Many people know what a will is, but did you know that a trust is another important way to allocate assets? Read on to learn more about trusts in Michigan and the different responsibilities of the individuals involved.
What is a trust?
A trust is a way to set aside certain assets. For example, you may need to create a special needs trust. This is because leaving assets to a loved one with special needs can actually disqualify him or her from receiving necessary government benefits. A special needs trust can help you leave assets to your loved one while ensuring that it does not impact his government funding. This is just one type of trust, there are a number of different types available in Michigan.
What is a trustee?
A trustee is an individual chosen to manage the trust. This is not to be confused with a beneficiary- the person who receives the assets allocated in the trust.
What does a trustee do?
When choosing a trustee, it is important that you choose someone responsible and dedicated. This is because a trustee has a lot of important responsibilities, including:
- Administering the trust by the terms of the document
- Being reliable to the beneficiaries of the trust
- Dealing with the beneficiaries impartially
- Avoiding conflicts of interest between you and the trustor or beneficiaries
- Legally separating and recognizing trust property
- Carefully managing and investing the trust’s assets
A trustee’s role may begin at different times. In many cases, a trustee’s role begins once the trustor (the creator of the trust) passes away. Once this occurs, the trustee’s first duty will be to identify and secure trust property, find the governing trust documents, and take an inventory of each asset. Additionally, the trustee is responsible for paying the trust’s taxes. Additionally, he or she may need to pay for inspections of land or other valuable assets to have a strong understanding of the extent of the trust’s assets. Once the necessary tasks are completed, the trustee can begin distributing assets to beneficiaries as described in the trust.
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