Setting Up a Living Trust in Michigan (What You Need to Know)

Living Trust and estate

Living trusts are a valuable estate planning tool. But a living trust is not appropriate for everyone or every estate plan. If you consider making a living trust part of your estate plan, your first step is to understand how a living trust works and what it takes to set one up.

Living trusts offer desirable benefits for some individuals and estates. However, the only prudent way to determine whether a living trust belongs in your estate plan is to discuss your personal and financial circumstances with a knowledgeable estate planning attorney. The discussion that follows provides basic information about a living trust, which will prepare you for a discussion with your lawyer.

What Is a Living Trust?

A trust is established by a specific document referred to as the trust instrument, document, agreement, or declaration. The person creating the trust (and executing the document) is the grantor of the trust.

A trust contains property, referred to as the trust assets. A trustee appointed in the document manages and distributes the trust assets according to the terms in the document.

Living trusts are only one of many different kinds of trusts. A living trust is a trust created by the grantor during his or her lifetime. Other common terms used for a living trust include inter vivos (Latin for “between living people”) trust, grantor’s revocable trust, or simply revocable trust.

The term revocable is used in connection with living trusts because a living trust most frequently is revocable — but a living trust also can be irrevocable. The trust document determines whether a trust is revocable or irrevocable.

A revocable trust is one that can be changed or terminated at any time by the grantor. An irrevocable trust is one that cannot be changed or terminated by the grantor or anyone else, except that Michigan courts have authority to modify irrevocable trusts in limited situations. The difference between a revocable trust and irrevocable trust is significant.

Common Characteristics of a Living Trust

The trust document completely determines the terms that govern a specific living trust. However, most living trusts have certain characteristics.


In a living trust, the grantor appoints himself or herself as the trustee of the trust for the duration of the grantor’s lifetime. In some cases, the grantor may choose to appoint a co-trustee.

The grantor also names a successor trustee in the trust document. The successor trustee assumes responsibility for managing and distributing the trust if the grantor becomes temporarily or permanently incapacitated and when the grantor passes away.

Revocable v. Irrevocable

As explained above, most living trusts are revocable under the terms of the trust document. Generally, a revocable living trust becomes irrevocable on the grantor’s death. In some situations, the grantor may decide to create an irrevocable living trust when establishing the trust.


Every trust includes beneficiaries, who are named in the trust document. Typically, the grantor is the sole beneficiary of a living trust during his or her lifetime. The grantor also names other beneficiaries in the trust document, who become the trust beneficiaries after the grantor passes away.

Trust Assets

The assets of a living trust include property that the grantor places in the trust. Funding the trust is a separate process from executing the document that creates the trust.

When a grantor places property and financial assets, the grantor maintains full ownership and control over all the assets. Creating a living trust does not require the grantor to relinquish any control over property in the trust.

Trust assets usually include money, as well as financial assets like bank and security accounts, retirement accounts, and life insurance policies. Real estate and personal property also are often transferred to a living trust.

Funding a Living Trust

To complete establishment of a living trust, the grantor must transfer assets into the trust. For assets with beneficiaries (like retirement accounts and life insurance policies), transfer requires changing the beneficiary. This change must be accomplished in a very specific manner to be effective.

If property has a title document that demonstrates ownership, like real estate and some personal property, title of the property must be transferred to the trust. This transfer also must be accomplished in a very specific way.

Benefits of a Living Trust

A living trust provides benefits that are advantageous in an estate plan for some individuals. The benefits include:

  • Providing the grantor with flexibility in managing and distributing assets, while maintaining full ownership of all property
  • Giving the grantor the ability to control distribution of assets after his or her death
  • Maintaining privacy of the estate after the grantor’s death
  • Avoiding probate of the estate following the grantor’s death
  • Protecting the grantor’s assets in the event of temporary or permanent incapacity
  • Ensuring that beneficiaries receive specified estate distributions immediately after the grantor’s death

These benefits are desirable for some people but not for others. You should make the decision about whether to include a living trust as part of your estate plan only after you talk with an experienced estate planning attorney.

For additional details about trusts and estate planning that are especially relevant to considering a living trust, please refer to my blog posts about creating a trust and why you should not use do-it-yourself / DIY estate planning documents.

It is important to point out that if you create a living trust, that is not the only estate planning document you need to protect yourself and your family. A complete estate plan also includes a will and durable powers of attorney and may include other documents, such as a Patient Advocate Designation.

Talk With an Experienced Ann Arbor Estate Planning Attorney

As the preceding discussion illustrates, making the decision about a living trust and establishing the trust involve a complex process. Assistance from an estate planning attorney with experience in living trusts is essential. In my practice at Ager Law Office, I help individuals and families with all aspects of estate planning, including all types of trusts.

From my Ann Arbor office, I serve clients throughout Washtenaw County. To talk with me about a will, trust, or estate plan, call (734) 649-0784, send an email to, or use my online contact form.

Categories: Estate Planning