Estate Planning Lawyer in Clinton Township
Call Today For a Consultation 586.690.4400

Living Trusts - Not just for Millionaires

Complex tax planning for the ultra-wealthy almost always involves the use of various trusts. But it is a mistake to think that trusts are only for millionaires. Trusts can provide a number of benefits for those with more modest wealth, as well as those with millions in the bank.

What is a Living Trust?

Living Trusts, or Revocable Trusts, provide more flexibility, more privacy, and various other benefits when compared to a simple Will or other testamentary plan. A properly funded living trust will avoid Probate and the accompanying court involvement. Even with a Will, a Probate Estate will need to be opened to get your property to those named in the Will. With a living trust, there is no Probate or other court involvement when you die. As Probate Estates are a matter of public record, it is not difficult for anyone to get a copy of your Will or the accounting documents that are filed with the Probate Court. A living trust is not administered by a court and does not become a matter of public information.

Living Trusts Provide Maximum Flexibility

Flexibility is another benefit to using a living trust in your estate plan, even if your net worth is not in the millions. This is especially important if you have minor children or children from a prior marriage. A Will can direct property to be divided among your children (or others) in just about any manner imaginable. If you leave behind minor children, however, your Will is not going to stop the minor children from gaining control of their inheritance at the age of 18. Most of our clients do not want their 18 year old child to be in complete control of an inheritance, even if it is a fairly modest amount. With a living trust, the assets remain under the control of a named trustee for as long as you would like, even after your children reach the age of 18. It is not uncommon for a trust to provide for funds to be distributed in pieces, at different ages, to avoid the possibility of the beneficiary blowing the entire inheritance at once. For example, if your child is given 1/3 of her inheritance when she reaches the age of 25, 1/3 at the age of 30 and the remainder at age 35, if she is irresponsible and blows through the entire inheritance at age 25, she will get another chance to manager her money wisely when she is a little older.

Flexibility is also important for many in planning for blended family situations. A common goal of our clients with children from prior relationships is to provide for their spouse during the spouse’s lifetime, but safeguard the kids against the surviving spouse disinheriting the kids if the client predeceases his or her spouse. This is something that can be accomplished with a trust, but is very difficult to implement without one.

Prepare Your Living Trust or Estate Plan

Estate Planning with a trust is not for everyone, but it certainly has its place in planning for a variety of clients, even those without an especially high net worth. The cost of an estate plan that utilizes a living trust is roughly twice that of creating a plan without the trust. The specific situation of each family must be analyzed to determine if a trust plan makes sense. The Macomb County Estate Planning attorneys of Penzien & McBride, PLLC have been helping families and business owners to make these types of decisions for nearly two decades.

If you are looking for a compassionate professional that can help you through the estate planning process or if you would like additional information about our Macomb County based estate planning services give us a call at (586) 690-4400 or complete our contact us form.

Categories: