“Your Living Trust After A Divorce”
YOUR LIVING TRUST AFTER A DIVORCE
Once a divorce is complete, it is wise of the divorced party to consider some aspects of estate planning. An area where people sometimes have some confusion is the answer to the question, “Do I need a Will or a Trust?” There are pros and cons to either a Will or a Trust, but the following is a brief explanation of the main differences between these two estate plan vehicles. A Will can be a useful document that allows you to appoint a Personal Representative, name beneficiaries under your estate, suggest appropriate guardians or conservators for your minor children, and so forth. That being said, there are some significant “down sides” to a simple Last Will and Testament being your entire estate plan.
One of the major pitfalls is that to process a Will, one generally must file a probate estate which means going to the probate court. In probate court there is generally some legal process where a Judge determines whether or not the Will is valid, and other issues may be determined. This probate proceeding will also produce the necessary documents required for your Personal Representative to administer your estate. In Michigan there is generally some considerable expense in probating an estate which must be done if the main vehicle for planning is a simple Will. An additional consideration is that when a Will is probated through the courts it becomes public information. Everything filed with the court is open to public view to anyone interested/nosey enough to want to look at the court’s file. In addition to paying court and attorney fees, the information contained in your Will becomes part of the public record open to anyone who is interested.
An important alternative, or companion to a Will, is a Trust. It is a common misconception that in order to have a Trust, one must be wealthy. Actually, a Trust can be a very useful tool to make sure you are leaving your family a legacy and not a mess. It may cost a bit more “up front” to prepare with the help of counsel. A significant amount of money would, ultimately, be saved by avoiding probate. Like a Will, a Trust allows you to name beneficiaries of your estate, but unlike a Will, you are able to keep everything private and also include various restrictions and instructions to your Trustee as to how you want to distribute your property to your beneficiaries. If a Trust is properly funded, as our estate planning attorneys would certainly recommend, advise and assist you with, then your family and your Trustee would not have to go to court for any purpose.
In addition to avoiding probate court at your death a Trust will allow your Trustee to function in your absence, should you become incapacitated, either physically and/or mentally. Instead of having to go to court to have a court appointed guardian or conservator, you may be able to add provisions to insure your mental capacity is determined outside of the court. You would also have greater control to make this a smooth process for your loved ones. Because of this, you should consider a Trust based estate plan.
For more thorough information and advice the divorce and estate planning attorneys at Damon, Ver Merris, Boyko & Witte, PLC are experienced in assisting divorcing parties who wish to engage in some form of estate planning at the conclusion of their matter. If you have any questions regarding this aspect of the aftermath of your divorce process, or if you wish to have post-divorce discussions of continuing issues, please do not hesitate to contact the law firm of Damon, Ver Merris, Boyko & Witte, PLC, at (616) 975-9951 to speak to one of our Grand Rapids divorce or estate planning attorneys.
We are here to help. – Curtis R. Witte / May 3, 2019
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