If you’re like most people, your primary goal in creating an estate plan is simple: Ensuring your loved ones are cared for and your assets are distributed according to your wishes. This is where an irrevocable trust, a powerful tool to avoid probate, comes into play.
Avoiding probate keeps your family’s private affairs out of the public eye and can help your beneficiaries obtain their assets more quickly. The process may sound daunting, but rest assured, you have help.
At Mihelich & Kavanaugh, our Michigan probate lawyers understand your concerns and want to aid you in protecting your family’s future. Let’s delve into how an irrevocable trust can make your estate plan journey smoother and provide you and your family peace of mind.
What Is a Trust?
Put simply, a trust is a legal arrangement where you entrust your assets to a trustee, who is a trusted person or organization that manages those assets for your chosen beneficiaries. It’s much like asking a reliable friend to look after your valuables with specific instructions on distributing them.
What Makes a Trust “Irrevocable?”
There are various types of trusts, each with unique characteristics for different purposes. In estate planning, two common categories of trusts are revocable and irrevocable. The former can be changed or revoked during your lifetime, while the latter, once established, is generally unalterable without the beneficiaries’ consent. Our focus here is on irrevocable trusts, a potentially strategic choice for avoiding probate.
How Does an Irrevocable Trust Help Families Avoid Probate?
Probate is the legal process by which a deceased person’s will is verified, their estate is administered, debts are paid, and remaining assets are distributed to the heirs. It can be time-consuming and costly, and probate proceedings are public records in many cases. The allure of an irrevocable trust lies in its ability to help families sidestep this procedure.
In an irrevocable trust, you transfer ownership of your assets to the trust. Once this happens, these assets are no longer considered part of your estate — they belong to the trust. Therefore, upon your death, since these assets aren’t technically yours, they aren’t subject to probate.
Establishing an irrevocable trust not only expedites the distribution of assets to your loved ones, but it can also preserve the privacy of your estate, as the details of the trust don’t become a matter of public record. Moreover, setting up a trust can also offer tax advantages and protection against creditors, enhancing the security of your family’s future.
Potential Downsides of Irrevocable Trusts
While irrevocable trusts offer substantial benefits, they come with certain limitations that are important to consider. The most significant is the loss of control. Once you transfer your assets into an irrevocable trust, you generally can’t alter, amend, or terminate the trust without the permission of the beneficiaries. This means you lose the flexibility to adapt the trust to changes in circumstances or desires.
Furthermore, setting up an irrevocable trust can be complex and time-consuming. It requires careful planning and proper legal guidance to avoid errors and ensure your trust serves its intended purpose. Given these potential drawbacks, it’s crucial to weigh the pros and cons, ideally with the guidance of a knowledgeable attorney who understands your unique needs and goals.
Let Our Michigan Probate Lawyers Safeguard Your Final Wishes
Establishing an irrevocable trust is more than just a legal decision – it’s a commitment to your family’s peace of mind and security. And we’re here to support you every step of the way. Our team can help you understand the implications of your decisions, foresee potential hurdles, and make adjustments that serve your interests best.
With a skilled attorney at your side, you can take comfort in knowing your family’s future is safe. Call Mihelich & Kavanaugh today at (586) 776-1700 for a consultation, or you can complete our online form.