A revocable living trust is an estate planning tool that lets you transfer assets to a trustee. You can serve as your own trustee, allowing you to keep control over the assets during your lifetime. Upon your death, a successor trustee (that you previously named) assumes control of the trust and distributes its assets according to your instructions.

Many married couples in Michigan find it useful to create a joint revocable living trust. These are informally called “sweetheart trusts,” because they are designed to maximize the surviving spouse’s control over the trust’s assets after the other spouse passes away. But sweetheart trusts may not be appropriate for every estate planning situation.

How Sweetheart Trusts Work

Sweetheart trusts are a type of revocable trust. The spouses typically serve as co-trustees. Either spouse can contribute assets to the trust during their lifetimes. Since the trust is revocable, each spouse can also remove some or all of their assets from the trust.

When the first spouse dies, the surviving spouse continues as sole trustee. The trust remains revocable, so the survivor is free to change the terms of the trust or even revoke it. The deceased spouse has, in effect, made an unconditional legal gift of his or her share of the trust assets to the survivor.

Advantages and Disadvantages of a Sweetheart Trust

Once it is established, a sweetheart trust is relatively easy to administer. Assets placed in a trust do not pass through probate. So the surviving spouse can continue to use and enjoy the trust assets without disruption.

On the other hand, the first spouse to die loses control over the ultimate disposition of the trust’s assets. For example, let’s say a husband and wife each have adult children from prior marriages. The wife dies first. She wanted to leave part of the trust to her children. But after her death, the husband amends the trust to leave everything to his children. The wife’s children have no recourse, because under a sweetheart trust, the husband is free to alter the trust as he wishes.

Need Help Making a Michigan Trust?

There are other legal and tax considerations you should consider before making a sweetheart trust. A qualified family trust attorney can help explain your options and figure out the best approach for you and your family. Contact Carrier Law to schedule an appointment with one of our family trust lawyers today.

A common question every estate planning lawyer gets is, “How much do you charge for a will?” There is no single answer. A will is not a standardized product. Each will has unique characteristics based on a person’s financial, family, and legal situation.

Estate Planning Is Not Always So Simple

Speaking in broad terms, estate planning attorneys generally offer simple wills on a flat-fee basis, usually between $500 and $1500 dollars, depending on circumstances such as marital status and property. What do we mean by a “simple will”? A simple will is guidance or advice to the Probate Court directing where you want your assets to go after you’ve died. If you own assets over the minimum level of $22,000 in your own name at the time of your death, your estate will go to probate. The will is a part of that probate process.

But now let’s say you have a lot of assets and multiple heirs. You may need to minimize your potential gift and estate tax liability. A simple will may not be the best tool for the job. In fact, you may want to create a trust or employ other strategies, such as charitable giving, which require more than a boilerplate will. This obviously requires more time and skill on the part of the attorney, which translates into a higher flat fee, or in some cases an hourly billing arrangement.

Keep in mind, your estate planning situation may be more complicated than you initially think. If you are divorced and remarried, your will may need to account for children from different marriages, as well as the terms of your divorce settlement. You may also want to consider the relative financial and personal circumstances of your children or other beneficiaries.

Do Not Do It Yourself

Some people think they can save a few dollars by writing their own will using a preprinted form they buy online or at the office supplies store. This is a bad idea. For one thing, laws governing wills and probate are state-specific. A preprinted form is unlikely to fully incorporate Michigan law. Second, preprinted forms often omit important clauses that can actually undermine the intention of the person making the will. This can lead to confusion and unnecessary litigation after the person dies.

Working with a Portage elder law attorney is never a waste of money. To the contrary, it may be one of the best investments you can make to secure your family’s future. Contact the Law Offices of David L. Carrier, P.C., today to schedule a consultation with an attorney who will help you develop a will specifically tailored to your needs.

An executor, or personal representative, carries out the terms and provisions of a deceased person’s will. Typically, the creator of the will (also known as the testator) will name an executor who is responsible for closing out the testator’s estate, which means taking care of any remaining financial obligations and ensuring that beneficiaries named in the will receive their assets.

If the testator does not name an executor, Michigan law specifies, in order of priority, who will be appointed as the testator’s personal representative. The surviving spouse has first priority, but only if he or she is a named beneficiary.

It’s important to name an executor who you trust, like a friend or family member, to ensure that your estate is properly taken care of.

Who May Serve As Executor?

