A trust can be a great tool when it comes to estate planning. But, before delving into the process, it is important to understand the use of a trust, the parties involved, and the different types. Read on to learn more.
What is a trust?
A trust is an agreement that allows a person to select a trustee and allow them to take care of assets until the beneficiary inherits them. There are three main parties involved in the creation of a trust. They include the following:
- Trustor: This refers to the person who creates the trust
- Beneficiary: This is the person who will receive the assets allocated in the trust
- Trustee: The third party is assigned to maintain the assets on account of the beneficiary
What are the different types of trusts in Michigan?
Everyone is different and has different needs when it comes to estate planning. As a result, there are a number of different trusts available in Michigan. Some of the most common types include:
- Revocable Trust: This type of trust is one of the most frequently chosen by trustors because it can be modified, changed, or terminated at any time without the need for the beneficiary’s consent.
- Irrevocable Trust: This type of trust requires a trustor to give up their rights and any access to the trust at the time that it is produced. This implies they cannot change or terminate it at any point.
- Irrevocable Life Insurance Trust: This type of trust authorizes a trustor to remove their life insurance from the estate plan so that their beneficiaries are free from any taxes that are put on it.
- Special Needs Trust: This refers to when a loved one with a disability is chosen by a trustor to make sure they receive the financial support they need throughout their life.
If you are interested in creating a trust, contact our firm today to discuss your options. We are here to walk you through the process each step of the way.
Contact our Firm
Sometimes, divorce, family, and estate matters are difficult to navigate. Fortunately, they do not have to be with the assistance of a compassionate, knowledgeable attorney who is willing to guide you every step of the way. If you need a seasoned firm to help you with any divorce, family or estate-related matter, please do not hesitate to contact Collis, Griffor & Hendra today to schedule a consultation.
