Avoiding probate and providing privacy for loved ones is often the catalyst behind the Michigan resident's decision to establish a living trust. Yet, in many instances, the individual creates the living trust but, through a series of errors and omissions, does not realize the intended goal. Although the living trust has been established as a part of the estate planning process, the individual still has steps that must be taken in order to make it effective.
The first step to be taken once the trust has been created is to fund the trust. This means that assets must actually be transferred into the trust. In other words, titles to real property need to changed and properly filed. Additionally, if vehicles are involved, the titles to the vehicles need to show the trust as the owner. These new titles will also need to be properly filed with the state.
In addition to assets in which titles are involved, financial accounts intended to become a part of the trust will need to be addressed. The trust will need to be noted as the owner of all accounts involved. This can typically be done by filing a form with each financial institution.
Once the trustee has funded the trust, he or she will want to identify a successor trustee. This is the individual who will manage the trust once the current trustee is no longer able to do so. Additionally, the individual named will need to be made aware of and agree to this and be provided details regarding the trust. An experienced estate planning attorney can assist the Michigan resident in making sure that the appropriate steps are taken and the living trust is utilized to its full potential.
Source: Forbes, "7 Big Estate Planning Mistakes", Bob Carlson, Feb. 28, 2018