Michigan Wills vs. Trusts
The Great Lakes State offers unique estate planning features including a statutory will template, simplified probate for small estates under $15,000, and strong spousal protections. With Michigan’s holographic will recognition and “Lady Bird Deeds” for real estate transfers, understanding the important differences between wills and trusts can save your family significant time, money, and stress while preserving your legacy.
Table of Contents
US Map For The Different Will and Trust Requirements by State
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Michigan Will Requirements
A Michigan Last Will and Testament should include:
- Age and Capacity: Testator must be mentally competent and at least 18 years old
- Format: Must be in writing
- Signature: Must be signed by the testator
- Witnesses: Must be signed by two competent witnesses
Mental Competence
Testators are mentally competent under Michigan law if they:
- Understand the nature and extent of their assets
- Know who their heirs are and who stands to benefit from the will
- Understand that the will provides for disposition of assets after death
Witness Requirements
For Michigan wills:
- Witnesses must actually observe the testator either signing the will or declaring that the document is intended as a will and that the signature is genuine
- Though disinterested witnesses are generally preferable, neither a Michigan will itself nor any provisions thereof are invalidated if one of the witnesses has an interest in the will
Incorporation by Reference
Under Michigan law, a will can incorporate another document by reference if:
- The document is in existence when the will is executed
- It is sufficiently described to allow identification
- Michigan law expressly authorizes testators to incorporate personal property memoranda providing for specific bequests of tangible personal property items
- Personal property memoranda should be signed by the testator and may be prepared before or after execution of a will
Self-Proved Wills
Wills in Michigan do not need to be notarized. However, a Michigan will can be made “self-proved” via execution of a statutorily compliant notarized affidavit:
- Within the affidavit, the testator acknowledges the will’s authenticity, and the witnesses provide attestation that the testator signed the will with the intent that it would serve as a will
- When a self-proved affidavit is present, it serves as evidence of a will’s authenticity in probate, avoiding the need for witness testimony
- The Michigan legislature publishes a form self-proved affidavit within the Michigan Compiled Laws, at §700.2504
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Amendment, Revision, and Revocation of Michigan Wills
Amending a Michigan Will
A Michigan will can be amended or revised through:
- Execution of a codicil (an addendum to an existing will)
- To validly amend a will, a codicil must comply with all legal formalities that apply to creation of a will
Revoking a Michigan Will
A will can be revoked or amended through:
- Execution of a new will expressing the intent to revoke or supplement the prior will
- If a new will does not expressly revoke a prior will, the new will is interpreted as supplementing the prior will, with the later-executed will controlling in the event of any conflicting provisions
- If the later will disposes of substantially all of the testator’s assets, the testator is assumed to have intended the new will to fully supersede the earlier will
Automatic Revocation by Divorce
Effect of Marriage After Will Execution
Holographic and Oral Wills
Holographic Wills
Michigan law recognizes holographic wills, with or without witnesses, if the document in question:
- Is signed and dated by the testator
- All material provisions within the document are recognizably written in the testator’s own handwriting
Oral (Nuncupative) Wills
Oral (or “nuncupative”) wills are not recognized under Michigan law.
Michigan Trust Requirements
To create a valid trust under Michigan law:
- The grantor must have sufficient legal capacity to create the trust
- For revocable trusts, the standard for capacity is the same as for creation of wills
- The trustee must have actual duties to perform
- The trust must usually have a definite beneficiary—subject to a few exceptions such as animal trusts and charitable trusts
Trust Purpose Requirements
The purposes of a Michigan trust must be:
- Lawful
- Not in conflict with public policy
- Possible to achieve
Oral Trusts
Though most trusts are memorialized by a written instrument, Michigan law permits oral trusts as long as the terms of the trust can be established by clear and convincing evidence.
Revocation or Amendment
The grantor of a revocable trust subject to a written trust instrument can revoke or amend the trust by executing a written instrument that clearly expresses the intent to revoke or amend the trust.
Trust Creation Methods
Under the Michigan Trust Code, a trust is created when:
- A settlor transfers title to one or more assets to a trustee for a beneficiary’s benefit
- Upon the grantor’s declaration that he or she holds property as trustee for someone else’s benefit
- Upon execution of a written appointment of a trustee
Trust Termination
A Michigan trust terminates when:
- It is revoked or expires under its own terms
- When the trust’s purpose has been achieved
- When the purpose has become impossible, unlawful, or contrary to public policy
A Michigan court may also terminate or modify a trust if, due to unanticipated circumstances, termination or modification is necessary to further the trust’s purpose or likely intent of the grantor.
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Special Considerations
Michigan Statutory Will
Fill-in-the-Blank Will Template
The Michigan legislature has established a fill-in-the-blank will template which, if fully completed and signed by the testator and two witnesses, is deemed to constitute a valid will under Michigan law. The Michigan Statutory Will is published at Mich. Comp. Law, §700.2519.
Estate Taxes
No State Estate Tax
Michigan does not impose any state-level estate tax. Large Michigan estates may still be liable for the federal estate tax.
