In this article, you will learn:
- Common trusts and their purposes
- Why estate plans are not only good for you after you pass
- Critical documents to include in every plan
- How an attorney can help
Estate planning is arranging for the disposition and management of one’s estate at death using wills, trusts, insurance policies, and other devices. Anyone over the age of eighteen can use estate planning. People often forget that when their child turns 18 years of age, parents can no longer legally receive information regarding their child. For example, when a child goes off to college and they want access to the child's medical records or the child wants mom to call and get information, they are not able to do that without a power of attorney in place. Young families can use estate planning to nominate who will raise their minor children by nominating a guardian, and who will manage the children's finances by nominating a conservator. Estate planning can also be used to avoid probate, plan for your assets after death, and help to shift tax liability at death.
How An Estate Plan Can Assist During Your Lifetime
Estate planning can help you while you are alive. The power of attorney for financials, power of attorney for healthcare, advance directive, or living will are all documents that help others make decisions for you while you are still alive but are no longer able to make those decisions for yourself for whatever reason.
The Most Important Documents That Should Be A Part Of Everyone’s Estate Plan
Important components of an estate plan should contain the main documents, such as a trust or living will and a last will and testament, power of attorney for financials, power of attorney for healthcare, final disposition directions, and end-of-life nominations.
Wills And Their Uses In Michigan Explained
A last will and testament is a legal declaration to legally execute wishes regarding the disposal an estate after death. A will can be enough on its own accord, but it also can be disastrous under certain circumstances. When doing an estate plan, it is vitally important to meet with an experienced attorney and have them take the time to discuss your circumstances specifically. Additionally, last wills and testaments do not avoid probate, a common misconception. So, it is important to evaluate other ways around probate or the necessity of a trust.
Common Types Of Trusts In Michigan
A trust is an arrangement in which someone's property or money is legally held or managed by someone else or by an organization, such as a bank, for a set period of time. Often, our clients, when they are doing their trusts, they are also the trustees in making those decisions; it is like a separate entity, but they are still making the decisions for their money until they can no longer do so. The most common types of trust that we use here in Michigan are the revocable trust, which allows the parties to have full power over their assets; they can revoke it, they can amend it, they can change it at any time. Then there is the irrevocable trust, which is sometimes used for Medicaid planning. They put property or assets into an irrevocable trust, and then they are not allowed to amend that trust or revoke that trust unless certain circumstances are present at the onset of execution like fraud.
We also do special needs trusts. Special needs trust are trusts that help clients who have either children or somebody else that they care about that they want to give money to, but that person receives state funding. With state funding, if they inherit over a certain amount, they can be kicked of state funding and loose vital resources. To avoid this scenario, the grantors put money into the special needs trust so that only a certain amount hits their bank account at certain times. In Michigan we also use a QTIP trust, a Totten trust, and a Bypass trust as well.
How Often To Review And Update Estate Planning Documents In Michigan
I would recommend reviewing your estate plan every year at the first of the new year to make sure everything is still in accordance with your life circumstances. Children turn eighteen, people marry, people divorce, people die, and it helps to ensure that your assets are going in the same direction as your vision.
Why To Hire A Michigan Estate Planning Attorney
If you are resident of Michigan, I strongly advise using a Michigan attorney to draft your estate plan. If you are a resident of Florida, I strongly advise you use a Florida attorney to draft your estate plan. I do not think online estate planning services are necessarily a good option for everyone. When you are doing online questionnaires and you are not sitting down to have a conversation with the attorney, a software program is not necessarily going to ask you the right questions that might flag a potential problem for your case, whereas an attorney would be able to catch the potential snag in their initial consultation with you.
For more information on Estate Planning Process In Michigan, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (616) 681-4042 today.
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