Can create a funny graphic and plan my estate, but can't spell....Image generated by Gemini Pro 2.5.

I Hired Two Attorneys for Estate Planning, Then Asked Gemini

Disclaimer: this post was largely created with information researched by Gemini Pro, and should not necessarily replace the advice of a licensed attorney... unless you can't find a licensed attorney who knows what they're doing....

The Gemini Pro Estate Planning Checklist

Simple Checklist: Will, Trust, and Property Deed

This checklist assumes you are creating a common estate planning tool: a Revocable Living Trust.

Part 1: Creating Your Will

A will is essential even when you have a trust. It acts as a backup, covering any assets accidentally left out of the trust and allows you to name guardians for minor children.

[ ] List Your Assets and Debts: Create a comprehensive inventory of everything you own (real estate, bank accounts, investments, personal property) and everything you owe (mortgages, loans, credit cards).

[ ] Choose Your Beneficiaries: Decide who you want to inherit your property.

[ ] Nominate an Executor: This person will be responsible for carrying out your will's instructions, paying off debts, and distributing assets. Choose a trustworthy and capable alternate as well.

[ ] Nominate Guardians for Minor Children: If you have children under 18, this is arguably the most critical function of a will.

[ ] Draft the Will: Work with an attorney to draft the document to ensure it is legally sound and meets your state's requirements.

[ ] Sign and Witness the Will: Execute the will according to your state's laws. This typically requires you to sign it in the presence of two disinterested witnesses (people who are not inheriting anything from you).

[ ] Store It Safely: Keep the original signed document in a safe place (like a fireproof safe or with your attorney) and inform your executor where to find it.

Part 2: Creating Your Revocable Living Trust

The primary purpose of a living trust is to hold your assets so they can avoid the costly and time-consuming court process of probate.

[ ] Choose Your Trustee and Successor Trustee: As the creator (grantor), you will likely be the initial trustee, managing the assets for your own benefit. You must name a successor trustee to take over upon your death or incapacitation.

[ ] List Beneficiaries of the Trust: These are the people or organizations who will receive the trust assets after you pass away.

[ ] Draft the Trust Agreement: This is a detailed legal document that outlines the rules of the trust. Using an attorney for this step is strongly recommended due to its complexity.

[ ] Sign and Notarize the Trust Document: Unlike a will, a trust document must be signed in the presence of a notary public.

[ ] Fund the Trust: This is the most important step. A trust is an empty container until you transfer assets into it. This is done by changing the title of your assets from your individual name to the name of the trust.

Part 3: Deeding Your Rental Property to the Trust

This is a key part of "funding the trust."

[ ] Locate the Current Deed: Find the original deed for your rental property.

[ ] Prepare a New Deed: Your attorney will prepare a new deed (often a Quitclaim Deed or Warranty Deed) to transfer the property from you, the individual, to you as the trustee of your trust. The new owner will be listed as, for example: "Jane Smith, Trustee of the Jane Smith Revocable Trust dated August 4, 2025."

[ ] Sign and Notarize the New Deed: You must sign the new deed in front of a notary public.

[ ] Record the Deed: The new deed must be filed with the County Register of Deeds or County Clerk's office in the county where the rental property is located. There will be a small recording fee.

[ ] Notify Necessary Parties: Inform your mortgage lender (if any) and your property insurance company of the change in title to ensure your mortgage and coverage remain valid.

Which Assets to Include vs. Exclude from a Trust

The primary goal is to title assets in the trust's name to avoid probate. However, some assets have more efficient ways of transferring upon death.

Assets Typically INCLUDED in a Trust

Real Estate (Personal Home, Rental Properties):

Why: Real estate is a primary reason to have a trust. Putting it in a trust avoids probate, which can be particularly long and expensive for property. It also allows your successor trustee to manage or sell the property without court approval if you become incapacitated.

How: By preparing and recording a new deed, as described in the checklist above.

Bank Accounts (Checking, Savings, Money Market):

Why: To give your successor trustee immediate access to cash to pay your final expenses without having to wait for a court order.

How: By going to the bank and changing the account title to the name of the trust.

Non-Retirement Investment Accounts (Brokerage accounts, mutual funds):

Why: Same as bank accounts. It avoids probate and allows for seamless management by the successor trustee.

How: Contact the financial institution and complete their paperwork to re-title the account in the name of the trust.

Business Interests (LLC Membership, S-Corp Shares):

Why: To create a clear succession plan and avoid disruption to the business upon your death or incapacitation.

How: By formally assigning your interest to the trust according to your business's operating or shareholder agreement.

Assets Often EXCLUDED from a Trust (or Handled Differently)

Retirement Accounts (401(k), IRA, 403(b), etc.):

Why Exclude: These accounts are designed to pass outside of probate through beneficiary designations. Naming your trust as the beneficiary can have serious negative tax consequences, potentially eliminating the ability of your heirs to "stretch" the distributions over their lifetimes and forcing a much faster, more heavily taxed withdrawal.

