Trusts: An Estate Planning Solution For Every Problem
Trusts are one of the most powerful and flexible estate planning tools available in Michigan. By transferring ownership of your assets and property to a trust, with clear guidelines for how it is to be distributed after your death, trusts protect your estate while you’re alive and safeguard your legacy after you pass on.
No matter what problem you are facing in estate planning or asset protection, a trust can be built to offer a solution. However, not all trusts are created equal. Each requires different rules and offers distinct advantages and disadvantages. For example, the most significant difference in the most common options includes those between Irrevocable and Revocable Trusts. Fortunately, this is exactly where Attorney Andrew Mateskon steps in, decoding the complicated rules and guidelines and helping you choose the best option to serve your needs.
What Makes A Trust Revocable Or Irrevocable?
Every trust is set up with different rules governing how assets are added, removed, managed, and distributed upon your death. The key difference between a revocable and irrevocable trust is the ability to modify those rules and the assets you added to the trust after you have set it up.
- Revocable trusts are often called “living trusts'' because while you are alive, it is relatively easy to add and withdraw assets or even change the rules and guidelines for their management. You can think of this as the “uncertain trust" – if you know that you want a trust but are not 100% sure of the form it should take or the rules that should govern it, chances are your attorney will advise a revocable trust.
- Irrevocable trusts, on the other hand, are almost impossible to modify once established. Assets can only be taken out under rare and extreme circumstances, and all beneficiaries must approve any changes. This trust might as well be set in stone. But as a result, it also offers an even greater level of protection for your estate and assets.
Which Type Of Trust Do You Need?
The Advantages And Disadvantages Of Revocable And Irrevocable Trusts
Any trust will be constructed specifically to address your problems and offer the ideal solution to them; that is the genius of trusts. However, there are certain strengths and weaknesses for each type of trust that you can take into account when planning ahead.
- Flexibility: Irrevocable trusts are significantly less flexible than revocable trusts, as they cannot be changed nearly as easily. If your circumstances or perspectives are likely to change, consider avoiding an irrevocable trust.
- Asset Protection: Both types of trusts can serve to protect your assets from things like the Michigan probate process. However, irrevocable trusts offer significant additional protections, including against creditors, liability claims, and taxes. This can be particularly essential for professionals in domains where liability risks or costs are high, such as medical professionals, airline pilots, and more.
- Cost: Setting up a trust is not something you want to do on a budget. While the initial cost can be significant for both revocable and irrevocable trusts, the long-term benefits, savings, and protections make both types worthwhile. It’s also important to note that working with a skilled attorney is essential, as you do not want any errors or loopholes in the trust’s rules and guidelines that weaken its legal solidity.
- Management: Every trust is managed by a trustee, responsible for making investment decisions and beneficiary distributions. In the case of a revocable trust, you, as the grantor (the person who funded the trust), can also act as the trustee. In an irrevocable trust, however, you cannot. Instead, you will need to choose a trusted attorney or other qualified professional to carry out these duties. Additionally, you can opt to appoint an additional trust protector who is assigned to supervise the trustee.
Don’t Trust In Fate. Take Fate Into Your Own Hands!
When it comes to determining how your assets are distributed after your death, trusts offer greater certainty than any other estate planning tool. In addition, they can protect your wealth, savings, and even property during your lifetime, offering significant advantages against a multitude of uncertainties.
However, like all estate planning tools, a trust must be set up before you encounter the problem – not after. By looking ahead and working with your trusted advisors and attorneys at Mateskon Law, you can build the perfect solutions to your needs with either a revocable or irrevocable trust.
Call to consult our firm today for more information about the benefits of an irrevocable trust or the advantages of a revocable living trust. Get the information you need to begin setting up the solutions you deserve.