Probate Administration and Trust Administration
Probate administration is the process of transferring the assets of an estate to its legal heirs (intestate) or the persons designated in their Last Will and Testament (testate). In Michigan, all Wills are subject to the probate process. Zolton Law can assist you by acting as your personal representative of the probate administration and can minimize the costs, attorney fees and time.
Trust administration is a process similar to probate administration with the major difference being that the court is not involved in overseeing or monitoring the administration. This difference can reduce costs substantially, benefiting the beneficiaries of the trust. Trusts must have been prepared prior to death in order to be used. There are many different kinds of trusts in our estate planning toolbox. Depending on your needs, trusts can give you greater control of the disposition of your assets, provide substantial tax benefits, may protect your assets from the reach of your heirs' creditors, and very importantly, are not subject to probate in Michigan.
Common Probate and Trust Terms
Testator or Testatrix – A person who makes a last will and testament.
Trustee - The person in charge of managing and distributing the trust’s assets and paying the trust’s debts is called the Trustee. A potential trustee must accept that position, which is typically accomplished by signing a document called an Acceptance of Trust. As soon as the appointed trustee accepts the appointment, he or she will act as the fiduciary of the trust and must manage the trust’s assets and affairs as required by the trust agreement and applicable law.
Intestate - When one dies without a will, they are considered to be intestate. The laws of intestacy dictate how your property will be distributed when you die, if you do not have a will. Thus, if you die without a will, you will not have a say in how your property is distributed.
Power of Attorney - A power of attorney is a legal document signed by a person giving another person the power to act in conducting the signer’s business, including signing papers, checks, title documents, contracts, handling bank accounts and other activities in the name of the person granting the power. There are different types of powers of attorney, including limited and general.
Revocable Living Trusts – These are what most people use in their estate planning. These trusts can be changed or terminated at any time during the life of the person who made the trust. The assets in the trust can be used in any way the trust maker sees fit. For tax and other purposes, a trust maker and his or her trust are treated as one and the same during the trust maker’s lifetime. At the death of the trust maker (or the last surviving trust maker if there are more than one), even a revocable trust becomes irrevocable. The trust also becomes essentially irrevocable if the trust maker becomes incapacitated, as well.
Irrevocable Trusts – The terms of these trust agreements cannot be changed, including the beneficiaries and distributions or how successor trustees are selected. A court might allow certain modifications under special circumstances, but generally an irrevocable trust must be governed by the agreement that is in place at the time it is established or becomes irrevocable.
Totten Trust – A bank account where a person’s own money is deposited in his or her own name as the fiduciary for another person.
To learn more about your need for a trust, schedule a free consultation.