Types of Trusts
There are many different types of trust, intended to meet the wishes of the grantor upon his or her death. Different trusts include:
- Marital Trust
- Bypass Trust
- Testamentary Trust
- Irrevocable Life Insurance Trust
- Charitable Lead Trust
- Charitable Remainder Trust
- Generation-Skipping Trust
- Qualified Terminable Interest Property Trust
- Grantor Retained Annuity Trust
Although there are a variety of different kinds of trust, the main distinction is whether they are revocable or irrevocable.
A revocable trust, also referred to as a living trust, gives the settlor (or grantor) the power to terminate or modify the trust at any time. Based upon the settlor’s circumstances or intentions, the revocable trust is flexible and can be subject to revision.
A revocable trust can help avoid probate, however; it is still subject to estate taxes upon the death of the grantor. A revocable trust typically becomes irrevocable upon the time of death.
An irrevocable trust does not give the settlor the power to modify or terminate. Any assets owned by the trust cannot be retrieved by the settlor except as indicated by the trust.
Once a grantor establishes an irrevocable trust, he or she will lose control over assets owned by the trust. Irrevocable trusts can keep assets out of probate and protected from certain estate taxes.
According to Michigan trust law, as of March 31st, 2010, all Michigan trusts are revocable unless otherwise indicated in the trust.
For further information on revocable trusts and irrevocable trusts, contact our offices online or call today at (734) 397-4540 for a professional and free probate lawyer consultation.