Legal Question in Wills and Trusts in Michigan
Best way to designate children as beneficiaries
Our attorney told us that minor children can't inherit property in MI, and therefore, we should designate ''Trustee of the Trust for our daughters'' etc. as the contingent beneficiary on our life insurance, retirement accounts, etc. in the event that my wife and I die together (or close to together).
Then I was told by an investment advisor that only people can inherit assets directly, and that anything going to ''Trustee'' will need to go through probate.
Who's right, and which is best? We would want our children's guardian to get some money quickly and with as little hassle as possible, but we also don't want them to lose more in taxes than they need to. Thank You!!
3 Answers from Attorneys
Re: Best way to designate children as beneficiaries
I specialize in Estate Planning and Trusts. Have drafted 1,000's of Trusts. One of the main purposes of a Trust is to avoid probate. Frnakly, I would get another investment advisor, he does not know what he is talking about. I would be happy to send you a package of information on estate planning and trusts. Frankly, it is more important for you to do your plannning then your parents as you are an adult and can handle the emotional and financial impact if your parents do not plan; Your children can't.
Check out my web site for where I am located and my credential.
Don Rosenberg
Barron & Rosenberg, P. C.
200 East Long Lake Rd. Ste 180
Bloomfield Hills, MI
48304-2361
Re: Best way to designate children as beneficiaries
Listen to the lawyer. I would seriously question the credentials of the "investment advisor".
Re: Best way to designate children as beneficiaries
Children cannot inherit property directly. This means if you have a will, and leave property to your children, the court will appoint a conservator (you can nominate that person in your will) to manage the children's assets, until they reach age 18. However, to designate a trust as a beneficiary, you have to create a trust, either in a will (which in my opinion is inefficient) or in a trust created during your lifetime.
The purpose of a trust, is to avoid probate. If you draft a revocable living trust, and title all your assets in the name of the trust, and name the trustee as beneficiary of life insurance, at your death, the trustee can collect the assets and administer them for your children. Also, with a trust,you can keep the money in Trust until an age at which you think your children will be responsible to receive and handle the money. With a conservatorship,anything left, must be distributed at age 18.
There are also documents called 'contingent trusts' which only kick in if both of you die. Those are useful with minor children, when the combined family assets are under the exemption equivalent (this year $675,000, next year $1 million)so that tax planning is not an issue.
Your investment advisor is flat out wrong. If you have any other questions, please call. I have been doing this for 22 years. My email address is probably attached. My website is probateprince.com, and I can also be reached through it.
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