If you do not have a Last Will and Testament or an estate plan, your family and loved ones will likely encounter problems when you die — and possibly during your lifetime as well. Some of those problems may not be easily resolved. They can create tension in family relationships and lead to an outcome completely inconsistent with your intentions.
A Will provides answers to issues that arise after your death. A complete estate plan does even more — it avoids problems both after your death and during your lifetime.
If you die without a Will or estate plan, referred to as dying intestate, Michigan laws of intestate succession determine who gets your property. Those laws can result in unexpected consequences that are entirely contrary to what you want to happen. In contrast, if you make a Will or estate plan, you decide who gets your property and make certain all your wishes are implemented.
If you die without a Will, Michigan laws dictate who receives your property. They establish an order of priority that is based on which of your relatives survive you.
A surviving spouse has the highest priority, but if you have surviving children, parents, or grandchildren, your spouse does not receive your entire estate if the value exceeds a statutorily-set amount. If you do not have a surviving spouse, your surviving relatives inherit your estate in a priority order, based on their relationship to you.
If you have loved ones who are not related to you, they receive nothing if you die without a Will or estate plan. The same thing is true if you have charities or non-profit organizations that you want to receive your property. Under the law, if you have no surviving relatives within a certain degree of kinship, your property goes to the State of Michigan — not to an unrelated person or charity.
If you die without a Will or estate plan, any property and assets you own solely in your name are probate assets, subject to probate and distribution under the laws of intestate succession. Assets that are jointly owned or have a designated beneficiary (like retirement accounts and life insurance policies) are non-probate assets. They go directly to the co-owner or beneficiary and are not subject to probate or distribution under the laws of intestate succession.
If you have only a Will, the property distributed to beneficiaries in your Will also goes through probate. However, if you create an estate plan with assistance from an experienced estate planning lawyer, it often is possible to avoid probate completely. That is just one of the significant differences between a Will and an estate plan. You can learn more on that subject by reading my blog post on the difference between a Will and an estate plan.
Property distribution is not the only problem that arises if you do not make a Will. Provisions in your Will explain your wishes about final arrangements and name the person to make them, designate an executor (personal representative) for your estate, and designate individuals to care for minor children and their finances as guardians and conservators.
In the absence of a Will, all those issues are governed by Michigan law. That can give rise to family disagreements, which can tear a family apart and ruin relationships that took a lifetime to build. It can also result in outcomes you would not want.
Even if you have a Will, your family still may face difficult issues during your lifetime. If you create a complete estate plan, you avoid those issues altogether. That is one of the most important reasons why everyone should have an estate plan, rather than just a Will.
If you become incapacitated during your lifetime, someone has to take care of your personal needs (including making medical decisions) and your finances. Under Michigan law, no one can assume those responsibilities in the absence of either: 1) a written and valid durable power of attorney for finances and property matters along with a written and valid durable power of attorney for health care (usually referred to as a Patient Advocate Designation) that you executed prior to incapacity, or 2) court orders naming a guardian and conservator for you.
Durable powers of attorney for health care and finances are part of a complete estate plan. They are not part of a Will.
If you become incapacitated and do not have those documents in place, a family member or loved one must ask the court to appoint a guardian and conservator for you. That is the only way that individuals can have the legal authority to care for you and your finances.
The judge may appoint individuals to care for you and manage your finances whom you would not want to have those responsibilities. In addition, the court proceedings consume both time and money. They also can cause considerable family disruption and are totally unnecessary if you put a complete estate plan in place before you become incapacitated. (It is not possible for you to resolve the issues after you are incapacitated.)
You can avoid all the problems discussed above by talking with a knowledgeable estate planning attorney and creating your estate plan. It is never a good idea to use forms or an online service to make a do-it-yourself (DIY) estate plan. Going that route can create serious problems for you and your family.
The best solution is to take the time to protect your assets, your family, and yourself by creating a careful estate plan with assistance from an experienced estate planning attorney.
In my practice at Ager Law Office, I help individuals and families with all aspects of estate planning, including wills, trusts, durable powers of attorney, and patient advocate designations. From my Ann Arbor office, I serve clients throughout Washtenaw County. To talk with me about a new estate plan or about updating your existing plan, call (734) 649-0784, send an email to firstname.lastname@example.org, or use the online contact form.