Trusts and Protecting Your Family: When and Why You Might Need One

Important Legal Disclaimer: I am Allan Volker, a licensed real estate professional with Coldwell Banker Realty, not an attorney. The information in this blog post is for educational purposes only and should not be considered legal advice. Always consult with a qualified estate planning attorney before making decisions about trusts or estate planning.

As your trusted real estate advisor in Southwest Michigan, I work with families every day who are building wealth through homeownership and property investment. Whether you’re buying your first home in St. Joseph or your third rental property in New Buffalo, one question often comes up during our conversations: “How do I protect what I’m building for my family?”

That’s where trusts come into the picture. While I can’t give you legal advice, I can share what I’ve learned from working alongside families and the estate planning attorneys I refer clients to regularly. Let me walk you through the basics of when and why you might need a trust to protect your growing assets.

What Exactly Is a Trust?

Think of a trust as a special container that holds your assets: your home, investment properties, bank accounts, or other valuables. You create rules for how these assets should be managed and distributed, both while you’re alive and after you’re gone.

There are three key players in every trust:

The Grantor (that’s you) – the person who creates and funds the trust
The Trustee – the person or institution who manages the trust according to your rules
The Beneficiaries – the people who benefit from the trust (usually your family members)

I’ve seen many Southwest Michigan families discover that trusts aren’t just for the wealthy. If you own a home here in Berrien County or have been building a real estate portfolio along the lakeshore, you likely have more assets than you realize.

When Should You Consider a Trust?

You Own Real Estate

If you own property in Southwest Michigan: whether it’s your primary residence in Benton Harbor or that lakefront cottage in Union Pier: a trust can help your family avoid the probate process. Probate can tie up property for months or even years, preventing your loved ones from accessing or selling real estate when they need to.

I’ve worked with families who inherited property that was stuck in probate for over a year. Meanwhile, they couldn’t sell, couldn’t refinance, and were responsible for maintaining a property they couldn’t legally control yet. A trust eliminates this problem entirely.

You Have Minor Children

Here’s a scenario I see often: young families buying their first home, building equity, and suddenly realizing they need to plan for the “what if.” Without a trust, if something happens to both parents, children would inherit everything at age 18.

Can you imagine handing an 18-year-old the keys to a $400,000 home in St. Joseph along with life insurance proceeds? A trust lets you set rules: maybe they get access to funds for education immediately, receive partial distributions at 25 and 30, and inherit the remainder at 35.

You’re in a Blended Family

Southwest Michigan has plenty of blended families, especially among the many professionals who relocate here from Chicago or other metropolitan areas. If you’re remarried and own property, a trust can ensure your current spouse is taken care of while still protecting your children’s inheritance from your first marriage.

You Want Privacy

Unlike wills, which become public record during probate, trusts remain private. If you own multiple properties or have significant assets, you might not want that information available for anyone to see at the courthouse.

Key Benefits of Trusts for Property Owners

Avoiding Probate

When I help families sell inherited property, those with trusts in place have a much smoother experience. The trustee can act immediately to maintain, rent, or sell the property without waiting for court approval.

Tax Planning

While I can’t provide tax advice, I can tell you that the estate planning attorneys I work with often discuss how certain trusts can help minimize estate taxes and provide other tax benefits for real estate owners.

Protection from Creditors

If you’re a business owner or work in a profession with liability risks, certain types of trusts can protect your real estate and other assets from potential creditors or lawsuits.

Control Over Distribution

You maintain control over how and when your assets are distributed. Maybe you want to incentivize education by providing larger distributions for college graduates, or ensure your beneficiaries are financially mature before inheriting property.

Common Southwest Michigan Scenarios

The Lakefront Property Dilemma

I work with many families who own beautiful lakefront properties in areas like New Buffalo or Stevensville. These properties often appreciate significantly over time, but they also come with high maintenance costs and property taxes.

A trust can help ensure these properties stay in the family while providing clear instructions for their management. Should the property be rented out to generate income? Sold and proceeds distributed? Used as a family vacation home with specific rules for scheduling? Your trust can spell all of this out.

The Growing Real Estate Portfolio

Some of my most successful clients have built impressive rental property portfolios throughout Southwest Michigan. A trust can help ensure these income-producing properties continue generating revenue for your family while avoiding the complications of joint ownership among multiple heirs.

The Family Business Property

Many Southwest Michigan families own commercial real estate tied to their business operations. A trust can help with business succession planning, ensuring the property remains available for family business use while providing clear ownership structure.

Types of Trusts to Discuss with Your Attorney

While I can’t recommend specific trust types, I can share what I commonly hear discussed:

Revocable Living Trusts are the most common type I see families use for basic estate planning and probate avoidance.

Irrevocable Trusts offer more asset protection and potential tax benefits, but you give up control of the assets.

Special Needs Trusts help families with disabled beneficiaries without affecting government benefits eligibility.

Charitable Trusts allow families to support causes they care about while potentially receiving tax benefits.

Working with the Right Professionals

As your real estate advisor, I can help you understand the property-related aspects of your estate planning, but creating a trust requires working with qualified professionals. I work closely with several excellent estate planning attorneys in Southwest Michigan who understand both the legal requirements and the unique aspects of our local real estate market.

I also recommend working with:

A qualified estate planning attorney
A CPA familiar with trust taxation
A financial advisor who can help coordinate your overall wealth strategy

Red Flags: When to Act Quickly

Based on my experience working with families, you should prioritize trust planning if:

You own multiple properties
You have significant equity in your primary residence
Your children are minors
You’re recently remarried
You own property in multiple states
You have concerns about potential family conflicts over inheritance

The Real Estate Connection

As someone who helps families buy and sell property throughout Southwest Michigan, I see firsthand how important proper estate planning becomes once you start building real wealth through real estate. Your home isn’t just where you live: it’s likely your largest asset and a key part of your family’s financial security.

I can help you understand the current value of your real estate holdings and work with you to develop strategies for building and protecting wealth through property ownership. But when it comes to protecting those assets through trusts and estate planning, you need qualified legal counsel.

Taking the Next Step

If you’re thinking about trust planning, don’t wait. The best time to create a trust is when you don’t need it yet: when you’re healthy, thinking clearly, and can make decisions without time pressure.

Remember: This information is educational only and not legal advice. Every family’s situation is unique, and trust planning involves complex legal and tax considerations that require professional guidance.

I’m here to help you understand the real estate aspects of your wealth-building and estate planning strategies. If you need referrals to qualified estate planning attorneys or have questions about your property’s role in your overall financial plan, I’m always happy to help.

Your family’s financial security and peace of mind are worth the investment in proper planning. Let’s make sure the wealth you’re building through Southwest Michigan real estate is properly protected for the people you love most.

Ready to take the next step in protecting your family’s future? Contact me and I can connect you with the right professionals to get started.