to establish a revocable living trust, an irrevocable trust, or an asset protection trust, we offer personalized guidance to meet your unique needs.
Let us help you walk through the complexities of trust creation and management. Get in touch for a consultation today to take the first step toward protecting your estate.
Protecting Your Loved Ones & Assets With Strategic Trusts
Without a trust, your assets may go through probate, a lengthy and public process that can expose your estate to unnecessary expenses and potential disputes. This lack of planning can leave your loved ones without clear instructions and financial support during critical times.
Imagine your family struggling to access funds for immediate needs or dealing with contested assets in court. The lack of a clear and legally binding plan can lead to family conflicts and financial hardship, adding stress during an already difficult period.
Establishing a trust with the help of The Law Offices of Jarrett R. McCartney, PLLC, ensures that your assets are managed and distributed according to your wishes, without the delays and costs of probate. Trusts offer privacy, control, and flexibility, allowing you to dictate the terms of asset distribution and provide for your loved ones efficiently.
Our experienced team helps you create a trust that addresses your specific concerns and secures your legacy.
Trusts are a powerful tool in estate planning, providing numerous benefits such as avoiding probate, reducing estate taxes, and protecting assets from creditors. They can also provide for minor children, support charitable causes, and ensure that beneficiaries with special needs are cared for without jeopardizing their government benefits.
At The Law Offices of Jarrett R. McCartney, PLLC, we are committed to helping you understand the importance of trusts and how they can enhance your estate plan.
Contact us today to learn more about how we can assist you in creating a trust that meets your goals and provides lasting security for your family.
5 Benefits of using trusts to plan your estate
Trusts offer many benefits to Michigan residents planning for the future. Whether you’re looking to protect assets from creditors, ensure that a grown child with poor spending habits can handle an inheritance, or protect family from the expenses of probate court, we’ve got you covered.
Let’s explore the major benefits of trust creation as part of your estate plan:
- Avoiding Probate
A major advantage of trusts is that they allow your estate to bypass the probate process. This not only keeps your affairs private but also expedites the distribution of assets to your beneficiaries, saving time and reducing legal fees.
- Revocable Living Trusts
Revocable living trusts are popular for their flexibility. They allow you to retain control over your assets during your lifetime and make changes as needed. Upon your death, the trust assets are transferred to your beneficiaries without going through probate, ensuring a smooth transition.
- Irrevocable Trusts for Asset Protection
Irrevocable trusts can protect your assets from creditors and lawsuits. Once assets are placed in an irrevocable trust, they are no longer considered part of your estate, which can also help in reducing estate taxes. However, note that MI does not impose an inheritance or estate tax. This means that unless your estate is over the Federal exclusion, you don’t need to worry about the tax aspects of asset protection for your estate.
- Special Needs Trusts
Special needs trusts are designed to provide for beneficiaries with disabilities without disqualifying them from government benefits. This ensures that they receive the financial support they need while still being eligible for essential services.
- Charitable Trusts
Charitable trusts enable you to support your favorite causes while receiving tax benefits. You can set up a charitable remainder trust, which provides income to you or other beneficiaries for a specified period, after which the remaining assets go to a designated charity.
FREQUENTLY ASKED QUESTIONS
How do trusts help in avoiding probate?
Trusts help in avoiding probate by transferring ownership of assets directly to the trust, which is managed according to the terms set by the grantor. Since the assets are legally owned by the trust and not the individual, they do not need to go through probate upon the individual’s death.
This ensures a quicker, private transfer of assets to beneficiaries, saving time and reducing costs associated with the probate process. Additionally, trusts can provide continuous management of assets, which is beneficial if the grantor becomes incapacitated.
How do trusts protect my assets from creditors and lawsuits?
Trusts help in avoiding probate by transferring ownership of assets directly to the trust, which is managed according to the terms set by the grantor (you).
Since the assets are legally owned by the trust and not the individual, they do not need to go through probate upon the individual’s death. You also appoint a trustee who will manage your trust before or after your death depending on the type of trust. Their management is according to your trust documents and not overseen by a probate court.
Trusts ensure a quicker, private transfer of assets to beneficiaries, saving time and reducing costs associated with the probate process.
Additionally, trusts can provide continuous management of assets, which is beneficial if the grantor becomes incapacitated.
