There are a number of documents that must be included for an estate plan to be complete. This includes trusts. Trusts are one of the most important estates planning documents because it allows a third party to manage assets. Continue reading to learn more about the different trusts available in Michigan and speak with one of our experienced estate planning attorneys.
What is a trust in Michigan?
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 has unique life circumstances, which is why there are various types of trusts that can be used according to each individual’s lifestyle and needs. Some of the most common types of trusts that are available to choose from in Pennsylvania include the following:
- 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.
- Charitable Trust: There are two different types of charitable trusts. A charitable trust allows the individual’s choice of charity to gain interest from the financial gift for a specific period of time. When the period terminates, the remaining assets may go to other beneficiaries. A charitable remainder trust allows charities to receive the assets in a trust at the end of its term. Until then, the donor sustains interest in the gift.
- 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 have questions concerning the different types of trusts in Michigan, contact our firm today to learn more.
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