Rochester Hills Estate Planning Lawyers

Understanding Trusts and Trustees

Trusts are similar to wills in that they deal with a person’s assets and their distribution. Under the Michigan Trust Code (MTC), the capacity required to create or amend a revocable trust is the same as that required to make a will. Note that unless the terms of a trust expressly provide that the trust is irrevocable, the settlor may revoke or amend the trust at any time.

The trustee is the person who holds legal title to property for the beneficiary, and the person who creates the trust is usually called a grantor or settlor. A trustee may be responsible for:

• locating, safeguarding, and inventorying all trust assets, including real estate; personal property, like household items; securities, such as stocks and bonds; bank accounts; life insurance policies; and retirement, profit-sharing, and deferred compensation accounts;
• paying debts, expenses, and costs, as well as settling creditors’ claims;
• keeping records of all transactions and disbursements;
• communicating with and reporting to beneficiaries;
• administering the trust, which may include investing assets;
• distributing assets in accordance with the trust terms.

Michigan also imposes other specific responsibilities like loyalty, impartiality when there is more than one beneficiary, care and prudence in administration, and separation of the trust assets from the trustee’s own assets. Note that a trust document may contain provisions for removing trustees if there has been any violation of a duty owed to beneficiaries, constituting a breach of trust. To learn more about what might happen in such an event, refer to our page on Trusts.

Powers of Attorney

A power of attorney grants an agent the authority to manage a person’s financial affairs. An agent can be any adult or a bank that the person trusts, and an agent can perform a range of duties like signing the individual’s checks, paying their bills, contracting medical services for them, or selling their property. A person can give their agent authority to do anything they could do, or they can limit the agent's authority to only certain things like selling their home. The agent must follow all the person’s instructions and act in their best interest.

Note that a power of attorney is either durable or non-durable, where a durable power of attorney remains in effect when a person is unable to make their own financial decision, and a non-durable power of attorney terminates the moment the principal becomes disabled or incapacitated. However, keep in mind that in both scenarios, the agency relationship is not revoked or terminated until the attorney-in-fact has actual knowledge of the principal’s death.

Contact Us Today

If you are facing estate planning matters, consult an experienced attorney today for legal guidance. Whether you have questions about wills, trusts, or powers of attorney, our team at Little & Boylan PLLC can help. It is best to work with an experienced legal professional on estate-related matters, as they deal with important private assets.

To discuss your estate planning needs, call (248) 809-1402 or reach out online for a free consultation today!