A Northern Michigan trust attorney can help you to determine if a trust is right for you and, if a trust can be a helpful part of your estate plan, an attorney can help you to create a trust. Biddinger & Estelle, PC has extensive experience with different types of trusts and can help clients to ensure that they make a legally valid trust that provides expected protections. Five key reasons when it makes sense to create a trust include the following.
To plan for assets to transfer outside of probate
The probate process can be a time-consuming process that takes several months for the court to confirm the validity of a will or to determine who inherits under intestacy laws. During that time, an executor is left trying to manage assets while heirs who are depending upon an inheritance may not have access to money that they need. If you want assets to be able to transfer through the much faster process of trust administration, you can create a trust instead of, or in addition to, a last will and testament.
To name someone who can manage assets in case of incapacity
If something happens to you, you want to ensure that a trusted person can take over the management of your assets right away. If you create a trust and transfer assets into it, you can name a trustee (or a backup trustee if you are the primary trustee). The person who you name as the trustee will have the authority to begin managing the assets held within the trust. If you choose a person who you can count on to manage those assets in a responsible way, you can rest assured that losses won’t occur due to mismanagement in the event of your incapacity.
To protect assets held within the trust
Assets that are held within certain types of trusts can be protected at the end of your life and after you have passed away. For example, some trusts can allow you to keep assets safe in case you face high costs for nursing home care. While you would typically have to pay out-of-pocket for nursing home care and spend your assets until you have impoverished yourself enough to qualify for Medicaid if you wanted nursing home care paid for, you may be able to keep some of your assets safe by putting them into an irrevocable trust at least five years before the time when you need Medicaid. Medicare and most other private insurers, including Medicare Advantage policies, only pay for a nursing home in very limited circumstances, so making an asset protection plan is important. Trusts could also help to protect assets from various other types of loss as well.
To leave assets to someone who cannot manage them alone
If you want to leave money to someone who is underaged, to someone who is irresponsible with money, or to someone with a disabling condition, that person may not be able to manage money on his own. You may need to talk with an attorney to find out the right type of trust to use for that heir so you can give him or her money without worrying about it being lost. For example, a special needs trust would allow you to leave assets to a disabled person, while a spendthrift trust could allow you to leave money to someone who is not responsible with their spending. The person who you want to provide for could be named as the trust beneficiary and you could then name a responsible trustee to manage trust assets and use those assets to provide for the chosen beneficiary.
To reduce or avoid estate taxes
If your estate is large enough to trigger estate taxes, a significant portion of the money and property that you want to leave to your loved ones could be lost to the government when your estate is forced to pay taxes after you pass away. An attorney can help you to determine if you can use a trust in order to reduce or avoid estate tax. A trust may even be necessary if you want to leave assets to your spouse who is not a United States citizen in order to avoid tax upon your death.
Contact a Northern Michigan Trust Attorney to Find Out More
Biddinger & Estelle, PC will help you to determine if you should create a trust and will guide you through the process of creating one. To find out more about how a Northern Michigan trust attorney can guide you through the trust creation process, join us for a free estate planning seminar. You can also call us today at (989) 872-5601 or contact us online for personalized information on how we can help you.