What Are the Elements of a Basic Estate Plan?
As both we and our loved ones get older, we want to make sure that there are plans in place for the future. Plans that include how our property and assets are managed while we are alive and then distributed after our death. This means putting a basic estate plan in place that covers all of your interests and ensures that the ones you love will be cared for.
Basic Estate Planning Tools
A Will is a basic estate planning document to make sure your assets are distributed according to your instructions. It also avoids the distribution of your assets according to Michigan law of intestate succession which directs how a person’s assets are distributed when he or she dies without a Will. A Will also permits a person to appoint a Personal Representative to make sure distributions of property and assets are made according to their instructions after their death. A Will also permits a person to nominate a guardian and conservator for minor children and identifies who will take control of funeral arrangements.
However, a Will does come with some drawbacks. A Will offers limited control over the distribution of assets and involves administration through the probate court which is a matter of public record. Although depending on the circumstances, informal probate administration without court hearings may be available for a Will, probating a Will is supervised by the probate court and can be costly and a drawn-out process. In addition, Wills don’t go into effect until after a person’s death.
Revocable Living Trust
A Revocable Living Trust offers greater control over how a person’s assets are managed and distributed both during their lifetime and after death. A Trust takes effect as soon as you sign the Trust document and is intended to have an impact while you’re still living as well as after death. Provisions in a Living Trust typically address not only how you want your assets distributed upon your death, but also how you want your assets to be used for your care if you become incapacitated and lack the sufficient mental capacity to take care of yourself and manage your day-to-day affairs.
Another advantage of the Revocable Living Trust is that as the Grantee (the person who makes the trust) and the initial Trustee of the Trust, you maintain total control over the trust assets during your lifetime with the ability to transfer assets in and out of the Trust. You are also able to amend or even revoke the Trust during your lifetime. However, after your death the Trust and your instructions for distribution of the Trust assets becomes irrevocable.
Durable Power of Attorney for Property and Financial Matters
A Durable Power of Attorney for Property and Financial Matters is another essential document for a basic estate plan that protects a person and their family. In the Durable Power of Attorney document, a person designates a trusted person, usually a spouse or family member, to make financial and property decisions on the person’s behalf. The Durable Power of Attorney can be effective immediately at the time of signing the document or can be made effective in the event the person becomes incapacitated and unable to manage their day-to-day affairs. The Power of Attorney usually includes a provision that a person’s incapacity is to be documented by a licensed physician.
Patient Advocate Designation/Durable Power of Attorney for Health Care
A Patient Advocate Designation, which can also be referred to as a Durable Power of Attorney for Health Care, is another essential document for a basic estate plan. In a Patient Advocate Designation, a person designates a trusted person, usually a spouse or family member, to make health care decisions in the event they are incapacitated and unable to make decisions on their own behalf. The decisions can include both medical and mental health care decisions. Most importantly, the Patient Advocate document allows a person to include written instructions for end-of-life care if they are in a coma and have no likelihood of recovery.
Choosing the right persons for a Durable Power of Attorney for Property and Financial Matters and for a Patient Advocate Designation is a very important decision and should be discussed with the person who is being considered for appointment. Note that both the Durable Power of Attorney and the Patient Advocate Designation requires the appointed person to sign an acknowledgment that they accept the responsibilities given to them.
Are You Ready to Make Your Basic Estate Plan?
Making a basic estate plan avoids unnecessary costs and expenses, time delays, conflicts and family disharmony. It also makes certain that property and assets end up where a person wants it to be. That’s true regardless of how much property and assets a person has. Making a basic estate plan also helps to ensure that a person you choose will be the person who will take care of you and your finances if you become incapacitated. That is an important goal during a person’s lifetime.
When you’re ready to make a basic estate plan or review the estate plan that you currently have in place, 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 purpose of making an estate plan that fits your needs, particularly if there may be issues of competency or misunderstandings about how property is to be distributed after death.
Create a Basic Estate Plan with the Help of an Experienced Estate Planning Attorney
At Ager Law Office, Bill Ager helps individuals and families with all aspects of estate planning, including Wills, Trusts, Property and Financial Durable Powers of Attorney, and Patient Advocate Designations. The Ann Arbor office serves clients throughout Washtenaw County. To talk with Bill about scheduling a free consultation for a basic estate plan or for updating your existing plan, call (734) 649-0784, send an email to email@example.com, or use the online contact form on this website.