The typical Michigan resident spends his or her life working, raising a family and planning for the future. As one ages, thoughts of how assets should be distributed upon death come to mind. For some families, giving part of the inheritance to beneficiaries prior to one's death makes sense. However, for estate planning as well as other legal purposes, one may want to reconsider that option.
Rather than simply giving assets away, placing them in a trust may be a better choice. If assets are simply transferred to one's child, or other individual, it is possible that these assets could be at risk if the recipient becomes the target of collection efforts. If the assets are placed into a trust and managed by a third party trustee, they will most likely be exempt from such proceedings.
Additionally, marriages end every day. Although the recipient marriage may appear to be stable, it may not always be that way. If an inheritance is commingled with other marital assets, it can be considered to be a marital asset too. This would then make it part of the property division process if the couple decide to divorce. Again, a trust can help to protect the inheritance for the intended individual.
Estate planning is something that the average Michigan resident would prefer to avoid. However, with proper planning and forethought, loved ones can be protected and cared for through the manner in which their inheritance is received. Experienced legal counsel can help analyze the individual's financial picture and offer guidance as to how to structure the estate to minimize problems and protect assets.
Source: Forbes, "Don't Just Sign Over Your Assets to Your Kids", Mark Eghrari, Oct. 2, 2017