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Planning for the Future
Many people interested in estate planning are unsure of the difference between wills and trusts. While both instruments allow you to distribute your assets after death, there are some key differences between the two. Keep reading to learn the differences between wills and trusts in Michigan to make the best decision for you and your family.
Wills
A will is a document that directs how your property will be distributed after you die. You can use a will to:
Name an executor who will oversee the distribution of your property.
Appoint a guardian for your minor children.
Designate beneficiaries for your property, including family members, friends, charities, or organizations.
Trusts
A trust is another way to direct how your assets will be distributed after you die, but with some important differences from wills. Trusts can be revocable or irrevocable. Revocable trusts can be changed at any point during the settlor's lifetime, while irrevocable trusts cannot be changed once they are created. This means that with a trust you can:
Place conditions on how and when assets are distributed.
Avoid probate, which is the legal process of distributing a person's assets after they die.
Reduce or eliminate estate taxes.
Differences Between Wills and Trusts
While wills and trusts both allow you to direct how your assets will be distributed after you die, there are some important differences to consider. These include:
Probate
As mentioned above, one of the main advantages of using a trust is that it can help you avoid probate. With a will, your assets will go through probate after you die. Probate can be time-consuming and expensive, so avoiding it can be a major advantage.
Control
With a will, you have less control over your assets' distribution than with a trust. With a trust, you can place conditions on how and when assets are distributed, which gives you more control over what happens to your assets after you die.
Taxes
Another advantage of using a trust is that it can help you reduce or eliminate estate taxes. With a will, your assets may be subject to estate taxes when you die.
Work with an Estate Planning Attorney
Deciding whether to use a will or a trust is an important decision in Michigan estate planning. If you have questions about wills vs. trusts, or any other aspect of estate planning, contact an experienced Michigan estate planning attorney today.
At Michigan Law Center, PLLC, we help our clients protect their future and their loved ones as we create estate plans together. Learn more about how we can help or schedule a consultation by calling (586) 803-8500 or by visiting our website.