At Boroja, Bernier & Associates, we help individuals and families throughout Oakland and Macomb Counties plan for the future with confidence. One of the most powerful estate planning tools available in Michigan is the revocable living trust. When created and maintained properly, a living trust allows you to transfer assets smoothly, avoid probate, maintain privacy, and provide for your loved ones without court intervention. However, we often see clients make common mistakes that weaken the protections and benefits of their trust. These missteps can lead to unintended consequences, disputes, and increased costs for your family.

We believe that every family deserves a clear, well-structured estate plan. That starts with understanding what to avoid when setting up your living trust. Below, we’ll discuss the most frequent errors we encounter and explain why these mistakes can jeopardize your goals under Michigan law.

Failing To Fund The Trust Properly

One of the most common and costly mistakes we see is failing to fund the trust. A trust is only effective if your assets are actually transferred into it. This means retitling property such as real estate, bank accounts, investment accounts, and business interests into the name of your trust. In Michigan, if assets are not titled in the name of the trust, they may have to go through probate—even if the trust exists.

We often meet clients who signed a living trust years ago but never transferred ownership of their home or financial accounts into it. Under Michigan law, assets that are not properly titled will pass through probate, governed by the Estates and Protected Individuals Code (EPIC), MCL 700.1101 et seq. To avoid this, we help ensure that deeds are recorded correctly and account ownership is updated with each financial institution.

Not Updating The Trust Over Time

Life changes, and so should your trust. We frequently review trusts that no longer reflect our clients’ current wishes, family structure, or financial situation. Common events such as births, deaths, marriages, divorces, and changes in financial assets should trigger a review of your trust.

Failing to update your trust could lead to assets being distributed to people you no longer intend to benefit or excluding new loved ones. Michigan law allows amendments and restatements of revocable trusts, and we work with our clients to ensure their documents stay accurate and enforceable.

Choosing The Wrong Trustee

Naming a trustee is one of the most important decisions in the estate planning process. The trustee manages the trust assets and carries out your instructions after your death or if you become incapacitated. Choosing someone who is not organized, trustworthy, or capable of handling financial matters can lead to problems.

We’ve seen cases where poor trustee decisions have resulted in delays, conflict among beneficiaries, or even mismanagement of the estate. Under MCL 700.7501 through MCL 700.7512, trustees in Michigan have fiduciary duties to act in the best interests of the beneficiaries. We counsel our clients carefully to select a trustee who can fulfill these duties effectively and with integrity.

Overlooking Powers Of Attorney And Other Key Documents

A living trust is a powerful tool, but it’s only part of a complete estate plan. Many people mistakenly assume that having a trust eliminates the need for other planning documents. We always recommend pairing your trust with a durable power of attorney, medical power of attorney, and HIPAA release.

Without these documents, your family may face delays or be unable to make urgent decisions about your health care or finances during your lifetime. A comprehensive plan ensures your wishes are respected, and your loved ones have the authority they need when it matters most.

Failing To Consider Tax Implications

While Michigan does not have a state estate tax, federal estate tax laws may still apply to larger estates. A common mistake is failing to consider how the trust interacts with tax planning strategies. We help our clients understand how to structure their trusts to minimize tax exposure, particularly for blended families or clients with business assets.

Trusts can also affect how income is taxed during your lifetime and after death. By working closely with tax professionals, we help our clients create plans that are not only legally sound but financially smart.

Frequently Asked Questions About Living Trusts In Michigan

What Is A Living Trust And How Does It Work? 

A living trust is a legal document that allows you to place your assets under the control of a trustee for the benefit of your chosen beneficiaries. It becomes effective during your lifetime and continues after your death. The main advantage is that assets in a properly funded trust avoid probate.

Does A Living Trust Avoid Probate In Michigan? 

Yes, but only if the trust is properly funded. Assets titled in the name of the trust do not go through the Michigan probate court system. However, if assets are left outside the trust, those may still be subject to probate.

Can I Make Changes To My Trust After I Create It? 

Yes. If the trust is revocable, you can amend it or even revoke it entirely as long as you have capacity. Many people update their trusts when their life circumstances change.

What Happens If I Die Without Funding My Trust? 

If you pass away and your assets are not titled in the trust, those assets will likely go through probate. In that case, your trust won’t control those assets, and the distribution will follow either your will or Michigan’s default laws of intestate succession.

Is A Will Still Necessary If I Have A Living Trust? 

Yes. We typically prepare a “pour-over will” to accompany your trust. This ensures that any assets accidentally left out of the trust are transferred into it upon your death. The will serves as a safety net for any unfunded property.

How Do I Know If A Living Trust Is Right For Me? 

A living trust is a great option for many individuals and families, especially those who want to avoid probate, protect privacy, and simplify asset distribution. We offer consultations to review your unique situation and recommend the right plan.

Protect Your Assets And Your Family With Boroja, Bernier & Associates

At Boroja, Bernier & Associates, we guide families through the estate planning process with clarity and care. Whether you’re just starting your plan or updating a trust created years ago, we help you avoid costly mistakes and secure your future.

We offer estate planning consultations at our offices in Troy and Shelby Township, Michigan. Contact our Shelby Township living trust attorneys by calling 586-991-7611 to schedule your consultation with our team. We serve clients throughout Oakland County and Macomb County. Let us help you create a plan that gives you and your loved ones peace of mind.