Wills, Trusts and Estate Planning

To make sure you and your loved ones are insulated against the whims of financial fate, spend some time planning your future with Kenneth V. Zichi, attorney and counselor at law. In Livingston County since 1986, Kenneth V. Zichi is a member of the Probate & Estate Planning Section of the State Bar of Michigan.

If I had to pick one pet pieve, it would be all the 'one trick ponies' out there today, who try to scare people about Probate, Wills and Trusts. First off, please remember that Probate laws differ from state to state. The following discussion applies to residents of Michigan, and is not a substitute for legal counsel. If you have questions, please contact me or a local lawyer for more details and real legal advice!

You may have seen an advertisement in the newspaper, on the radio or TV, or perhaps you attended a financial planning seminar that described revocable inter vivos trusts, also known as living trusts. Some planners claim everyone needs a living trust, while others believe that a will is all most people need.

YOU probably already know better. Not everyone wears a size 9 shoe, and not everyone fits into any one 'size' estate plan! Before you make a decision to incur the extra cost and hassle of a trust, you should know two things:

1. In Michigan, Probate can be fast and inexpensive.

Some states impose procedural requirements that generate large legal fees and take years to complete. But Michigan has (since 1978!) a vastly simplified procedure called "unsupervised administration" that you can take advantage of merely by using the proper language in your will. This procedure can often be completed within five months if no estate tax return needs to be filed. My fee to set up a living trust usually comes to about the same amount as my fee to handle an uncontested probate with unsupervised administration. So a living trust in Michigan at least, is not likely to save you money.

2. Livings trusts do not save taxes

Anyone who tells you that a living trust will save estate or income taxes is mistaken. A living trust can do nothing about income taxes. And while it is true that a living trust may contain the same estate tax-saving provisions as a will, the decision to execute a living trust instead of a tax-planned will is going to have no effect on your estate tax bill. There are times in large estates when you will want to have a trust for non-tax purposes, and you can use QTIP trusts to maximize your use of the estate tax exemption for married couples, however, you need to do this in conjunction with a Will, and you need to insure the person you hire to help you through this process knows what he is doing, and what your needs are!

Whatever else you might take from this, please realize that a 'one size fits all' kit, or a 'one trick pony' who tries to sell you a trust but can't explain the plusses and minuses of the document will probably be wrong for anyone. Here are a couple of links to sites with specific information. The one from Texas is 98% aplicable to Michigan Law as well, and is perhaps the best I've seen on the web for explaining some of the myths that circulate around the Internet! (Click your browsers 'back' button to return here after clicking the links below!)