What to Do Instead: Name individuals (e.g., your spouse, then children) as the primary and contingent beneficiaries directly on the form provided by the account custodian. This beneficiary designation form overrides your will and trust. Review these forms every few years.

Life Insurance Policies:

Why Exclude: Like retirement accounts, life insurance proceeds pass to the named beneficiary outside of probate and are generally income-tax-free.

What to Do Instead: Name your beneficiaries directly on the policy. You can name the trust as a beneficiary, which can be useful if you want the funds managed for a minor child or a spendthrift heir, but for most people, naming individuals is simpler.

Vehicles (Cars, Boats, RVs):

Why Exclude: Titling a car in a trust can be a hassle (insurance, financing). More importantly, many states (including Michigan) have a simplified, probate-free procedure for transferring a vehicle title upon death by presenting a death certificate at the DMV/Secretary of State.

What to Do Instead: Rely on your state's simplified transfer process. For high-value collector cars, you might consider the trust, but for daily drivers, it's often not worth the effort.

Health Savings Accounts (HSA) & Medical Savings Accounts (MSA):

Why Exclude: These function like retirement accounts and have their own beneficiary designation forms that allow them to bypass probate.

What to Do Instead: Designate a beneficiary (typically a spouse) directly on the account paperwork.

By carefully considering which assets to place in your trust, you can maximize its effectiveness in avoiding probate while using more efficient tools like beneficiary designations where appropriate. Again, please consult an attorney to create a plan that works best for you.

--

Tell me what you think. Any edits, criticisms or suggestions for using AI tools for more detailed advice? I asked the Pro tool to conduct research and analysic on this topic and create a research report for me. Here is what it came up with in more detail.

Gemini Pro Estate Planning Research Report Including Cited Sources

An Expert Report on Estate Planning in Michigan: A Comprehensive Guide to Wills, Revocable Living Trusts, and Asset Management Part I: The Foundational Components of Your Michigan Estate Plan Section 1.1: Introduction to Estate Planning Principles

A comprehensive estate plan is a foundational element of sound financial management and personal preparedness. Its primary objectives extend far beyond the simple distribution of assets upon death. A well-structured plan is a proactive risk management strategy designed to control the disposition of property, provide for the financial security of family members, plan for the possibility of one's own physical or mental incapacity, and significantly minimize the legal costs, administrative burdens, and public exposure associated with the court-supervised probate process.  

The core purpose of estate planning is to navigate future uncertainties with a clear, legally enforceable set of instructions. In the absence of such planning, state law dictates the distribution of assets, and courts must intervene to oversee the process, often leading to outcomes that diverge from the deceased's intentions. This court intervention, whether through probate for an estate or a conservatorship for an incapacitated individual, invariably introduces significant delays, substantial costs, a loss of family privacy, and a forfeiture of personal control. A thoughtfully constructed estate plan, utilizing a coordinated set of legal tools, interrupts this default sequence, ensuring that an individual's wishes are executed efficiently and privately. This report will provide a detailed analysis of these tools, with a specific focus on Michigan law, to serve as a guide for creating a robust and effective estate plan.  

Section 1.2: The Last Will and Testament: Your Essential Instructions

The Last Will and Testament is the most widely recognized estate planning document. It is a legally binding instrument that directs the distribution of your assets after death. While its role can be supplemented or, in some cases, superseded by other tools like a living trust, it remains an indispensable component of nearly every comprehensive estate plan.

Checklist: Creating a Michigan Will

The process of creating a legally valid will in Michigan involves several key decisions and actions.  

Inventory Your Property: The first step is to create a comprehensive list of all assets and liabilities. This includes tangible property (real estate, vehicles, jewelry, art) and intangible property (bank accounts, stocks, bonds, mutual funds, life insurance policies, retirement accounts, business ownership interests). It is also crucial to list any outstanding debts, as Michigan law requires that unsecured debts like credit card balances and medical bills be paid from the estate before assets are distributed to heirs.   Choose Beneficiaries: Beneficiaries are the individuals, organizations, or charities you designate to inherit your property. It is essential to identify them by their full legal names to avoid ambiguity. For sentimental items with significant emotional value, such as family heirlooms, specific designations are critical to prevent disputes among loved ones.   Choose a Personal Representative (Executor): The personal representative is the individual or institution you nominate to administer your estate. Their duties are extensive and include notifying beneficiaries and creditors, inventorying and safeguarding assets, paying final debts and taxes, and ultimately distributing the property according to the will's instructions. This role demands trustworthiness, organization, and diligence. It is wise to name a successor personal representative in case your first choice is unable or unwilling to serve. While family members are common choices, one can also name an attorney, accountant, or financial institution, though their fees should be understood in advance.   Choose a Guardian for Minor Children: For parents of minor children, this is arguably the most critical function of a will. The guardian is the person you choose to have physical custody of and raise your children if you pass away. This decision should be based on factors such as the potential guardian's physical and emotional capacity, their relationship with your children, and whether their values align with your own.   Choose a Manager for Children's Property (Trustee): Separate from the guardian of the person, you must name someone to manage any assets your minor children inherit. This person, often called a trustee, has a fiduciary duty to manage the inheritance responsibly for the child's benefit until they reach the age of majority or another age you specify. The guardian and the trustee can be the same person, but they do not have to be. For example, one might choose a close relative as guardian and a sibling with financial expertise as the trustee.   Draft and Execute the Will: The will must be a written document. To be legally valid in Michigan, it must be signed by the testator (the person making the will) in the presence of two competent witnesses. These witnesses must also sign the will. It is a standard and recommended practice for witnesses to be "disinterested," meaning they are not beneficiaries of the will, to prevent any future challenges to its validity.   The Pour-Over Will: The Indispensable Safety Net

