Many people wish to transfer assets to their loved ones. However, there are several questions involved in this process. How will this transfer occur? Will the receiving party need to pay taxes? What role will the probate court play in this process?
Although transferring property can be a complex legal task, an experienced attorney can help simplify it. A trust functions by allowing you to transfer ownership over property to another person at any time and occurs outside of the probate process. If you are considering transferring property, you should reach out to a Lansing trusts lawyer at the Leydorf Law Firm, PLLC for more information on how these tools can be an integral part of your estate plan.
Probate is a process that occurs whenever a person dies. It exists to ensure that a person’s estate receives proper administration and that heirs receive the correct assets as outlined in a person’s will.
Unfortunately, the probate process is often lengthy and expensive. Challenges to wills as well as concerns over the administration of an estate can cause probate to drag on for months or years. Using a trust as an alternative to a will can ensure the swift and efficient transferring of property outside of the probate process.
A trust is a type of testamentary document, meaning it can take effect upon a person’s death. However, it can also function as a way to transfer property to another party during the trust maker’s life. When this transfer occurs depends upon the specific language of the document.
According to Michigan Estates and Protected Individuals Code § 700.7401, an individual may create a trust by dictating the transfer of property to another upon the trust maker’s death or at any other specific time. Alternatively, a trust maker could declare that another party is holding property as a trustee to create a trust.
Additionally, Section § 700.7402 states a trust is only valid if:
A local trusts attorney at our firm can help create documents that meet the appropriate legal standard and fulfill your specific needs.
Talking with an experienced lawyer at our Lansing office can help you better understand how trusts can be a valuable part of estate planning. The main function of a trust is to transfer property from one party to another. This can be as simple as placing cash under the control of a trustee with instructions that this trustee distributes the money to a beneficiary at a specific date.
Additionally, a trust can help with eligibility for certain government benefits. Meeting the asset requirements for Medicaid when moving into a nursing home is a prime example. If a person places property into an irrevocable trust at least five years before filing for Medicaid benefits, that property is exempt from valuation.
Finally, trusts are an effective way to shorten and simplify the probate process. When a trust is properly funded, the assets in it are no longer a part of the decedent’s probate estate. Consequently, a probate court will have no say over the distribution of this property, and the state’s intestacy laws do not apply to those assets. The beneficiaries are able to receive the property that was placed into the trust without the need for probate court intervention.
Proper estate planning requires an in-depth examination of your assets and goals for the near and long-term future. For many people, creating a trust can be an effective and efficient way to transfer property without the need for probate court or conflict.
If you would like to prepare for the future and protect your loved ones, reach out to a Lansing trusts lawyer to learn the many benefits of these flexible estate planning tools. Call Leydorf Law Firm, PLLC today for a consultation.
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