Considering a trust is a key initial step in Michigan estate planning. However, the often-overlooked crucial step is funding the trust. If this option aligns with your interests, this blog post details the necessary actions for transferring real estate into a trust. It also underscores the importance of consulting with an experienced Washtenaw County Trusts Attorney to fully understand your available choices.
What Are the Benefits of Establishing a Trust?
Incorporating a trust into your estate plan offers several advantages. Primarily, it allows you to bypass probate, which is a court-supervised process for asset distribution that can be expensive, lengthy, and public. Trusts facilitate the direct transfer of assets to beneficiaries, circumventing this process, potentially saving time and money.
Moreover, trusts grant you control over the distribution of your assets, allowing you to specify how and when they are distributed to your beneficiaries. This is particularly beneficial for managing inheritances for minors, individuals with special needs, or those who may lack financial responsibility. You can establish conditions for distributions, like achieving a certain milestone.
Furthermore, certain types of trusts can shield assets from creditors, lawsuits, or even divorce, helping to preserve wealth for future generations. Trusts can also be structured to reduce or eliminate estate, gift, and income taxes. This can be crucial for those with substantial estates or those aiming to minimize the tax burden on their beneficiaries.
What Steps Must I Take to Transfer Real Estate Into a Trust in Michigan?
First and foremost, you will need a valid trust document that outlines the terms of the trust, identifies the trustees, and names the beneficiaries. Following the establishment of your trust, you will need to create a new deed for the property you wish to transfer. You will typically choose between a quitclaim deed, which is simpler and frequently used, or a warranty deed, which provides greater protection by guaranteeing a clear title.
The deed requires signing, notarization, and recording with the Register of Deeds in the county where the property is located. If the property has a mortgage, it’s crucial to consult with your lender and insurance company before transferring the deed to the trust to prevent any violation of your loan or insurance policy terms.
Given the numerous important considerations involved, it’s highly advisable to consult with an experienced attorney at Collis, Griffor, & Hendra to discuss your legal options. Our legal team is well-versed in the complexities of these matters and committed to empowering you to make the best decisions for your unique circumstances. Contact us today to learn how we can assist you.