For an individual who creates a living trust, the function of the will evolves. It does not become obsolete; rather, it transforms into a "pour-over will," which acts as a vital safety net for the entire estate plan. A common and significant error in estate planning is the failure to properly transfer all assets into the trust, a process known as "funding". An individual might acquire new property after creating the trust or simply overlook an existing asset.  

Without a pour-over will, any asset left outside the trust at the time of death would be subject to the state's intestacy laws and would have to pass through the public, costly, and time-consuming probate process, thereby defeating one of the primary benefits of having created the trust in the first place. A pour-over will prevents this scenario. Its sole purpose is to "catch" any such forgotten assets and direct, or "pour," them into the living trust upon your death. Once transferred to the trust, these assets are then managed and distributed according to the detailed instructions you have already laid out in the trust document.  

Furthermore, a living trust cannot be used to name a guardian for minor children. This essential task can only be accomplished through a will. Therefore, even with a meticulously funded trust, a pour-over will remains a non-negotiable component for any parent with minor children.  

Section 1.3: The Revocable Living Trust: The Engine of Your Estate Plan

A revocable living trust is a more dynamic and flexible estate planning tool than a will. It is a legal entity you create during your lifetime to hold your assets. By transferring ownership of your assets to the trust, you can achieve several key objectives, most notably the avoidance of probate and the private management of your affairs.

Checklist: Creating a Michigan Revocable Living Trust

The creation and implementation of a revocable living trust is a multi-stage process that requires careful attention to detail.  

Choose Trust Type: An unmarried individual will create an individual trust. A married couple can choose to create two individual trusts or a single joint trust to hold their shared property.   Inventory Assets for Inclusion: Similar to creating a will, you must compile a detailed list of your assets to determine which will be transferred, or "funded," into the trust.   Choose a Trustee and Successor Trustee: The trust is defined by the legal relationship between the grantor, the trustee, and the beneficiary. The grantor (also called the settlor) is the person who creates the trust. The  

trustee is the person or institution that holds legal title to the trust assets and manages them according to the trust's terms. In a revocable living trust, it is standard for you, the grantor, to also name yourself as the initial trustee. This allows you to retain complete control over your assets during your lifetime—you can buy, sell, mortgage, or gift them just as you did before. The critical appointment is that of the  

successor trustee. This is the person or institution that will take over management of the trust upon your death or if you become incapacitated. The successor trustee has a strict fiduciary duty under Michigan's Estates and Protected Individuals Code (EPIC) to act in the best interests of the beneficiaries and follow your instructions precisely. This is not merely a ceremonial title; it is a position of significant legal power and responsibility.  

Choose Beneficiaries: These are the individuals or entities who will ultimately receive the assets from the trust. A significant advantage of a trust is the ability to control the timing and manner of distributions, such as holding assets for a child until they graduate from college or reach a specific age of maturity.   Draft the Trust Document: The trust agreement is a detailed legal document outlining all of its terms. While online services and templates exist, the complexity of a trust and the importance of aligning it with your specific goals make professional legal assistance highly advisable, particularly for those with significant or complex assets. Sales agents who are not attorneys should not be relied upon for legal advice regarding the suitability of a trust.   Execute the Trust Document: Once the document is prepared, it must be formally executed. In Michigan, this requires the grantor to sign the trust agreement in the presence of a notary public, who will then notarize the signature to validate the document's legality and enforceability.   Fund the Trust: This is the most crucial and often overlooked step. A trust only controls the assets that are legally titled in its name. The process of retitling your real estate, bank accounts, and other property into the name of the trust is called "funding." An unfunded trust is effectively a useless document. This critical process is detailed in Part II of this report.  

Section 1.4: Will vs. Trust: A Comparative Analysis

Choosing between a will and a trust as the primary vehicle for an estate plan involves weighing their respective advantages and disadvantages across several key areas.

