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.
In general, the trust will name a trustee, who is responsible for managing the assets in the trust according to the wishes of its creator during his or her lifetime and after. Most trusts are revocable, meaning that the person who created the trust continues to control the assets and can make changes in how they will be handled throughout his or her life.
Trusts can be important tools for many reasons, including the options they present for leaving assets to minor children, people with special needs or others who may need support and guidance to manage their funds. An estate planning attorney can provide guidance on the creation of a trust and other key documents.