The ongoing outbreak of novel coronavirus COVID-19 has spread concern and uncertainty around the globe. The pandemic has also underscored the vital importance of looking to the future, and planning ahead for whatever may come your way. As a result, many people here in Michigan and across the country are considering the necessity of estate planning for themselves and their loved ones.
In good times and in bad, estate planning is a way to prepare for whatever the future may hold. Having an estate plan in place is a way to keep control of your most important assets, and have a say in the matters that will directly impact the people you care about.
There are a variety of tools — including wills, trusts, and powers of attorney — that can help ensure you can maintain control, even when you are gone or otherwise unable to speak on your own behalf. Which instruments you use will depend on the specifics of your circumstances.
The Importance of Estate Planning
There are a lot of myths and misconceptions out there about estate planning, including the idea that only wealthy or elderly people need to worry about such matters. In reality, estate planning can have significant benefits whether you are single or married, working or retired, enjoying parenthood or planning to remain childconsultation.
The COVID-19 situation is a powerful reminder that everyone, regardless of their circumstances, should plan for the potential for serious illness and incapacity. Failing to adequately plan can cause confusion, stress, loss of control, and financial setbacks for your family and friends. Without an estate plan, you are leaving things up to chance and the strict control of Michigan’s probate courts.
On the other hand, taking time to prepare for the future can make a difficult transition significantly easier for your loved ones, while providing you with peace of mind that your wishes will be carried out. Estate planning is a powerful opportunity to:
Distribute Your Assets in an Appropriate Manner
Whether you want to decide who gets your home or pass down a precious family heirloom, preparing an estate plan can allow you to distribute your assets in the manner that you wish when you are no longer around – while also ensuring that someone you can rely on is appointed to handle your assets and affairs.
If you do not plan ahead for the distribution of your assets as part of your estate plan, the decisions for who will receive your property and administer your estate fall to the Michigan courts, and out of your control.
In other words? If you don’t make a plan, the state of Michigan will make a plan for you — and that may ultimately mean that your assets will be distributed in a way that does not account for your unique personal circumstances and goals.
Protect Your Children and Beneficiaries
If you have children in your care, an important estate planning consideration will be naming a guardian who will protect and raise them if you are unable to do so. Your estate plan can also make provisions for your children’s financial future — from appointing someone to help manage their finances until they come of age, to creating a trust that can help ensure that their inheritance does not become a detriment. In addition to your children, you can set up your estate plan to help provide care and support for all of the most important parties in your life, including your partner, adults or minors with special needs, and even your pets.
Minimize Family Disagreements and Conflicts
Losing a family member is a difficult and stressful time even under the best of circumstances. It can be made all the more fraught when family arguments and disagreements crop up.
Estate, will, and trust contests often put family members in opposition to each other, which can drag out the estate administration process and become expensive and emotional for everyone involved. Taking steps to prepare a thorough and comprehensive estate plan can help prevent disagreements among family after you’re gone, making this tough transition easier for them to navigate — while also giving you peace of mind right now, knowing that you minimized the burdens for your loved ones in the future.
Direct How You Will Be Treated If You Become Incapacitated
Estate planning is not just about thinking about what will happen after you’re gone; it is also about setting down guidance for when you are unable to speak on your own behalf due to incapacitation.
While it can be unpleasant to think about, it is important to plan ahead for the very real possibility of becoming incapacitated. Every day, people fall victim to unexpected accidents and the threat of critical illness. These unfortunate situations can be incredibly difficult for your loved ones, and may call for quick thinking and immediate action.
Preparing for incapacity can help ensure that you get the care you need, while putting safeguards and supports in place for your loved ones. In contrast, if you do not plan ahead for incapacity, you will not have any say in who will make financial or health care decisions for you, and your loved ones may be subject to the arduous process of the “living” probate process.
Save Time, Money, and Stress by Avoiding Probate
“Probate” is often used as a catch-all to refer to the court process through which a person’s property is gathered and distributed after they pass away. Depending on your circumstances, the probate process can either be long and arduous or quick and painless. Even in the best of circumstances, there are monetary and time costs associated with probate, which can quickly become significant.
Having a comprehensive estate plan in place can help simplify and streamline probate for your estate, allowing you to:
- Maximize the assets available to your beneficiaries when you have passed
- Minimize or eliminate the cost of probate fees
- Provide for immediate distribution of your assets
Estate Planning Tools to Consider
Considering the importance of estate planning — and what steps you can take to move this meaningful process forward?
It’s crucial to understand the tools and mechanisms that can be used to help direct your assets, provide for your loved ones, and dictate your financial and health care decisions in case of incapacitation.
