Starting an Estate Plan in Michigan

Estate planning is for everyone. It provides a method for an orderly distribution of your assets and property following death and also serves the equally important purpose of protecting you and your family during your lifetime in the event you become incapacitated, whether temporarily or permanently.

After evaluating the consequences of your incapacity and death, if you are thinking about starting an estate plan, there are certain steps you can take before talking with a qualified estate planning lawyer.

Step 1: Take Inventory of Your Assets

When starting your estate plan, organizing information about your assets as well as your obligations is extremely important. Create a list of your financial accounts, including bank accounts, retirement accounts, and real estate. Confirm how your financial accounts and real estate are titled and whether the accounts have designated beneficiaries. You should also include any business interests you have as well as the estimated value of your personal property.

Step 2: Consider Your Estate Planning Goals

Most individuals consider estate planning for the purpose of taking the burden off their loved ones of handling their estate following death and to ensure that the distribution of assets and property are carried out in an orderly and efficient manner. Many individuals also consider estate planning because they want to protect their family should they become incapacitated due to an accident or illness, and are unable to make health care and financial decisions.

By considering what your estate plan should accomplish, you can effectively consult with a qualified estate planning attorney about an estate plan that is tailor made for your circumstances.

Step 3: Consider Who to Designate as Your Beneficiaries and Fiduciaries

This step involves considering the persons you will name as the beneficiaries of your estate to receive your assets and property after death. Just as important is to consider persons who you will be appointing as your fiduciaries to manage and carry out your estate plan. An appointed fiduciary will have the duty and legal responsibility to follow your instructions and act in your best interest. Consequently, a fiduciary should be a trusted person who you can rely upon. In an estate plan, fiduciaries include personal representatives, sometimes referred to as executors, and trustees who carry out a person’s instructions in a Will or Trust. Fiduciaries also are appointed to manage a person’s property and financial matters and to make health care decisions if a person becomes incapacitated, which basically means when you are mentally impaired by accident or illness to the extent of lacking sufficient understanding or capacity to make or communicate informed decisions.

Step 3: Documents to Consider for Your Estate Plan

A qualified estate planning attorney can be an invaluable resource in this step of starting your estate plan because each estate plan document should reflect your specific needs and goals given your current circumstances. The following documents are included in most estate plans.

Will

A Will is a basic estate planning document to make sure your assets are distributed according to your instructions and not according to Michigan law of intestate succession which directs how a person’s assets are distributed when he or she dies without a Will. However, a Will does come with some drawbacks. For example, a Will offers limited control over the distribution of assets and requires that it be administered through the probate court which is a matter of public record. Probate administration of a Will is supervised by the probate court and can be costly and a drawn-out process. However, depending on your circumstances and how your assets and property are titled, a Will may be all you need as a backup for the distribution of your assets and property.

Revocable Living Trust

A Revocable Living Trust offers greater control and flexibility over how a person’s assets and property are managed both during their lifetime and 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.

Another advantage of the Revocable Living Trust is that you maintain total control over the trust during your lifetime and are able to amend or even revoke the trust during your lifetime. However, after your death the trust, along with your distribution instructions in the trust, become irrevocable. A trust is also a private document, avoids probate administration and can be used to distribute assets to minor children over a given time frame if the parents are deceased.

Durable Power of Attorney for Property and Financial Matters

A Durable Power of Attorney for Property and Financial Matters is an essential document for a basic estate plan. In the Durable Power of Attorney document, a person designates a trusted individual as their fiduciary to make financial and property decisions on the person’s behalf. The document can be effective immediately at the time of signing or can be made effective in the event the person becomes incapacitated and is unable to manage their day-to-day affairs.

Patient Advocate Designation

In a Patient Advocate Designation, a person designates a trusted person as their fiduciary to make health care decisions in the event they are incapacitated and unable to make decisions on their own behalf. Most importantly, the Patient Advocate document allows a person to include written instructions for end-of-life care.

Are You Ready to Start an Estate Plan?

Having an estate plan avoids unnecessary costs and expenses, time delays, conflicts and family disharmony. That’s true regardless of how much property and assets a person has. When you’re ready to start an estate plan or review the estate plan that you currently have in place, it’s essential that you talk with a qualified 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 potential misunderstandings about how property is to be distributed after death.

Schedule a Free Consultation with Ann Arbor Estate Planning Attorney Bill Ager

In my practice at Ager Law Office, I help individuals and families throughout Washtenaw County with all aspects of estate planning, including Wills, Trusts, Durable Powers of Attorneys, and Patient Advocate Designations. To talk with me about scheduling a free consultation for a new estate plan or for updating your existing plan, call (734) 649-0784, send an email to bill@agerlawoffice.com, or use the online contact form on this website.