Creating a Living Trust Michigan

Revocable Living Trust Creating a Living Trust Michigan

Living Trust Michigan

This article will go over everything you need to know about living trusts in the state of Michigan. There are three good incentives to set up your living trust in your state, and we’ll go over them! If the setup costs are what you are worried about, DoNotPay can help you get a standard one for a cheap price! Keep reading!

Living Trusts in Michigan

A living trust is a legally binding document that explains how you'd want your assets managed and distributed beyond your life.

When setting up a living trust, you have the option of choosing a revocable trust or an irrevocable trust. Revocable trusts offer you flexibility with the terms but require you to be personally liable for all tax requirements. With irrevocable trusts, your terms remain unaltered once notarized.

For most people who live in Michigan, asset distribution lies in the hands of either a trust or a will. In reality, you can set up both as they tend to complement each other. However, a living trust can provide additional advantages that make it a better option.

Living Trusts Versus Wills

Here are the major differences between a living trust and a will:

Living trustWill
Helps you avoid probate fees and costs associatedDistribution of assets go through probate court
Guarantees right to privacy for the beneficiariesProvisions are available to the public with no privacy
Becomes active while the grantor is still aliveBecomes active only at the demise of the grantor
More flexibility and control over assetsLess flexibility and control of assets
Requires notarizationDoes not require notarization

Why You Should Set Up a Living Trust in Michigan

Now here are the three reasons why Michigan is a great place to set up your living trust.

No state estate taxes

Michigan is one of the 38 states in the US that do not collect separate estate taxes. This means you and your beneficiaries will have no duty to pay additional state taxes. If your estates in the trust are worth less than $12 million, you also do not have to pay federal estate taxes.

No state inheritance taxes

Setting up your living trust in Michigan means you do not have to worry about state inheritance taxes as well. Your beneficiary would only have to pay the required federal inheritance tax if the inheritance is worth more than $11,180,000.

Low probate costs

People who have less complicated assets (less than $15,000) may choose to ditch a living trust and enjoy the benefit of low probate costs offered in Michigan. This is because Michigan follows the Uniform Probate Code. However, a living trust assures you that there are no complications in the distribution of your asset to your beneficiaries. You would also find the ability to add and remove assets from your trust as an added advantage. 

How to Create a Living Trust in Michigan

The steps to creating a living trust generally remain the same by state. Here are the steps you would take to get your living trust in Michigan:

  • Choose your beneficiaries. Choose who your assets will go to amongst your family, friends, relatives, and IRS-approved institutions. You can have as many beneficiaries as you would like but may only get insurance coverage for five of them.
  • Select a trustee or number of trustees. You will also need to select persons who you believe are capable of executing your demands as stated in your trust. This person or persons will be known as trustee(s).
  • Define assets to be assigned under the trust. Choose which of your current assets will be included in your trust. This can include properties, bank accounts, pets, and more. If you are creating a revocable living trust, then you can add more or remove them later as you please.
  • Obtain a living trust form and create your trust. This can be obtained from a lawyer or online. You can choose to use DoNotPay, which specifically creates living trusts based on your state.
  • Notarize your living trust form in court. For your document to become legally enforceable, it has to be notarized. You can do that at a local court.

Get a Michigan Living Trust from DoNotPay

Ready to start your living trust process? DoNotPay can help you avoid exorbitant legal fees and long processing times. See DoNotPay's easy process below:

  1. Log-in to DoNotPay and click the Revocable Living Trust icon
  2. Provide the state you live in and where you plan on getting your trust notarized
  3. Tell us about your trustees
  4. Name your beneficiaries
  5. Assign the assets to be under the trust

Once you complete these general questions and provide the specifics, DoNotPay will generate your very own revocable trust! This process only takes minutes!

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