Estate Planning to Avoid Family Conflict

One of the primary purposes of having an estate plan in place is to avoid the potential for family conflict after death. A minor disagreement may involve who is to handle the funeral and burial arrangements for a deceased family member. A more serious dispute could involve deciding who is responsible for managing and distributing the assets of an estate or who cares for minor children if both parents are deceased.

The most basic estate plan for avoiding family conflict after death includes a Will and, in many cases, a Revocable Living Trust. These documents work together to provide controls for the management and distribution of property, to identify the recipients of the deceased’s assets and to appoint trusted persons to carry out key roles for estate and trust administration.

Choosing Who Will Carry Out Your Plan

The appointment of trusted persons to carry out key roles in estate and trust administration is a critical part of an estate plan. Choosing these appointments yourself can help avoid any conflict within the family about who ends up with which responsibility. Creating a proper estate plan includes choosing:

• A Personal Representative (Executor) who is responsible for managing an estate and distributing the Estate’s assets according to your instructions.
• A Guardian who cares for children if both parents die while a child is a minor.
• a Conservator who manages assets and property of children if both parents die while a child is a minor.
• A Trustee, who manages and distributes trust property according to the instructions of the Trust document.
• A person to make funeral and burial arrangements which may include whether you are cremated and what happens to your cremated remains or if you are interred and where.
• If you own a business, who will own and control the business and how it will be run.

If you do not have a basic estate plan in place and die without a Will (referred to as dying “intestate”), the Michigan’s intestacy laws and the probate court will determine who will be appointed to the key roles for managing and distributing your assets, as well as caring for your minor children. The intestacy laws also dictate to whom your estate assets and property are distributed. This can be a source of major family conflict.

In Michigan, intestacy generally results in distributing estate assets to a spouse and children, or other related persons if there is no spouse or children who survive the deceased. Note that if a child or other related person who receives estate assets is a minor, all assets received will be given outright when the child turns 18, which may not be desirable or in the best interest of the child.

Without an estate plan in place, the probate court is allowed to appoint a person to serve as the Personal Representative of your estate based on how closely they are related to you. This may have unintended consequences. For example, a spouse may be the court appointed Personal Representative to an estate where assets are to be managed and distributed to unrelated children or family members who are estranged from the spouse. In addition, a situation could arise where a probate court appoints a child as Personal Representative of a parent’s estate even though the child is estranged from their parent.

Clearly, there is a real potential for poor outcomes and unintended consequences when there is no estate plan in place, particularly in the context of blended families and families that have existing or potential conflicts between family members. Having a complete estate plan in place that clearly states your wishes can be a saving grace when it comes to avoiding family conflict following your passing.

Assets Not Impacted by Intestate Laws

It is important to remember that intestate laws apply only to assets that must pass through probate when there is no Will or property held in a Living Trust. Other assets that are not affected by intestate laws include:

• life insurance proceeds with named beneficiaries
• retirement accounts with named beneficiaries
• bank or financial accounts held as payable-on-death to named beneficiaries
• property jointly owned with someone else or that is owned with a spouse.
• real estate held as an enhanced life estate (lady bird deed)

These assets will pass to the surviving co-owner or to the named beneficiary, whether or not you have a Will or Living Trust. However, it is important to understand that if you don't have a Will or Living Trust and none of the named beneficiaries are alive to take the property, then the property could end up being transferred according to intestate succession laws.

An Estate Plan May Also Help Avoid Family Conflict While You Are Still Alive

While many of the reasons for having a Will and Living Trust focus on what happens after you die, there are also important reasons to have an estate plan for what happens when you are still alive. A basic estate plan includes having a Durable Power of Attorney in which you appoint trusted persons to take care of your financial, business, and personal affairs according to your wishes in the event you become incapacitated for any reason. Without a Durable Power of Attorney in place, your family could end up going through court hearings to appoint a guardian or conservator to make decisions on your behalf if you are incapacitated.

Another important document to have in place when you are alive is a Patient Advocate Designation in which you appoint persons to make medical decisions on your behalf if you are incapacitated and unable to make decisions. This document also allows you to provide specific instructions about end-of-life care decisions in cases where you are in an irreversible coma without any reasonable likelihood of recovery.

A properly drafted estate plan will make sure your property ends up benefiting those you wish to benefit after your death and will also make sure your instructions are in place for your care while you are alive.

Schedule a Free Consultation with a Respected Ann Arbor Estate Planning Attorney.

Ager Law Office helps individuals and families with Wills, Trusts, Durable Power of Attorneys, Patient Advocate Designations and all aspects of estate planning. From our Ann Arbor office, we serve clients throughout Washtenaw County.

For additional information on our reasonable flat fees for Wills, Trusts and other Estate Planning services, or about updating your existing estate planning documents, contact our experienced estate planning attorney, Bill Ager, for a free consultation.

• Call (734) 649-0784
• Send an email to bill@agerlawoffice.com

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