National Estate Planning Awareness Week: An Important Reminder

National Estate Planning Awareness Week, which was adopted in 2008, occurs every year in October and provides an important reminder about making the effort to create an estate plan, or to review your plan if you already have one. An estate plan determines how your assets will be preserved, managed, and distributed after death. It also addresses the management of your property, financial obligations and medical care decisions in the event that you become incapacitated.

Estate Planning Is for Everyone

Estate planning is not just for the wealthy, and doesn’t have to be expensive. Good estate planning is often more important for families with more limited assets than the wealthy because of the high costs of not having a plan in place or having a plan that is not properly prepared. Many people put off estate planning because of the perceived cost. However, for a reasonable flat fee, an estate planning attorney should be able to provide you with a tailor-made plan that addresses your goals.

What if I Don’t Have an Estate Plan?

If you die without a valid estate plan, any real estate and/or assets without beneficiary designations are distributed according to Michigan’s intestacy laws, which typically involves court-supervised probate administration. If you are married and have children, both your spouse and children may each receive shares depending on the amount of assets which means that your spouse could receive only a part of the assets you want distributed to your spouse. If you have minor children, the court can control their inheritance and if both parents are deceased or incapacitated, the court may appoint a conservator or guardian without knowing whom the parents would have chosen.

An Estate Plan Begins With a Will or Living Trust

A will provides your instructions, but it does not avoid probate. A will only directs how your real estate and assets will be distributed. The assets must still go through the county probate court before they can be distributed to your intended beneficiaries. This can become expensive and may take up to a year or longer. Probate administration is also open to the public.

However, not everything you own will need to go through probate. Jointly-owned property and accounts with designated beneficiaries are not controlled by your will and will transfer directly to the beneficiary without probate. However, there are potential problems with joint ownership of property and using designated beneficiaries to avoid probate. For example, if the holder of an account dies, and there is a predeceased designated beneficiary listed on the account, an estate may have to be opened in probate court for the predeceased beneficiary to receive the assets. Also, if a minor is named as a designated beneficiary on an account and the holder of the account dies, the court may require a conservatorship for the child until the age of 18. This may be an unintended result, especially if the 18-year-old is not financially mature,

For these reasons, a revocable living trust is chosen by many families as part of their estate plan. A revocable living trust can:

• Avoid probate at death.
• Prevent court control of assets if you become incapacitated.
• Bring all of your assets together into one plan for distribution, including using a trust as the designated beneficiary on accounts.
• Provide privacy for your financial and personal affairs.
• Be changed by you at any time.
• Keep assets in your trust to be managed by the successor trustee you selected until your beneficiaries reach the age you want them to inherit.
• Protect the assets from beneficiaries’ creditors, spouses, and irresponsible spending.

The Best Time to Start Your Estate Planning Is Now

Making an estate plan avoids unnecessary expenses and can address potential 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 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 specific needs, particularly if there may be issues of competency or potential misunderstandings about how property is to be distributed after death. For a reasonable flat fee, you can put a plan in place now and change it later if circumstances change which is how estate planning works. Knowing you have a properly prepared estate plan in place will also give you and your family peace of mind.

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 for Financial and Property Matters, and Patient Advocate Designations. To schedule 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 our online contact form.