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News And Thoughts On The Law In Michigan, Illinois And Beyond

Considering the advantages of a trust

When people in Michigan think about the future and how they want to manage their affairs, they may think first of making a will. People may not think much about trusts, or they may assume that they are only for the super-wealthy. However, trusts are flexible, adaptable instruments that can help people in a wide variety of situations achieve their goals more precisely and privately during the estate planning process.

There is a difference between a will and a trust. The will designates who will receive a person's property after they pass away. It may divide assets by percentages or specify that specific items are to be distributed to different people, and it will name an executor to handle the distribution and present the document to probate court. It only goes into effect after death and deals solely with one person's property. A trust is different because it goes into effect immediately after its creation. While it can direct the distribution of assets after death, it can provide for more complex solutions. Unlike a will, a trust does not need to be presented to a probate court.

Tom Petty's widow and daughter in estate feud

Michigan fans of singer Tom Petty may have to wait a while to enjoy more releases from the late singer's catalog. The singer's widow is in a probate battle with one of his daughters that could affect the planned release of new compilations. His widow filed a petition in a Los Angeles court. In the document, she alleges that her late husband's daughter attempted to take control of Petty's estate.

Since Petty died of an accidental drug overdose in October of 2017, two compilation albums have been released. One is a boxed set, and the other one is a "best of" collection. Future plans, which include a re-release of the singer's 1994 solo album "Wildflower" with unreleased tracks, are now on hold until this estate fight is over. The singer married his second wife in 2001; his two daughters are from his first marriage.

Michigan residents can learn from Lee Radziwill's estate plan

Estate planners have many tools at their disposal, including wills and trusts. Revocable trusts, known for their ease of administration, are often used to protect and distribute assets while maintaining privacy. This is one of the reasons that wealthy families rely on them to manage family line assets and perpetuate dynasties. The same can be said for Lee Radziwill and her estate plan.

Radziwill's passing ended an era. Known for her family pedigree and iconic fashion sense, her elegant lifestyle was one of style and poise. Reflecting that lifestyle, Radziwill's estate plan was said to be complex and thorough. Although she had a revocable trust, she also had a will, which was necessary to handle certain elements that could not be included in a revocable trust document.

Trusts Offer a Wide Array of Probate Solutions

In Kalamazoo and across the United States, people have various options for drawing up different kinds of trust documents. Since each person has different requirements, it is best to consult with an experienced estate planning attorney. A grantor trust, which is also called a living trust, is the most common type of trust that has the power to avoid probate. In fact, one major reason for creating a trust is so that the beneficiaries do not need to go through probate.

A grantor trust enables the grantor or trustor to put assets into the trust and take assets back out of the trust. A revocable living trust means that the trustor has a legal right to revoke the trust. Parents who take care of a child with a disability may wish to set up a special needs trust. This type of trust is for a person who has a serious physical or mental impairment requiring assistance from the government.

How to calculate and report a gross estate

Thanks to the Tax Cuts and Jobs Act, Americans now have a federal estate tax exemption of $11.18 million. That number doubles for married couples who are combining their federal estate tax exemption. The value of an estate is the total of all assets held wherever they are located. It also includes interests in property as well as property that a person may not directly own but has some form of control over.

In some cases, a gross estate may include the value of life insurance policies even if someone other than the estate is the beneficiary. If an individual's estate is worth more than the exemption, it may be necessary to pay taxes. Taxes owed must be paid no later than nine months after an individual passes away. The government does allow an estate to ask for an extension to file a federal estate income tax return. However, this extension does not provide an estate with extra time to pay a balance.

Three common mistakes to avoid when buying a business

Buying a business can be a more affordable and less risky path to entrepreneurship than starting a business from scratch. When you buy a business, it probably already has inventory, equipment, trained employees and customers. You are also able to base your purchase off records of past profits and losses instead of projections.

There are many benefits to buying a business. However, there are also some common pitfalls you should try to avoid as you begin this process.

How to plan to live forever

Michigan residents and others may have thought about freezing themselves at the time of their deaths. The goal of taking part in the cryonic process is to keep the body intact until science can figure out a way to cure death. Of course, that can raise some unique estate planning issues. A revival trust is a tool that can help a person preserve financial and other resources on which to live when he or she comes back to life.

The trust on its own can cost anywhere from $5,000 to $15,000, and that does not include the cost of having the body put into a cryostat. An issue that could arise is the tax treatment of the trust itself. While there is no official word from the IRS on what they would do if someone came back to life, the agency does have a policy of not taxing money twice.

Potential for changing irrevocable trusts

For Michigan residents who have worked to develop substantial assets, certain life changes may cause them to rethink earlier estate planning decisions. In most cases, trusts are excellent estate planning options that allow for higher levels of flexibility and privacy, especially for people with significant wealth. Most trusts are revocable, which means that they can later be changed or canceled. However, irrevocable trusts are created with the idea that they are permanent and not subject to amendment.

In some cases, this may lead to conflict down the line. For example, family members might develop conflicts after the creation of a trust. More seriously, a trust may not contain important special needs provisions to protect disabled beneficiaries. Many people create irrevocable trusts that do reflect their precise goals and plans. However, by the end of 2018, 25 states had passed "decanting" statutes that allowed one irrevocable trust to be transformed into another trust, a procedure sometimes called a "do-over trust."

Using revocable trusts

The details of an effective estate plan will vary from case to case, but it will generally include a power of attorney, a will, medical directives and other legal instruments, such as a revocable trust. Having a revocable trust as part of their estate plan can help Michigan residents address many of the concerns they may have about the management of their estate.

After the grantor of the revocable trust dies, the trust will remain effective forever, ensuring that the grantor's wishes regarding an estate are honored. If the grantor also serves as the trustee of the trust, the provisions of the trust should have instructions for selecting successor trustees.