It is never too early to start creating your estate plan. Life is uncertain, and you never know when you or your loved ones may be faced with tough choices about your care, well-being, healthcare treatment, or distribution of your assets. Here is a guide to what estate planning documents are needed in Michigan to cover all your interests and make sure the people you care about are provided for once you can no longer do it yourself.
The simplest approach to estate planning (but perhaps not what you want) is to simply do nothing and allow state law to decide what happens to your affairs after you die. Michigan’s probate law dictates that if a person dies without a valid will or trust in place, their “intestate” estate will generally be given to the following relatives of the deceased, in a certain order of priority, depending on who is alive at the time the deceased person passes away:
There are special rules about the division of assets between a surviving spouse and the decedent’s children that cover what to do in cases with second marriages and half-siblings. However, beyond these rules, generally speaking the Court will trace the family tree until it finds a branch with any surviving relatives, and then divide the person’s assets among the relatives at that level.
However, the simplest answer is not always the right one. Doing nothing may be simple for you now, but it often has unintended consequences, leaving important loved ones out of the inheritance process or giving money to relatives you would rather not have included. It is especially important to create an estate plan in cases where you:
The probate process for an intestate estate can also be more complicated and time consuming than the process of probating a valid will. The court needs to identify your assets and potential heirs without the help of your will to guide it. This often means you are handing off the hassle of deciding what happens to your estate to your loved ones (and sometimes strangers) after you die.
An estate plan isn’t a single document. Instead, it’s a collection of authorizations, directions, and legal documents that together, generally do two things:
Depending on your lifestyle, the assets in your estate, and the people in your closest circle of friends and family, you may not need all these documents, but it is still a good idea to discuss each of them with an experienced Michigan estate planning lawyer so that all your wishes are covered.
The last will and testament can be the center of any estate plan. It provides instructions about how your assets should be handled after your death and names people to serve in important roles including:
In contrast, a revocable trust is generally created and funded while you are alive, naming you and possibly your spouse as trustees during your lifetime, and then identifying a successor trustee to take care of distributing the trust assets after your death. It can include provisions for the following;
Not every household needs to create a trust. However, the more control you want to have over what happens to your assets in the years following your death, the more likely a trust will be the right choice for your estate plan.
If your estate includes a precious piece of property or pet, a trust can make sure that the person responsible for its care and upkeep after you die has access to funds for things like property taxes, vet bills, and maintenance costs. This keeps the gift of a pet or property from becoming a burden due to the ongoing cost of taking care of the asset.If you have minor children, care for incapacitated adults, or are concerned about how a beneficiary will spend their inheritance, a trust allows you to appoint a trustee to direct when and how the funds are paid out. The trustee may even pay bills directly rather than giving money to a loved one who may be tempted to relapse into substance abuse, be scammed by those looking to take advantage of their vulnerability, or simply make unwise financial decisions.
When a person in Michigan dies, their relatives and beneficiaries must file for estate administration with the Michigan probate court. Using either a formal or informal probate process, the judge will oversee the identification and distribution of assets, making sure the estate’s creditors get paid and heirs receive their intended inheritances. However, probate courts are public, and the documents filed with those courts are part of public record. That means anyone can access them: estranged family members, creditors, or even the local press. If your family’s privacy is important, you may want to consider a trust instead.
Trusts are generally “non-probated assets,” meaning the assets that belong to the trust generally do not go through the probate process. The control over a trust asset passes automatically from you to your successor trustee upon your death. A trustee has an obligation to account for and disclose trust assets to the intended beneficiaries, but not necessarily the court, unless an exception applies. That means your family’s assets and their distribution remain private.
Most estate plans involving a trust also have a “pour-over will,” which directs that any assets that accidentally or inadvertently remained in the deceased’s name are transferred into the trust after the decedent’s death, through the probate process.
When you are organizing estate planning documents, the number of powers of attorney and designation forms can get confusing. Generally, these forms each indicate the person you want making decisions and taking actions on your behalf in a particular area:
It can be tempting to just name one person to handle everything. However, it is important to speak with someone knowledgeable about the role of each agent, so you are making the best decisions going forward. By considering the specific duties and responsibilities connected to each role, you can be sure the people making the decisions have the right skills, knowledge, and demeanor to handle the work set before them.
Advance directives are written instructions for doctors and your patient advocate about what to do or not do in the case of illness or injury. In Michigan, we use a Durable Power of Attorney for Health Care document, which can limit the type, duration, and extent of different treatments:Even with the right people authorized to make decisions on your behalf, you may still want to give guidance about your own end of life care and how aggressively you want the doctors to treat you. Advance directives and Do Not Resuscitate orders (DNRs) allow you to direct your end of life care even if you are not in the physical or mental condition to give informed consent at the time. Depending on your care preferences, this can allow you to pass peacefully without intrusive efforts to prolong your life.
By contrast, a DNR document dictates that you don’t want doctors, hospitals, or emergency responders to take extraordinary measures such as using a defibrillator to keep you from dying. Together, these documents can help you prioritize between duration and quality of life. Your doctors and patient advocate can use these documents to guide your end of life care and decide when it is appropriate to withdraw treatment and allow nature to take its course.
There are a lot of estate planning kits you can buy or even find for free online. Your doctor’s office may have power of attorney, medical release, and DNR forms available as well. With so many resources at your disposal you may wonder whether you should even bother scheduling a consultation with an estate planning attorney.
However, whether you get your forms from your doctor, your local law library, or a website, they will only provide you an estate planning checklist. They will give you what you need to fill out, but they won’t help you decide how to fill in the blanks. When estate planning documents are not filled out properly, or include ambiguous language, it can create questions for your estate administrator and beneficiaries. Often, these kinds of questions can result in will challenges that bring your family back to court to sort out who should receive what. When those same errors show up in your end of life documents, it can leave your doctors guessing at what you intended, or even invalidate your living will or power of attorney designation entirely. That’s why it is so important to work with an estate planning lawyer to make sure everything is filled out properly so your final wishes will be honored the way you intended.
At NSSSB, our experienced estate planning attorneys take the counselor part of our role seriously. We’re not here just to fill out forms for you. We want to help guide you through making the tough decisions, considering the pros and cons to your chosen testamentary gifts, designations, and advance directives. We understand how Michigan probate courts will read and interpret your will and other estate planning documents. With years of experience in writing documents that will stand up in court, we will make sure that your wishes are properly documented and executed when the time comes. Click here to schedule a consultation with an attorney and start making your estate plan today.