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Funding: a trust governs what is titled to it

A trust is created by transferring property to a trustee, by the owner's declaration of holding identifiable property as trustee, or by the other methods the statute lists; an instrument is not invalid because nothing was transferred when it was signed (MCL 700.7401). Retitle accounts and real property to the trustee, and review beneficiary designations so they agree with the plan.

A conveyance to a trust is not a transfer of ownership — so the home's taxable value is not uncapped — where the settlor or the settlor's spouse conveys it and the sole present beneficiary is the settlor or the settlor's spouse (MCL 211.27a(7)(g)). For a deed of real property, a certificate of trust with the legal description may accompany the instrument (MCL 565.431).

While you are living: your trust, your control

Unless its terms expressly make it irrevocable, you may revoke or amend a trust whose instrument was signed on or after April 1, 2010 (MCL 700.7602(1)) — by the method the trust provides or, where it provides none or its method is not exclusive, by another writing showing your intent by clear and convincing evidence (MCL 700.7602(3)). While it is revocable, the beneficiaries' rights are subject to your control and the trustee's duties are owed to you (MCL 700.7603(1)); the trustee may follow your direction even where it differs from the terms (MCL 700.7808).

Your successor trustee

The person your trust names steps in when you can no longer serve. A designated successor accepts by the trust's method or by acting as trustee (MCL 700.7701), and then has the duties of a trustee — among them, within 63 days after accepting and within 63 days after learning the trust is irrevocable, notices to the qualified trust beneficiaries (MCL 700.7814(2)(b), (c)). A successor is not liable for your actions as trustee and has no duty to investigate them (MCL 700.7603(4), (5)). Tell the person you named where the trust is.

Keeping it current

Review the trust after a marriage, a divorce, a birth or a move. A divorce or annulment revokes a revocable provision for the former spouse and the former spouse's relatives, and their nomination as trustee, unless the instrument, a court order or a contract between the spouses provides otherwise (MCL 700.2807). A will can pour property left in your name into the trust (MCL 700.2511).

If you can no longer manage it

If the trustee reasonably believes you are incapacitated, the trustee keeps your designated agent — or, where there is none or the only agent is a trustee, the beneficiaries who would be qualified trust beneficiaries at your death — informed of the trust and its administration (MCL 700.7603(2)). An agent under a durable power of attorney may revoke, amend or direct distributions only to the extent the trust or the power of attorney expressly authorizes (MCL 700.7602(5)). A patient advocate designation covers medical decisions (MCL 700.5506).

What happens at your death

The trust becomes irrevocable. Your successor trustee secures the property (MCL 700.7810), sends the notices (MCL 700.7814(2)), publishes a notice to creditors where no personal representative has letters (MCL 700.7608), and reports at least annually and at termination (MCL 700.7814(3)). The trust may be contested within the earlier of 2 years after your death and 6 months after the trustee's notice (MCL 700.7604). Distributing your home to your or your spouse's parent, sibling, child or grandchild is not a transfer of ownership when the property is residential and not used commercially afterward (MCL 211.27a(7)(v)).

Where to keep the original

Somewhere safe that your successor trustee can reach, with copies kept apart. A trust may be registered with the probate court, but registration does not place it under the court's supervision (MCL 700.7209, 700.7201).

When a licensed Michigan attorney is the right next call

TrusteeClear explains and organizes; it does not review a trust or say what is missing from it. Many people bring their trust to a licensed Michigan attorney of their choosing to coordinate deeds, beneficiary designations and a pour-over will, or to update it after a life event.