What is a perpetual trust?
A perpetual trust is a type of trust that does not expire, meaning it can continue for an indefinite period of time. It is commonly used in Michigan inheritance law when families pass down wealth from one generation to the next. This type of trust is designed to protect the assets of the trust by allowing the creator to control how long the trust should last and how the assets are distributed. The assets of the trust are managed by a trustee, who is responsible for protecting the interests of the beneficiaries. The most common type of perpetual trust is known as a “Generation Skipping Trust”. This type of trust skips over a generation so that the beneficiaries are at least two generations removed from the founder. This type of trust is often used when someone wants to ensure that their wealth is transferred from one generation to the next while avoiding hefty taxes and other legal problems. Perpetual trusts are also very popular in Michigan as a means to direct property to distant relatives, close friends, and other people who are important to the creator of the trust. For example, if someone wants to ensure their wealth is passed down to their grandchildren, they might set up a perpetual trust that sets limits on when and how the wealth is distributed. This ensures that the grandchildren get the wealth without having to wait for their parents to die. Overall, a perpetual trust is a type of trust that can last an indefinite amount of time, allowing the creator to limit how and when the assets are distributed to the beneficiaries. This type of trust is often used in Michigan inheritance law to pass down wealth from one generation to the next.
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