Probate Avoidance: This is the most significant distinction. Assets passed through a will are subject to the probate process, a court-supervised procedure for validating the will and distributing the estate. This process is mandatory. A properly funded living trust, by contrast, completely avoids probate for the assets it holds. The successor trustee can manage and distribute assets privately and without court oversight.   Privacy: Because probate is a court proceeding, the will and a detailed inventory of the estate's assets become public record, accessible to anyone. This can expose the family's financial affairs to public scrutiny. A trust is a private document, and its contents and the distribution of its assets remain confidential among the trustee and beneficiaries.   Incapacity Planning: A will is only effective upon death. It provides no mechanism for managing your finances if you become incapacitated by illness or injury. In such a case, your family would likely have to petition a court to establish a conservatorship, another public and potentially costly legal proceeding. A living trust provides seamless protection. If you become incapacitated, the successor trustee you named can immediately step in to manage the trust's assets on your behalf, avoiding any need for court intervention.   Cost and Complexity: A will is generally simpler and less expensive to create upfront. A living trust is a more complex legal document and is therefore more costly to draft. Furthermore, the process of funding a trust requires additional time, effort, and potential fees for retitling assets. However, this higher upfront cost should be viewed as an investment. The legal fees, executor fees, inventory fees, and other costs associated with probate can be substantial, often far exceeding the initial cost of creating and funding a trust. By investing in a trust upfront, you are effectively pre-paying to avoid much larger, more stressful, and time-consuming expenses for your beneficiaries later.  

Control Over Distributions: A trust offers far greater control over the long-term distribution of assets. A trustee can be instructed to manage assets for beneficiaries for many years, making distributions contingent on certain milestones (e.g., age, education) or providing ongoing support for a special needs child. This level of sophisticated, long-term control is a hallmark of trust planning and is difficult to replicate with a simple will.   Part II: Funding Your Trust: The Critical Step of Transferring Assets Section 2.1: The Principle of "Funding": Bringing Your Trust to Life

The creation of a trust document, signed and notarized, is only the first step. For a revocable living trust to fulfill its purpose, it must be "funded." This principle cannot be overstated: an unfunded or partially funded trust is one of the most common and serious failures in estate planning, rendering the document partially or entirely ineffective.  

Funding is the process of legally transferring ownership of your assets from your individual name to the name of the trust. For example, a bank account titled to "Jane Doe" would be retitled to "Jane Doe, Trustee of the Jane Doe Revocable Living Trust". While you, as the grantor and initial trustee, retain complete and absolute control to manage, use, and sell these assets just as before, this formal change in legal title is the mechanism that removes the assets from your personal estate for probate purposes. When you pass away, you do not personally "own" the funded assets; the trust does. Therefore, there is nothing for the probate court to administer.  

The simple checklist model for creating a trust often lists "transfer property" as the final step, which can psychologically diminish its perceived importance. This is a dangerous misconception. Funding is not an administrative afterthought; it is the active, ongoing process that makes the entire structure work. Failure to complete this step means that upon your death, the unfunded assets will not be governed by the trust's terms and will instead be forced into the probate process, negating the primary benefits of privacy, efficiency, and cost savings that led you to create the trust in the first place.  

Section 2.2: Transferring Your Rental Property into the Trust

Transferring real estate, such as a rental property, into a revocable living trust is a formal process that requires the execution and recording of a new deed. The following steps outline the procedure in Michigan.

Gather Essential Documents: Before preparing the new deed, you must have two key documents on hand: the most recent recorded deed for the property (to ensure you have the correct legal description and current title information) and a copy of your executed trust document (to ensure the exact legal name of the trust and the trustee(s) are correctly stated on the new deed).   Choose and Prepare the New Deed: The next step is to prepare a new deed that transfers the property from you as an individual (the "grantor") to you as the trustee of your trust (the "grantee"). The choice of deed type is a strategic one.

Execute and Notarize the Deed: As the grantor, you must sign the new deed in the presence of a notary public.

Record the Deed: The fully executed and notarized deed must be filed with the Register of Deeds in the Michigan county where the rental property is located. This recording makes the transfer of ownership a matter of public record.

Address Ancillary Matters: Transferring title has several important collateral consequences that must be managed proactively.

Notify Your Mortgage Lender: If there is a mortgage on the property, you must inform the lender of the transfer. Federal law (the Garn-St Germain Depository Institutions Act of 1982) generally prevents a lender from activating a "due-on-sale" clause and demanding full repayment of the loan when a property is transferred into a revocable living trust in which the borrower remains the beneficiary. However, providing notification is a professional courtesy and a contractual necessity.  