Michigan permits any adult to serve as an executor — except someone who has been convicted of a felony — including adults who live in another state. (Practically, however, it might not be a good idea to name an out-of-state executor.) An adult is anyone who is at least 18 years old. The court is required to appoint your named executor unless someone challenges your selection and presents evidence that the person is incompetent or otherwise unsuitable to serve.

What Are the Executor’s Responsibilities?

The executor’s legal responsibilities include:

• Initiating probate of the will;
• Collecting the testator’s assets and taking an inventory;
• Collecting any debts owed to the testator’s estate;
• Paying any debts claimed against the estate;
• Distributing assets among named beneficiaries; and
• Closing the estate.

Initiating Probate

It’s the executor’s responsibility to open the estate for probate. That involves obtaining a valid death certificate and an original copy of the will, and providing notice to creditors and any other interested parties.

If the executor is not an attorney, he or she should contact an experienced probate attorney to help with the process.

Taking an Inventory of the Testator’s Assets

The executor has to know what the testator owned before he or she can properly distribute the estate. This might involve having items (like jewelry or cars) appraised.

Collecting the Testator’s Debts

One of the first things the executor should do is make sure the testator received all of the salary and benefits owed to him or her. The testator should all inquire into any outstanding debts owed to the estate.

Paying the Testator’s Debts

While some debts die with you, others survive death. For example, the executor must use the estate’s assets to pay any state or federal taxes that the testator might owe.

Distributing Assets

When any creditor claims against the estate have been settled, the executor may distribute assets to beneficiaries named in the will. (This is when the executor may encounter a will contest from someone who claims that he or she should have inherited under the will if not for undue influence, fraud, etc.)

Closing the Estate

Once the claims have been settled and the assets distributed, the estate can be closed. The executor must provide the probate court with evidence that everything has been taken care of.

Contact a Grand Rapids Estate Planning Attorney

If you have been named as the executor of a will, contact one of our experienced Holland probate lawyers today. We can guide you through the probate process. If you are preparing your will, we can also help you choose someone to serve as executor.

Estate planning is an individual process — what works for one person might not be the best option for distributing your assets. For example, you don’t have to create a will in order to dispose of your assets after death. Another option is creating a trust (however, you can also include a trust in a will).

What Is a Trust?

A trust is a legal arrangement in which one person (the trustee) holds legal title to property for another person (the beneficiary). The person who creates the trust is called the grantor or settlor.

One of the benefits of creating a trust is that the settlor has multiple options:

• A revocable trust allows the settlor to alter or even cancel trust provisions during his or her lifetime.
• Trust property isn’t transferred to the beneficiary until after the settlor’s death.
• Irrevocable trusts come in many forms. There is a common misconception that an irrevocable trust cannot be amended or cancelled without the beneficiaries consent, but that is not always true. It depends on the exact type of irrevocable trust that you have.
• A living trust (also called an inter vivos trust) benefits the settlor during his or her lifetime and then transfers assets to a designated beneficiary when the settlor dies. Property put into a living trust is not subject to probate.
• A testamentary trust does not go into effect until the settlor dies. It is included in the settlor’s will and often is used to benefit minors.

These options might seem confusing, which is why you should contact an experienced estate planning attorney to determine which type of trust is right for you.

Creating a Valid Trust

Your trust will fail if you don’t follow certain requirements:

1. The settlor has to intend to create a trust. If the wording in the trust is ambiguous and doesn’t establish that the settlor intends to convey his or her property into the trust for the named beneficiary, then the trust will fail. It’s not enough to say that the settlor will create a trust in the future — the settlor must intend to create the trust now.
2. The settlor must appoint a qualified trustee. A trust cannot exist without a trustee.
3. If the settlor doesn’t actually transfer assets into the trust, then the trust will fail. The settlor must list the assets in the trust and take steps to change the title of those assets.
4. The trust will fail if it doesn’t specifically identify the intended beneficiaries. If the beneficiaries can’t be identified or located, then the trust is not valid.

Luckily, there are ways to correct a failed trust. If it is proven by clear and convincing evidence that the settlor’s intent and the terms of the trust were affected by a mistake of fact or law, then a court may reform the terms of the trust.
You can also ask an estate planning attorney to help you modify or terminate your original trust so that it fully complies with Michigan law and properly distributes your assets.

Contact Us Today

Of course, the best way to ensure that your trust doesn’t fail is to seek professional help. Our experienced Michigan family trust attorneys can you help you create a valid, enduring trust. Contact us today for a free consultation.