Do you have a plan in place in the event of a sudden disability or death? If you want to make sure all financial, estate or even end-of-life decisions will be taken care of, you should consider having an estate plan. Estate Planning is an essential process that should be done regardless of age, status, or wealth. Becoming an estate planner doesn’t have to be complicated, and the questions below will give you an idea of how to get started.
An estate plan considers the following elements: property management, beneficiaries, family’s financial well-being, probate court, guardianship of any surviving children, and medical treatment plan. When you are in a critical condition or after you pass away, this will enable your representative or the court to ascertain how financial and estate matters will be handled. Due to the complexity of the matter, most individuals who consider an estate plan would rather work with a legal professional, such as an estate-planning attorney or trust attorney to prepare and review their estate planning documents.
Below are several questions to ask yourself:
Do You Have Debts?
When you die and leave a huge amount of debt, your estate may be used to pay off debts plus estate taxes, instead of benefitting your intended beneficiary. To avoid that, get a comprehensive insurance policy to cover any debt you own such as a home insurance policy, car, or auto insurance.
Homeowners with dependents or a minor child should also consider a life insurance policy, especially when you expect to pay a high estate tax, as this helps keep the property for your heirs to enjoy fully.
Do You Already Have A Will?
In Michigan, not having a will grants authority to the state to distribute property and assets based on state laws. This won’t always align with your wishes or your family’s interest, especially when they will have to go through probate court. You should at least have a will, and appoint a trusted personal representative to take charge of your estate and ensure they get passed on to your heir.
Do You Want Your Family to Avoid Probate?
Although a Will is a document that any estate planner should have, it will not exempt you from the probate process. Probate is a legal process where family members appear in court and decide how to split the decedent’s estate. Since this can take years, probates can be very stressful especially for grieving relatives. These can be avoided by having living trusts. A Living Trust transfers your assets directly to your elected trust beneficiaries (such as a spouse, child, or parent) without having to go to court, thereby saving you from the stress, lengthy process, and probate court fees. Instead, your property titles are legally transferred to your Trust. So long as you live, you are the Trustee and have control of the properties. When you pass away, your successor trustee (which can be any family member you appoint) will simply transfer the contents of your trust to your appointed beneficiaries.
Do you Have Dependents?
Don’t second guess having an estate plan when you have minor children or a disabled child. Estate plans help ensure these groups are provided for financially, physically, and even emotionally through the designation of a legal guardian who can take care of them in case of your untimely death, or assist in managing inherited assets for them.
A Living Trust also allows you to hold off property distributions until a certain time such as a child’s age or milestone (e.g. graduation or getting a job, marriage) has been achieved. This adds a layer of protection to your valuable assets and ensures there won’t be losses over vices, substance abuse, debt problems, or divorce.
Have You Selected Your Beneficiaries?
Whether you decide to get a will, a trust, an insurance policy, or all of these, the names of your recipients should be 100% correct and up to date. If you’ve recently gone through a divorce, marriage, or re-marriage, it is especially important to contact an estate planning lawyer and check all of your estate plan designations.
Can Someone Handle Your Finances for You?
If you trust a certain individual, you can get a financial Power of Attorney which grants a person legal authority to handle your finances in case you become incapacitated or unable to make your own decisions. There are other types of powers of attorneys, such as a medical power that outlines your medical treatment decisions. However, exercise caution when you designate power to a person. Make sure this only happens when certain conditions are met.
Do You Have All Important Documents In A Safe Place?
Someone should be able to access your important documents, files, accounts, and even digital profiles (your login, password, email, portfolio) in case of emergencies. Leave instructions on what happens to your digital assets in these scenarios. You can even indicate how you want your remains to be handled, given that a funeral is often a huge expense. As for other estate planning documents, make sure to keep copies in a safe place where your appointed representatives know how to access the documents. You can compile these with any deeds, bank statements, and insurance policies to make things easier for your representatives.
Have You Consulted A Professional on Estate Planning?
If you answered NO, then it is not yet too late. You don’t need to spend money when consulting initially as there are estate planning law firms that offer free estate plan reviews. What your close friends decide to include in their estate plans won’t always work for you. Don’t risk your family’s future just because of the fear of spending on lawyer fees. Ask away, educate yourself, and think carefully about how you want to secure your future through an estate plan. Our Michigan estate planning attorneys are here to help you. Call us at Entrusted Estate & Asset Protection, PC.