Living Trust vs. Will in Michigan: What's the Difference?
General information only, not legal advice. See the disclosure at the end.
A will and a revocable living trust are the two documents most people compare when they start estate planning in Michigan. Both say who gets your property. They work very differently, though, especially when it comes to probate, incapacity, and the effort involved.
The basics of a Michigan will
A will takes effect only at death. Under Michigan's Estates and Protected Individuals Code, an adult with sufficient mental capacity can make a will (MCL 700.2501), and a typical witnessed will is signed by the will-maker and two witnesses (MCL 700.2502).
A will can name beneficiaries, nominate a personal representative to handle the estate, and nominate a guardian for minor children. What a will generally can't do is keep assets out of probate. Property that passes under a will usually goes through the probate court, or a small-estate procedure if the estate qualifies.
The basics of a revocable living trust
A revocable living trust is governed by the Michigan Trust Code, which starts at MCL 700.7101. You (the settlor) sign a trust document, usually name yourself as trustee while you're able to serve, and name a successor trustee to take over at your incapacity or death.
A few Michigan rules worth knowing:
- You can generally change or cancel it. For trusts created by documents signed on or after April 1, 2010, the settlor can revoke or amend unless the trust expressly says it's irrevocable (MCL 700.7602).
- Capacity. The mental capacity needed to create, amend, or revoke a revocable trust is the same as for a will (MCL 700.7601).
- Duties run to you. While the trust is revocable, the trustee's duties are owed to the settlor (MCL 700.7603).
Funding: the step that makes a trust work
Signing a trust document doesn't move anything into it. Michigan law says a trust isn't invalid just because property wasn't transferred at signing, but until property is actually transferred, the named trustee has no duties over it (MCL 700.7401).
"Funding" means retitling assets into the trust's name or, where allowed, naming the trust as beneficiary. For Michigan real estate, that usually means signing and recording a new deed. Accounts and investments often need forms from the bank or brokerage.
Assets left outside the trust may still need probate. That's why many trust-based plans include a pour-over will as a backstop.
Side-by-side: key differences
Probate. A will generally leads to probate for assets that pass under it. A funded living trust may help avoid probate for assets properly titled in the trust. Neither can promise a probate-free result.
Incapacity. A will does nothing while you're alive. A trust lets a successor trustee manage trust assets if you can't. (A durable power of attorney and a patient advocate designation address other parts of incapacity planning.)
Privacy. A will used in probate is generally filed with the court. A trust document usually isn't filed with a court, though beneficiaries have rights to information.
Contest deadlines. Michigan limits the time to challenge a trust that was revocable at death to the earlier of two years after death or six months after the trustee sends a required notice (MCL 700.7604). Wills have their own probate deadlines.
Creditors. A revocable trust isn't an asset-protection tool. Its property is subject to the settlor's creditors during life and to claims and expenses after death (MCL 700.7506).
Effort. A will is usually simpler to set up. A trust takes more upfront work, mainly funding, but may make things easier for your family later.
Property tax note for Michigan homeowners
Michigan's property tax law says that a conveyance to a trust where the settlor, the settlor's spouse, or both are the sole present beneficiaries is generally not a "transfer of ownership" that uncaps taxable value (MCL 211.27a(7)(g)). What happens when the property later passes to beneficiaries is a separate question, and the answer depends on who they are and how the property is used.
Which is right for you?
There's no one answer, and we can't tell you which to choose. Some people use a will alone. Others use a trust with a pour-over will, and some Michigan homeowners pair a trust with a Lady Bird deed. The right mix depends on your assets, family, and goals.
When to talk with a Michigan attorney
Consider a licensed Michigan attorney if Medicaid or long-term care planning is involved; you have estate or income tax concerns; you have a blended family or a beneficiary with a disability; you own a business, rental property, or property in another state; you expect a family dispute; or there's any question about capacity.
Our Michigan living trust kit
Our Michigan Revocable Living Trust Estate Plan Kit is a self-help set of Word and PDF templates for a trust-based plan. You can also browse our Michigan legal document kits.
FAQ
Does a living trust avoid probate in Michigan? It may help avoid probate for assets properly transferred into the trust. Assets left outside it may still need probate.
Do I still need a will if I have a trust? Many trust-based plans include a pour-over will to catch assets that weren't transferred. Whether it fits your plan depends on your situation.
How do I fund a living trust in Michigan? Generally by retitling assets into the trustee's name or updating beneficiary designations where permitted. Real estate typically requires a recorded deed.
Disclosure: Rexford Mercantile is not a law firm and is not a substitute for a lawyer. This article is general information, not legal advice, and it may not reflect the most recent changes in Michigan law. We sell self-help document templates. For advice about your situation, talk with a licensed Michigan attorney.