A Will is a basic part of most estate plans, but an estate plan includes much more than just a Last Will and Testament. A complete estate plan includes other essential legal documents that protect you and your family during your lifetime and after you pass away.
What Is Estate Planning?
Most people know that a Will is a document that distributes property after you pass away. There is a common misconception that if you have a Will, then you have an estate plan — but that is not the case at all. A Will is simply instructions to the probate court concerning any property and assets that you own in your individual name.
Estate planning involves a more comprehensive process that includes evaluating all your personal and financial circumstances and determining your goals and needs. In addition to including legal documents that distribute your property and assets following your death, your estate plan also includes Durable Powers of Attorney to protect you and your family during your lifetime if unexpected events occur.
What Is a Trust?
In addition, you and your family may benefit substantially from including a Trust in your estate plan. A Trust enables you to control and manage distribution of your property and assets, even after you pass away.
There are many situations in which using a Trust is more beneficial than giving beneficiaries full ownership of assets — and there also are circumstances when it is necessary.
One of the big advantages of a Trust is that when used properly, it avoids probate court, whereas a Will is administered through probate court. Probate court can be expensive, time-consuming, and ripe for family fighting. Avoiding probate court is a goal that many people have.
Establishing a Trust requires formally signing a Trust document, which becomes part of your estate plan. Your estate planning attorney helps you decide whether your needs and goals are best-served by including a Trust in your estate plan. When you create a Trust, you maintain control of your assets.
Every estate plan is as unique as the person who makes it. Your Will, Trust, Durable Powers of Attorney, and any other estate plan documents should be tailored specifically to your own personal and family situation.
Why Are Durable Powers of Attorney Important?
Estate planning protects you and your family during your lifetime by putting Durable Powers of Attorney in place to address possible incapacity that may occur temporarily or permanently, due to a sudden illness or accident or as part of the aging process. While it isn’t easy to think about what might happen if you cannot care for yourself or manage your finances even for a short period of time, anticipating potential future events is an important part of estate planning.
In your Financial and Healthcare Durable Powers of Attorney, you designate specific individuals to handle your financial matters and make decisions on your behalf in the event you become incapacitated. In your Healthcare Durable Power of Attorney, you designate a patient advocate who makes medical decisions on your behalf. Your Financial Durable Power of Attorney ensures that a responsible person you trust will manage your finances.
Your Durable Powers of Attorney protect you and your family and avoid a situation known as living probate. If you do not have Durable Powers of Attorney in place as part of your estate plan, and you become incapacitated, your family will have to petition the probate court to appoint a guardian and conservator for you. Even a husband and wife cannot make each other’s medical decisions without court authority or a Durable Power of Attorney. Your estate plan may also include an advance healthcare directive, which contains your wishes about end-of-life treatment and decisions.
Why Do You Need an Estate Plan?
In addition to the lifetime protection provided by your Durable Powers of Attorney, an estate plan ensures that you decide how your property is distributed after your death. If you do not have an estate plan in place when you pass away, Michigan statutes governing intestate succession determine the heirs who get your property.
In the absence of valid legal documents that distribute your estate, a probate court judge makes the distribution and decides who carries out your final wishes and administers your estate, as well as who cares for your minor children. The heirs of your property and individuals selected for those important responsibilities by the judge may not be the people you would choose.
An estate plan also protects the unity of your family. Without your estate plan, family conflicts may arise in a number of different ways. If you become incapacitated, your loved ones may disagree about who takes care of you and manages your finances. When you pass away, they may argue about who gets your property and who should have the responsibility for making your final arrangements, administering your estate, and caring for your minor children.
Family disputes over your care and property can escalate into lifelong grudges that ruin relationships forever. They also may result in court proceedings to make all those determinations, which may consume estate assets and take a considerable amount of time to resolve.
When you create an estate plan, you prevent all these problems from occurring. Consulting with an experienced estate planning attorney is essential to creating an estate plan that fits your individual and family circumstances. A do-it-yourself (DIY) approach to estate planning, using an online service or forms to create an estate plan, is a serious mistake that can result in completely defeating your goals.
Talk With Our Trusted Troy, Michigan Estate Planning Attorneys
At the law firm of Barron, Rosenberg, Mayoras & Mayoras, P.C., we provide a full range of services relating to estate planning and elder law. We’ve been serving clients in Oakland County and beyond for more than 40 years. Our clients count on our commitment, experience, and credentials when they turn to us for their legal needs.
Call us today at (248) 494-4577 or use our online form to talk with our experienced estate and probate attorneys.