There are many types of trust documents, tailored by the estate planning lawyer to fit the client’s needs. For example, a married couple with a net worth of less then two million dollars will implement a very different trust document than a single person with a net worth of less then $500,000. Experienced estate planning attorneys can customize the provisions of your trust.
Trusts can be revocable or irrevocable. It is important to know that even revocable trusts become irrevocable upon the occurrence of certain triggering events, such as the death of a settlor or a grantor.
Trusts are flexible instruments governed by special provisions contained in the 2010 Michigan Trust Code. A trust is basically a contract between the settlor -the person making the trust- and the trustee. This contract governs the powers and duties of the trustee. In a typical estate plan, the settlors and the initial trustees are one and the same. It is only when a settlor dies that the trust provisions kick into gear. Until then, the settlor is free to make amendments to the trust instrument and to manage trust assets and spend trust funds within his or her discretion.
Serving as a trustee is an important responsibility. A trustee is charged with knowing the provisions of the Michigan Trust Code. In addition, the trustee must also be familiar with the character and identity of beneficiaries, with the powers and duties granted to the trustee, and with any limitations set forth in the trust instrument.
The best way to prosecute a trustee’s duties is for the trustee to be proactive toward those duties and to stay on top of all events that affect the trust assets and the designated beneficiaries of the trust. Many trustees find it helpful, even necessary, to hire an attorney that specializes in trust administration.
If you are nominated or are currently serving as a trustee, if you and your spouse are interested in creating an estate plan, or if you are a single individual looking to consider your testamentary options relative to a testamentary trust, contact our law firm to schedule a free consultation.