Update Title Insurance: Contact your title insurance company. The transfer of ownership to a new legal entity (the trust) could potentially void your existing title insurance policy. You will likely need to obtain an "endorsement" to the policy, explicitly extending coverage to the trust as the new owner. This is a critical and often overlooked step that ensures your protection against title defects is not lost.   Manage Property Taxes: To avoid a reassessment of your property's taxes, you must file a "Property Transfer Affidavit" with the local tax assessor. Michigan law provides a specific exemption from the "uncapping" of taxable value for transfers of property into a trust where the settlor (you) or the settlor's spouse is the sole present beneficiary. This filing ensures your property taxes do not unexpectedly increase as a result of the transfer.  

Inform Your Property Insurer: Notify your homeowner's or landlord's insurance agent of the change in ownership. The trust should be named as an insured party on the policy to ensure that liability and casualty coverage remains fully in effect.   Table: Deed Comparison for Trust Funding in Michigan

The choice of deed to fund your trust involves trade-offs between simplicity and protection. The following table compares the most common options in Michigan.

Deed Type Warranties Provided Typical Use Case Level of Grantor Protection Level of Grantee (Trust) Protection Key Consideration for Trust Funding Quitclaim Deed None. The grantor transfers whatever interest they have, if any, with no guarantees about the title.   Transfers between family members or into one's own business or trust where title issues are not a concern.   None. None. The trust accepts the property "as-is" with all potential title defects.   The simplest and most common method for funding a trust, as you are transferring property to yourself as trustee and are presumably aware of any title issues. Warranty Deed Full protection. The grantor guarantees they have clear title, the right to sell, and will defend the grantee against any future claims.   Arms-length sales transactions between unrelated parties where the buyer requires maximum protection.   Highest. Highest. The trust receives full warranty of title. Generally considered unnecessary and overly complex for a simple transfer to one's own revocable trust, but provides the most robust legal protection. Lady Bird Deed (Enhanced Life Estate Deed) Varies based on drafting (can be a quitclaim or warranty). Its key feature is not the warranty but the retained powers.   An alternative to a trust for probate avoidance of real estate, especially for Medicaid planning.   Complete control during life, including the right to sell or mortgage the property without beneficiary consent.   None until the grantor's death. The beneficiary's interest is contingent and can be defeated by the grantor.   This is a strategic alternative to using a trust for real estate. It avoids probate automatically upon death but keeps the property titled in your individual name during your life, which may be simpler. For many, the query of how to deed a rental property to a trust presupposes that this is the only or best method for probate avoidance. However, the Michigan-specific Lady Bird Deed presents a powerful alternative strategy. This special deed allows an owner to name a beneficiary (which could be an individual or a trust) to receive the property automatically upon death, thus avoiding probate, while retaining the absolute right to sell, mortgage, lease, or otherwise dispose of the property during their lifetime without the beneficiary's consent. For an estate where the primary goal for a piece of real estate is simply to avoid probate, a Lady Bird Deed can accomplish this with less complexity than creating and funding a trust. This option should be carefully considered with legal counsel.  

Section 2.3: General Assignment of Personal Property

While assets with formal titles like real estate and bank accounts must be individually retitled, a trust should also account for your tangible personal property that does not have a title. This category includes items such as furniture, clothing, jewelry, artwork, and household goods.

Rather than attempting to list every single one of these items, the standard legal practice is to use a single document called a "General Assignment of Personal Property" or similar title. This document states that you, the grantor, are transferring all of your untitled tangible personal property into your trust. It is signed by you and kept with your trust documents. This simple assignment effectively "funds" the trust with all of these items at once, ensuring they are governed by the trust's terms and do not fall into the residue of your estate to be probated through your pour-over will.  

Part III: Strategic Asset Allocation: A Detailed Guide for Your Portfolio Section 3.1: A Guiding Framework for Asset Titling

The decision of whether to place an asset into a revocable trust is not always a simple "yes" or "no." A more effective approach is to first understand the three primary pathways by which an asset can transfer upon death, and then to determine which pathway is most advantageous for each specific asset in your portfolio. The central question is not merely "What goes in the trust?" but rather, "What is the current transfer mechanism for this asset, and is the trust a better one?"

Every asset you own is currently set to transfer via one of the following methods:

By Will (The Probate Pathway): This is the default path for any asset titled solely in your individual name with no designated beneficiary. Examples include a personal checking account, a car titled only to you, or real estate held as a "tenant in common." These assets are part of your probate estate and must be administered by your personal representative under the supervision of the probate court.   By Beneficiary Designation (A Non-Probate Pathway): Many financial assets allow you to name a beneficiary directly on the account. This includes life insurance policies, annuities, and retirement accounts (IRAs, 401(k)s). Upon your death, these assets pass directly to the named beneficiary by operation of contract, completely bypassing probate. A beneficiary designation will always supersede any conflicting instruction in your will.  