Can I make changes to my trust once it’s established? (Irrevocable vs Revocable)
In Michigan, the ability to make changes to a trust once it’s established depends on whether the trust is revocable or irrevocable.
Revocable Trusts
A revocable trust, also known as a revocable living trust or inter vivos trust, offers significant flexibility. The grantor (the person who creates the trust) retains the right to modify, amend, or completely revoke the trust during their lifetime. This means that beneficiaries, trustees, and terms of the trust can all be changed as circumstances or intentions evolve.
This flexibility is one of the primary reasons revocable trusts are popular in estate planning, as they allow for adjustments in response to changes in personal, financial, or family situations.
Irrevocable Trusts
In contrast, an irrevocable trust generally cannot be changed or revoked once it has been established. When assets are placed into an irrevocable trust, the grantor relinquishes control over these assets. The terms of the trust, beneficiaries, and other specifics typically cannot be altered.
This rigidity, however, provides benefits such as asset protection from creditors and potential tax advantages. For instance, assets in an irrevocable trust are usually not considered part of the grantor’s estate, which can help reduce estate taxes and protect the assets from being claimed by creditors.
While revocable trusts provide the ability to adapt to new circumstances, irrevocable trusts offer stronger protections and certain financial benefits. The choice between the two types of trusts depends on your specific needs and goals in estate planning.
How do I ensure my trust remains updated and valid over time?
To ensure your trust remains updated and valid over time, it is crucial to periodically review and amend it as necessary. This is important because life circumstances and laws can change, which may affect the provisions and effectiveness of your trust.
Regular reviews with an attorney are essential. You should review your trust every few years or whenever a significant life event occurs, such as a marriage, divorce, birth of a child, death of a beneficiary, or a substantial change in your financial situation. An attorney can help you identify any necessary updates to ensure that your trust continues to meet your goals and complies with current laws.
In Michigan, the Michigan Trust Code (MTC) provides guidelines for updating trusts. For example, trustees can provide trust certificates instead of the full trust agreement to ensure the trust remains confidential while still verifying its validity and the trustee’s authority in transactions. This can help maintain the trust’s effectiveness and protect its assets from unauthorized claims or mismanagement.
By keeping your trust updated, you ensure that it reflects your current wishes and circumstances, maintains its legal validity, and continues to provide the intended benefits to your beneficiaries. Regularly consulting with your attorney and making necessary amendments can safeguard your trust’s integrity and effectiveness over time.
What are the costs associated with setting up and maintaining a trust?
:The costs associated with setting up and maintaining a trust in Michigan can vary based on several factors, including the complexity of the trust, the type of assets involved, and the fees charged by professionals such as attorneys and trustees.
- Setting up a trust: Creating a basic trust typically costs between $1,500 and $3,500. For more complex trusts, the costs can range from $3,500 to over $5,000. These costs include attorney fees, which can vary significantly depending on the lawyer’s experience and location, notary fees (usually under $50), and filing fees for registering the trust with local authorities (generally $100 to $200).
- Maintaining a trust: Maintaining a trust involves ongoing costs, including trustee fees. Professional or corporate trustees often charge an annual fee based on a percentage of the trust’s assets, typically between 0.5% and 2%, with some having a minimum fee. Individual or family trustees may charge less or not at all.
- Tax preparation and filing fees: Simple trusts might incur tax preparation fees ranging from $200 to $500 per return, while more complex trusts could see costs from $500 to $2,000 or more.
- Legal fees: Annual legal costs can range from a few hundred to several thousand dollars, depending on the level of legal oversight required. Investment management fees. These fees typically range from 0.25% to 1.5% of the managed assets annually.
- Banking fees: Monthly service fees can vary from $0 to $50, with additional transaction fees for services like wire transfers.
- Appraisal fees. Appraisals for real estate and other valuable assets can cost between $300 and $600 or more. Insurance premiums. These depend on the type and value of the insured assets.
- Record-keeping and reporting. Professional record-keeping and reporting services can add several hundred to a few thousand dollars annually.
- Miscellaneous costs: These can include property upkeep, storage fees, and costs associated with asset distribution to beneficiaries.
These costs reflect a broad range of potential expenses, ensuring that your trust is properly managed and that your assets are distributed according to your wishes.
By understanding these costs, you can make informed decisions about setting up and maintaining a trust, ensuring that it meets your estate planning needs while staying within your budget.