Estate Planning Is Essential For Everyone — Not Just Wealthy People
Many people think that estate planning is only necessary for people who have a lot of money and assets. That myth could not be farther from the truth. Estate planning is essential for everyone.
What Is Estate Planning?
Estate planning is commonly understood as the process of providing for orderly distribution of your property following death. People often do not realize that estate planning also serves the equally important purpose of protecting you and your family during your lifetime in the event you become legally incapacitated temporarily or permanently.
The risks posed by Covid-19 affect us all in ways we never could have anticipated. Unfortunately, those risks will continue for some time, even if a vaccine is found. For everyone, the coronavirus makes planning for incapacity more critical and essential than ever.
What Happens If You Don’t Have an Estate Plan?
If you don’t create an estate plan, there are a number of adverse consequences. First, Michigan state law determines who receives your property after death. That means the people you want to benefit from your estate may not do so.
Without an estate plan in place, someone will have to apply to the court to administer your estate. It may not be the person you would choose. There may even be family disagreement about which member should have the responsibility. Your estate likely will have to go through probate, which results in unnecessary court costs, legal fees, and time delays.
If you don’t have documents naming the people to be responsible for your personal and medical care and finances in the event you become incapacitated, someone must apply to the court for appointment as your guardian and conservator. The people that a judge appoints to those critical positions may not be the individuals that you would want to take care of you and your money. The time delays and costs of these proceedings may have significant adverse impacts on your living conditions, comfort, health, and finances as well.
When you put an estate plan in place, you avoid all these potential negative effects. You and your family members gain the peace of mind knowing that you and they are in the best possible position to face potential future circumstances.
What Documents Are in Your Estate Plan?
Each estate plan is as unique as the person who creates it. Working with an experienced estate planning attorney ensures that your estate plan takes all your circumstances into account and reflects your specific needs and goals. Some documents are part of most estate plans, but they are always tailored by your lawyer to fit your own situation.
Your Durable Powers of Attorney
Your durable powers of attorney are the essential documents that protect you and your family in the event you become legally incapacitated. There are two different durable powers of attorney in an estate plan.
In your durable power of attorney for health care, also called your patient advocate designation, you name a trusted family member or other individual to make your medical decisions if you become unable to make them yourself. In your patient advocate designation, you also may express your wishes concerning medical treatment and end-of-life care.
In your durable power of attorney for property and financial matters, you designate a trusted family member or other person to make financial and property decisions on your behalf, if you become incapacitated. Your agent in the financial power of attorney may be the same person that you name in your health care power of attorney, or it may be someone different.
Choosing the right people as your agents in your durable powers of attorney is extremely important. Your estate planning attorney helps you make certain that the people you name are the best choices for the responsibilities of each position.
Your Last Will and Testament
Almost every estate includes a Last Will and Testament (commonly called a will) that serves as the document to provide for orderly distribution of your property following your death. In some cases, a will is the only document you need to address property distribution. In other cases, you may wish to add a trust, which can avoid probate and allows you to control how money and property is distributed over time, rather than giving it outright to a beneficiary in a will. Adding a trust is an important consideration if you have minor children or a beneficiary who cannot manage a monetary distribution.
Are You Ready to Make Your Estate Plan?
Making an estate plan avoids unnecessary costs and expenses, time delays, and family disharmony after your death. It also makes certain that your property ends up where you want it to be when it’s no longer yours. That’s true regardless of how many assets you have. An estate plan also makes certain that someone can take care of you and your finances if you become incapacitated. That goal is totally unrelated to wealth.
When you’re ready to make your estate plan, it’s essential that you talk with an experienced estate planning attorney. Using forms or online services is full of risks. A do-it-yourself approach can completely defeat the purposes of making an estate plan. It can even put you and your family in a worse position than if you didn’t do anything at all.
Schedule a Consultation with an Experienced Ann Arbor Estate Planning Attorney
In my practice at Ager Law Office, I help individuals and families with all aspects of estate planning, including wills, financial durable powers of attorney, patient advocate designations, and trusts. From my Ann Arbor office, I serve clients throughout Washtenaw County. To talk with me about a new estate plan or updating your existing plan, call (734) 649-0784, send an email to email@example.com, or use the online contact form.