By Trust (A Non-Probate Pathway): This path applies only to assets that have been properly funded into your trust. Like a beneficiary designation, this transfer occurs outside of probate, with the successor trustee distributing the asset according to the trust's terms.   Using this framework, the analysis for each asset becomes a strategic choice. For a probate asset like a bank account, moving it to the trust pathway is almost always beneficial to avoid court involvement. For a non-probate asset like a life insurance policy, the choice is more nuanced: is it better to leave the individual beneficiary designation in place, or to change it to name the trust as the beneficiary? The following sections analyze these choices for major asset classes.

Section 3.2: Assets Typically Placed in a Revocable Trust

These assets are prime candidates for funding into a trust because their default pathway is through probate. Transferring them to the trust changes their pathway to a more efficient, private, non-probate transfer.

Real Estate: As detailed in Part II, any real estate titled in your individual name or as a tenant in common should be transferred to your trust to avoid probate. This is especially critical if you own property in multiple states, as a trust can prevent the need for separate, costly probate proceedings in each state.  

Bank and Investment Accounts (Non-Retirement): Standard checking accounts, savings accounts, money market accounts, and non-retirement brokerage accounts are classic probate assets. To fund them, you will work with your financial institution to change the title on the account from your individual name to the name of your trust. You will continue to use the accounts as normal, using your own Social Security number for tax reporting purposes.   Business Interests: If you own an interest in a closely held business, such as a limited liability company (LLC) or partnership, your ownership interest can be assigned to your trust. This facilitates a smooth transition of ownership and management upon your death or incapacity, according to the instructions in your trust, and avoids potential business disruptions that could be caused by a lengthy probate process.   Section 3.3: Assets Requiring Special Consideration

For certain assets, the decision to fund them into a trust involves weighing specific state laws and practical considerations.

Your Personal Home: The mechanics of transferring your principal residence into your trust are identical to those for a rental property. The primary benefits are probate avoidance and incapacity management. Michigan law provides a crucial property tax protection for this transfer: the conveyance of a principal residence to a revocable trust does not "uncap" or trigger a reassessment of the property's taxable value, so long as the settlor remains the present beneficiary.   Vehicles: While vehicles are titled assets, general estate planning wisdom must yield to specific and highly advantageous Michigan law. For most people, it is not recommended to transfer vehicle titles into a revocable trust. The reason is that Michigan has created a statutory shortcut that achieves the goal of probate avoidance far more simply.  

Under Michigan law, if the total value of a decedent's vehicles is below a certain threshold (currently $60,000, but set to increase to $100,000 for 2024 and 2025), a surviving spouse or heir can transfer the title by simply presenting a death certificate and filling out Form TR-29, "Certification from the Heir to a Vehicle," at the Secretary of State office. This process is only available if a probate estate is not otherwise required, which is precisely the situation a well-funded trust is designed to create.  

Transferring a vehicle to a trust can create unnecessary complications. It may trigger a 6% use tax, and it can create potential insurance liability issues if the policy is not properly updated to name the trust as an insured party.   Therefore, the superior strategy for most Michigan residents is to leave vehicles titled in their individual names and allow their heirs to use the simplified statutory transfer process. The trust should only be used to hold vehicle titles if the total value of all vehicles exceeds the statutory limit, or if the intended recipient is someone other than a direct heir (e.g., a friend or a charity).   Section 3.4: Assets to Exclude from Trust Ownership (and Their Proper Handling)

This section addresses assets for which transferring ownership to a revocable trust is either legally prohibited, financially disastrous, or strategically inferior to using a beneficiary designation. The distinction between changing an asset's owner versus changing its beneficiary is the single most critical concept in advanced asset allocation.

CRITICAL WARNING: Retirement Accounts (IRAs, 401(k)s, 403(b)s)

Under no circumstances should you attempt to transfer ownership of a tax-deferred retirement account, such as a traditional IRA or 401(k), to your revocable living trust. The Internal Revenue Service (IRS) considers an individual retirement account to be owned only by an individual. Any change in ownership—including a transfer to a trust—is treated as a 100% taxable distribution of the entire account balance.  

This would trigger a catastrophic tax event. The full value of your retirement savings would become ordinary income, taxable in the year of the transfer. Furthermore, if you are under the age of 59.5, you would also be subject to a 10% early withdrawal penalty on top of the income tax. This action would irrevocably destroy the tax-deferred status of your most important retirement assets.  

The Correct Strategy: The proper way to integrate retirement accounts with your estate plan is to use the beneficiary designation form provided by the account custodian. You can name your trust as the primary or contingent beneficiary of the account. Upon your death, the retirement funds will be paid to the trust. This allows your successor trustee to manage the funds according to the trust's terms, which is particularly useful if you have minor beneficiaries or wish to control distributions over time. Be aware that naming a trust as a beneficiary invokes complex IRS rules regarding required minimum distributions (RMDs), which should be discussed in detail with legal and financial advisors.  