Simplified Probate
Small Estate Procedures
Upon an executor’s petition, Michigan probate courts may permit an expedited probate process for small estates:
- If the gross value of the estate after paying final expenses totals $15,000 or less, the probate court can order estate property turned over to a surviving spouse or, if none, to lawful heirs
- Similarly, if an estate inventory reveals that there are no assets in excess of lawful exemptions (e.g., homestead allowance, family allowance, expenses related to the decedent’s final illness), the personal representative can distribute assets directly to lawful beneficiaries
Non-Probate Transfers
Spendthrift Trusts
Creditor Protection Through Trusts
When a Michigan trust includes a valid spendthrift clause:
- A creditor of a beneficiary cannot attach trust property until distributed directly to the beneficiary
- However, interests in spendthrift trusts can be attached to satisfy claims for domestic support obligations, government debts, or claims arising from services that enhance, preserve, or protect the beneficiary’s interest in the trust
- If a spendthrift trust is revocable, creditors of the settlor can reach trust assets during the settlor’s lifetime
- If irrevocable, creditors of the settlor can only reach the amount of assets that can be distributed for the settlor’s benefit
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Wills vs. Trusts: Comparison
Feature | Wills | Trusts |
---|---|---|
When It Takes Effect | After death | Can be immediate (living trust) or after death (testamentary trust) |
Probate Process | Requires probate | Assets in trust avoid probate |
Privacy | Public record | Generally private |
Challenges | Can be challenged in probate court | More difficult to challenge |
Cost to Create | Generally less expensive | Usually more expensive |
Ongoing Administration | None until death | May require ongoing management |
Protection During Incapacity | None (requires separate power of attorney) | Can provide management if grantor becomes incapacitated |
Michigan Special Feature | Statutory will template; recognizes holographic wills | Spendthrift provisions for creditor protection; oral trusts recognized |
Conclusion
Creating a will or trust does not have to be difficult or intimidating for Michigan residents. However, certain circumstances—like second marriages, stepchildren, aging parents, special needs beneficiaries, guardianships, and business interests—can add complexity and result in unforeseen consequences.
Michigan offers unique estate planning tools including a statutory will template, simplified probate for small estates under $15,000, and strong spousal protections. The state’s recognition of holographic wills provides additional flexibility, while “Lady Bird Deeds” offer an alternative to traditional TOD real estate transfers. These tools, combined with Michigan’s spendthrift trust provisions, provide residents with multiple options to create effective estate plans.
When any out-of-the-ordinary issues are present, it’s advisable to consult with an experienced attorney familiar with and licensed under Michigan law to ensure your estate plan takes full advantage of the state’s provisions while avoiding potential pitfalls.
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FAQs: Michigan Wills and Trusts
Q: What are the requirements for a valid will in Michigan?
A: A valid Michigan will must be in writing, signed by the testator (who must be at least 18 and of sound mind), and witnessed by two competent people. The witnesses must observe the testator either signing the will or declaring that the document is their will and the signature is genuine. Michigan also recognizes holographic wills that are entirely in the testator’s handwriting, signed, and dated, even without witnesses. Additionally, Michigan offers a statutory will template that residents can complete as a legally valid option.
Q: Does Michigan have estate or inheritance taxes?
A: No, Michigan does not impose state-level estate taxes or inheritance taxes. This means assets passing to heirs are not subject to additional taxation at the state level beyond any federal estate tax that might apply to very large estates. The federal estate tax only affects estates worth more than $12.92 million per individual (as of 2023), so most Michigan residents won’t need to worry about estate taxes at all.
Q: What is a Michigan Statutory Will?
A: The Michigan Statutory Will is a fill-in-the-blank will template created by the Michigan legislature. Found in Michigan Compiled Laws §700.2519, this template allows residents to create a legally valid will by simply completing the form and having it signed by themselves and two witnesses. While it doesn’t offer customization for complex situations, it’s an accessible option for straightforward estates and ensures compliance with Michigan law. It covers basic provisions like naming an executor, guardians for minor children, and directing the distribution of property.
Q: What is a Lady Bird Deed in Michigan?
A: A Lady Bird Deed (also called an enhanced life estate deed) is a special type of deed that allows property owners in Michigan to transfer real estate to beneficiaries upon their death while retaining complete control during their lifetime. Unlike traditional life estate deeds, Lady Bird Deeds allow the owner to sell, mortgage, or otherwise use the property without beneficiary consent. These deeds function similarly to transfer-on-death deeds (which Michigan doesn’t recognize) and help avoid probate for real estate while potentially preserving Medicaid eligibility.
Q: Can I avoid probate with a small estate in Michigan?
A: Yes, Michigan offers simplified probate procedures for small estates. If the gross value of the estate after paying final expenses totals $15,000 or less, the probate court can order estate property transferred directly to a surviving spouse or lawful heirs through a streamlined process. Similarly, if an estate inventory shows no assets exceeding lawful exemptions (like homestead allowance, family allowance, and final illness expenses), the personal representative can distribute assets directly to beneficiaries without full probate administration.
Q: How are surviving spouses protected under Michigan law?
A: Michigan provides strong protections for surviving spouses. If a decedent leaves a will, the spouse can either accept what’s provided in the will or elect to take a statutory share equal to one-half of what they would have received under intestacy (reduced by half the value of non-probate assets they received). If there’s no will, the spouse receives the entire estate if the decedent had no descendants or parents. Otherwise, they receive $100,000-$150,000 plus a percentage (1/2 to 3/4) of the remaining estate, depending on whose descendants are involved.
Q: What happens if I marry after making my will in Michigan?
A: If you marry after executing a will in Michigan, your new spouse may receive a share of your estate as if you had died without a will (an intestate share), unless your will specifically contemplated the marriage. This means your spouse could receive a significant portion of your estate regardless of what your will states. To avoid unintended consequences, it’s important to update your estate planning documents after marriage to ensure they reflect your current wishes.