Wills.
A will is a valuable estate planning tool, and one of the most cost-effective ways to plan for the distribution of your estate. A will gives you the ability to control the distribution of your assets after you’ve passed away; nominate a someone you trust to handle your affairs in the probate court; nominate a guardian to handle the care, custody, and control of your minor children; and nominate a conservator to handle the financial affairs of your minor or incapacitated adult loved ones.
Wills can be helpful in establishing a long-term distribution set-up for your loved ones. A will can also provide clarity that can prevent family disagreements and minimize the potential for contests, which can help facilitate and streamline the probate process.
In short: When executed properly, a will can help ensure that your children and property will be handled in the manner that you decide is best.
Interested in learning more about wills? You can read on with our handy FAQ, available here, or explore some common scenarios and stories relating to wills, here.For that matter, why not just give us a call to discuss at (833) 469-4897.
Trusts.
A trust is a legal arrangement, created by a settlor or grantor, that names an individual who is responsible for managing property as directed by the trust agreement. This person is known as the trustee.
A trust can be an important supplement to an estate plan. Along with a will, a trust can help your estate avoid lengthy probate issues. Trusts can also be used to protect the assets in your estate from certain taxes and fees, which can leave more for your chosen beneficiaries. There are different types of trusts that can be used to suit your needs, depending on the specific variables of your situation. Consulting with an experienced probate and trust attorney can help you assess your estate, consider your options, understand the benefits of establishing a trust, and ensure that all legal formalities are addressed.
Want to read more? You can continue exploring trusts with our FAQ page, here. To read additional stories and perspectives, click here. For that matter, why not just give us a call to discuss at (833) 469-4897.
Powers of Attorney.
In broad terms, a power of attorney is a written instrument that gives legal authority to a third party (known as the agent or advocate) to act on the behalf of someone else (the principal). In estate planning, these tools are used to ensure someone you trust manages your financial and health care decisions when you no longer can.
For estate planning purposes, it is imperative that the power of attorney used can be classified as a “durable” power of attorney. In short, this classification allows your agent to act even if you become incapacitated. There are several different types of powers of attorney to consider, including:
- Durable Power of Attorney for Finances. A durable financial power of attorney gives your chosen agent the right to handle your financial affairs if you become incapacitated and unable to manage them. Having a durable financial power of attorney can help provide assurance that someone you trust, not a court-appointed conservator, is appointed to handle your financial affairs, including selling property, transferring assets to a trust, and pursuing claims or actions on your behalf. This can help keep your financial affairs private and keep your loved ones out of the living probate system.
- Durable Power of Attorney for Health Care. A durable health care power of attorney gives someone of your choosing the right to handle your health care decisions in the event that you become incapacitated. This can help ensure that someone you trust, not a court appointed guardian, is appointed to handle your health care and end-of-life decisions, while keeping matters private.
- Durable Power of Attorney for Mental Health Care. A durable power of attorney for mental health care is a legal document that gives someone of your choice the right to handle your mental health care decisions if you become incapacitated. You don’t give up control while you still have the ability to decide for yourself.
There are many important considerations when executing a power of attorney, from choosing your agent to determining the powers that he or she will be granted to act on your behalf. Consulting with our experienced attorney Dean E. Patrick can allow you to review any power of attorney documents you already have in place, and set down additional protections for the future.
Interested in learning about some experiences where powers of attorney may come into play? You can read about some common situations and scenarios here, or explore our FAQ page, here. For that matter, why not just give us a call to discuss at (833) 469-4897.
Our Offices Are Here to Help, Remotely
In these uncertain times, don’t put off taking care of those you love and that which you have worked hard for. Estate planning is a meaningful way to take action — and it is a process that you can begin right now, from the safety and security of home.
Here in Michigan, our Governor has issued an executive order making electronic signatures and remote notarizations acceptable during the COVID-19 pandemic. This allows for no-contact executions, making it possible to update your estate planning documents while maintaining healthy social distancing practices. You can read the full text of that E.O. here.
Looking for guidance on the many moving pieces that go into successful estate and incapacity planning, including wills, trusts, powers of attorney, guardianship, and conservatorship? Your Michigan probate attorney Dean E. Patrick is here to help.
Mr. Patrick is a licensed Michigan lawyer specializing in probate law. He has helped hundreds with their estate planning needs, giving him the necessary knowledge to provide unparalleled legal advice and assistance that can make your life a little easier.
If you have questions about any type of estate planning tools or techniques, contact our offices at (833) 469-4897 or get in touch online to set up your initial consultation on all matters relating to estate planning.