Life Insurance Policies

Life insurance can be integrated with a trust in two fundamentally different ways, each designed to solve a different problem. Confusing these two strategies can lead to significant negative consequences.

Strategy 1 (The Control Strategy): Naming Your Revocable Trust as BENEFICIARY This is the most common and widely applicable strategy. You continue to own the life insurance policy yourself. On the beneficiary designation form with the insurance company, you name your revocable living trust as the primary beneficiary.  

Goal: The goal of this strategy is control. Upon your death, the insurance proceeds are paid directly to the trust, bypassing probate. Your successor trustee then manages and distributes these funds according to the detailed instructions in your trust agreement.

Best Use Cases: This approach is ideal for parents of minor children, as it avoids the need for a court-appointed conservator to manage the funds. It is also highly effective for providing for a beneficiary with special needs (without disqualifying them from government benefits) or for protecting a substantial payout for an heir who may be a spendthrift or not equipped to handle a large lump sum.   Tax Implication: For this strategy, the death benefit is generally included in your estate for federal estate tax purposes because you retained ownership of the policy.   Strategy 2 (The Tax Avoidance Strategy): Having an IRREVOCABLE Trust as OWNER This is an advanced estate planning technique used primarily by high-net-worth individuals whose estates are large enough to be subject to federal estate taxes.

Goal: The sole goal of this strategy is to remove the life insurance death benefit from your taxable estate.   Mechanism: You create a special type of trust called an Irrevocable Life Insurance Trust (ILIT). The ILIT, as a separate legal entity, then purchases and owns the life insurance policy on your life. You make gifts to the trust, and the trustee uses those gifts to pay the policy premiums. Because you do not own the policy, the proceeds paid at your death are not considered part of your estate and are therefore not subject to estate taxes.   Key Distinction: This strategy does not work with a revocable living trust. The trust must be irrevocable, meaning you give up all rights to change or control the policy once the trust is established.   Table: Life Insurance & Trusts - Owner vs. Beneficiary

The following table clarifies the critical differences between these two distinct strategies to prevent dangerous misunderstandings.

Feature Strategy 1: Naming Trust as BENEFICIARY Strategy 2: Having Trust as OWNER Primary Goal Control over distributions to beneficiaries; probate avoidance. Estate Tax Avoidance by removing proceeds from the taxable estate. Trust Type Used Revocable Living Trust Irrevocable Life Insurance Trust (ILIT) Your Action You own the policy. You change the beneficiary form to name the trust. The ILIT owns the policy. You transfer ownership to the ILIT or the ILIT buys a new policy. Control During Life Full control. You can change beneficiaries, borrow against the policy, or cancel it. No control. The trust is irrevocable, and you cannot be the trustee.   Estate Tax Implication Death benefit is INCLUDED in your taxable estate. Death benefit is EXCLUDED from your taxable estate.   Who It's For Individuals wanting to manage inheritances for minors, special needs heirs, or for long-term control. High-net-worth individuals concerned with minimizing federal estate taxes. Part IV: Maintaining Your Estate Plan and Final Recommendations Section 4.1: Your Plan as a Living Document

Creating and funding an estate plan is a significant achievement, but it is not a one-time event. An estate plan must be viewed as a living document that evolves with your life circumstances and the legal landscape. It is essential to review your will, trust, and beneficiary designations regularly—at least every three to five years—and immediately following any major life event.  

Key events that should trigger an immediate review of your estate plan include:

Marriage, divorce, or remarriage

The birth or adoption of a child or grandchild

The death of a named beneficiary, trustee, or personal representative

A significant change in your financial status (either an increase or decrease in wealth)

Changes in state or federal tax laws that could impact your plan   In addition to periodic reviews, diligent record-keeping is paramount. Your successor trustee and personal representative will need access to your important documents to settle your affairs efficiently. It is advisable to compile and keep all of your estate planning documents, property deeds, vehicle titles, bank and investment account statements, life insurance policies, and a list of digital assets with login information in a single, safe, and accessible location. Ensure that the people you have appointed to these roles know where to find this information when the time comes.  

Section 4.2: Concluding Recommendations and the Indispensable Role of Professional Counsel

This report has outlined the fundamental components and strategic considerations for developing a comprehensive estate plan in Michigan. The key principles for an effective plan are coordination, meticulous funding, and strategic, asset-specific decision-making. A will and a revocable living trust work in concert to ensure your wishes are carried out privately and efficiently, but only if the plan is properly constructed and maintained.

The process involves navigating complex areas of property law, tax law, and state-specific regulations. While this guide provides a detailed framework for understanding these concepts, it is not a substitute for personalized legal advice. The nuances of your family situation, the specific nature of your assets, and your long-term goals require a tailored plan.

