Top Reasons Why Everyone Needs an Estate Plan
Many people in Michigan think estate planning, wills and trusts are mostly for “wealthy people“. But that just is not true. If you have a home, business, family, savings or investments, there are dozens of reasons why having an estate plan in Michigan is important. It all boils down to these two top reasons why everyone needs an estate plan in Michigan no matter how much money you have.
Reason #1: Legal Action Against You
These days, the threat of getting sued by someone is real. A lawsuit or judgment against you may affect your assets, no matter what their value. Obviously, the more you have, the bigger of a target you are to those looking to sue, but even those of modest means can be hit with a lawsuit.
Legal action can come from many sources – creditors, business partners, customers, competitors, employers, neighbors, government agencies, even family members. Anyone who thinks you did them wrong, may sue you to try to either cash in or punish you. So, when we talk about protecting your assets while you are alive, we are primarily referring to people trying to attack your assets with lawsuits.
How do you protect your assets from lawsuits?
Establishing a comprehensive estate plan will include in most cases a living trust. Called a living trust because the trust is established and in effect while you are alive. A properly drafted living trust offers a high degree of protection from creditors and those looking to sue you.
When you establish a trust and transfer your assets into it, you are creating a separate legal entity from yourself. The trust, not you, becomes the legal owner of your assets. So, if you are sued personally, the assets owned by the trust are unaffected. For example, if your trust owns your home and you are sued by someone, your house is protected from that litigation because YOU do not own it, your trust does.
It is, however, important to understand that not every trust affords the same level of protection. Just because you have a trust, you may not be protected if it was not specifically drafted to provide this protection. When it comes to trusts, you should not rely on online services to prepare your trust and estate plan. They use a one-size-fits-all system that does not give you the same protection as a trust that was fully prepared for your specific situation. Along the same lines, only a licensed Michigan estate planning attorney can advise you on which type of trust you need and the specific provisions it should contain to offer the most protection.
Reason #2: Your Death
Here again, you may think that having a will is enough. If you have a will then all your assets will be distributed the way you wanted when you die, right? Nope, at least not in most cases. A will lets your family and court know your final wishes but without a proper estate plan, the probate court will have the final say about how your assets will be distributed. A proper estate plan and trust will help your survivors bypass the probate court thus saving them time and money. This helps to preserve your wealth for those whom you wanted to have it. They save money, time and frustration on hiring lawyers, paying court fees and avoiding much of the probate process.
An estate plan and trust may help your family avoid common problems that happen when someone dies. Some of those problems may be:
- Your assets being squandered by someone because no one is legally in charge of protecting your estate
- Fighting amongst your survivors over your assets because there is no clear guide to who you wanted to receive what and no one legally in charge of distributing it
- Someone you did not want to receive any part of your estate could assert a claim on your estate costing your family thousands in legal fees
- Remaining obligations that you wanted to be paid (like a mortgage) may not be paid
- Money that you wanted to go to charities may not be paid
- Claims by creditors against your assets (a will alone will not protect against)
How do you protect your assets after your death?
A will is part of a comprehensive estate plan, but it offers little real protection from common problems after you die. An estate plan and trust are the best way to ensure your wishes are carried out and your wealth and assets are preserved for your family after you die. Perhaps the biggest reason why everyone should have an estate plan is that it enables your survivors to bypass probate thus saving time and money.
Why Entrusted Estate?
Having an estate planning lawyer evaluate your specific needs and draft an estate plan for your specific needs is something everyone should do. You should not rely on an online service to prepare something so vital to your wealth & family. Entrusted Estate offers affordable estate planning solutions that deliver high-quality legal advice, professional document preparation and maximum asset protection that is better than online services and less expensive than most estate planning attorneys. Call us today for a free estate evaluation and free consultation.