Therefore, the final and most important recommendation is to engage the services of a qualified Michigan estate planning attorney. An experienced attorney can help you navigate the complexities of trust drafting, ensure your assets are funded correctly, advise on the optimal strategies for your unique circumstances, and help you avoid the common pitfalls that can undermine an otherwise well-intentioned plan. This report should serve as a powerful educational tool, empowering you to have a more productive and informed consultation with your legal counsel and to become an active and knowledgeable participant in securing your legacy.  

trustandwill.com Transferring Retirement Accounts into a Trust | Trust & Will Opens in a new window

investopedia.com How Can I Put My IRA In a Trust? - Investopedia Opens in a new window

ddc-law.com Michigan Estate Planning Checklist | A Step-by-Step Guide - Dingeman & Dancer, PLC Opens in a new window

findlaw.com Making a Will Checklist - DIY Legal Forms - FindLaw Opens in a new window

cnb.com Transfer Property Into a Trust | City National Bank Opens in a new window

rochesterlawcenter.com Michigan Estate Planning Checklist - Rochester Law Center Opens in a new window

seanjnichols.com Putting Home Into Trust | Benefits and How To Opens in a new window

customestateplans.com Checklist For Funding Your Trust | Karen L. Stewart Estate Planning Attorney Opens in a new window

michigan.gov Certification from the Heir to a Vehicle (Tr-29) - State of Michigan Opens in a new window

maullaw.com www.maullaw.com Opens in a new window

michiganestateplans.com How Asset Titling Matters in Estate Planning: Our Michigan Lawyers Explain What You Need to Know - Glenn Matecun Opens in a new window

markmuellerattorney.com Understanding Beneficiary Designations for Your Michigan Estate Plan | Lex Novus, PLC Opens in a new window

smartasset.com Pros and Cons of Revocable Living Trust - SmartAsset.com Opens in a new window

matuslaw.com Advantages and Disadvantages of Creating a Living Trust - Matus Law Group Opens in a new window

trustandwill.com Warranty Deed vs Quit Claim Deed: What's the Difference? - Trust & Will Opens in a new window

tilchinhall.com Common Types of Land Deeds in Michigan | Tilchin & Hall PC Opens in a new window

thefgfirm.law Types of Deeds in Michigan: A Complete Guide | Fausone & Grysko, PLC Opens in a new window

legalzoom.com Make a Living Trust: A Quick Checklist - LegalZoom Opens in a new window

michfb.com Beneficiary Questions | Michigan Farm Bureau Family of Companies Opens in a new window

nolo.com How to Make a Will in Michigan | Last Will & Testament Michigan Opens in a new window

rochesterlawcenter.com Advantages And Disadvantages Of A Trust - Rochester Law Center Opens in a new window

guardianlife.com Life Insurance Trusts Explained | Guardian Opens in a new window

chase.com When Does it Make Sense for a Trust to Own Your Life Insurance Policy? - Chase.com Opens in a new window

actec.org Understanding Life Insurance Policy Ownership Opens in a new window

securian.com Naming a beneficiary: What you need to know - Securian Financial Opens in a new window

lanchesterlaw.com Life Insurance Trusts vs. Living Trusts - Lanchester Law Firm Opens in a new window

smartasset.com How To Create A Living Trust In Michigan - SmartAsset.com Opens in a new window

legislature.mi.gov MCL - Section 257.236 - Michigan Legislature Opens in a new window

legislature.mi.gov of 3 hb4417-4419/2324 TRANSFER OF PROPERTY; HEIRS H.B. 4417 (H-1) - Michigan Legislature Opens in a new window

nolo.com Make a Living Trust in Michigan - Nolo Opens in a new window

plunkettcooney.com Michigan Lady Bird Deeds Solid for Transferring Real Estate and Avoiding Probate: business law and litigation defense services - Plunkett Cooney Opens in a new window

michigan.gov Living Trusts - Beware of "One Size Fits All" Estate Plans & "Free Lunch Seminars" Opens in a new window

legalzoom.com Create a Living Trust Online with Attorney Support - LegalZoom Opens in a new window

rochesterlawcenter.com How To Transfer Property Into A Trust - Rochester Law Center Opens in a new window

michigan.gov Transfer of Ownership Guidelines - State of Michigan Opens in a new window

maullaw.com How do you fund a trust in MI, and what assets should you include? | Maul Law Opens in a new window

legislature.mi.gov TITLE INSURANCE: ALLOW TRANSFER INTO TRUST - Michigan Legislature Opens in a new window

westmichiganlaw.com Should I Transfer My Michigan Vehicles to My Trust? - West ... Opens in a new window

legalzoom.com How to Create a Living Trust in Michigan - LegalZoom Opens in a new window

investopedia.com How to List Beneficiaries for Life Insurance While Having a Trust Opens in a new window

michbar.org Ladybird deeds: Key features and uses - State Bar of Michigan