At the law office of Andrew Byers, PLC, we believe informed clients make the best decisions about their estate plans. That's why we want to break down complex terms and clarify confusing principles so that you make the right choices for your estate, too. Contact our office either online or at (248) 469-4261 for a consultation to get specific legal advice for your estate plan. In the meantime, here are responses to some of the most frequently asked questions we get when new clients come to our office in Troy.
What is estate planning?
Estate planning is a process allowing you to arrange how you want your assets to be managed and distributed upon your incapacity or death. Sometimes, if you have limited assets, limited beneficiaries, and limited instructions on how to distribute your assets to the beneficiaries, planning is pretty straightforward. On the other hand, the more assets, the more beneficiaries, and the more instructions may require an estate plan that is more complex and varied.
Generally, there are two components of estate planning with one involving the personal aspects of it and the other involving the legal and financial aspects of the plan. The personal aspects include who you want to act as a fiduciary for you and the people you care about. For example, who do you want to handle your money for you if you are incapacitated for a long period of time? The legal and financial aspects require that technical provisions that are appropriate to your situation be drafted in your estate plan. An example is people with minor children should consider specifying to what extent a trustee can make distributions for their children's education and support in the event both parents are deceased. Another example is a couple who are in their 70's may want to include provisions in their estate plan to protect themself against elder financial exploitation in the event they become less sharp in their 80's or 90's and at risk to abuse.
What goes into an estate plan in Troy?
An estate plan will include the documents that accommodate your specific needs. It may involve some or all of the following:
- Last Will and Testament
- Living trust
- Irrevocable trusts (e.g., Medicaid asset protection trusts, life insurance trusts, gift trusts, special needs trust, charitable trust)
- planning to avoid Conservatorship
- planning to avoid Guardianships
- Asset protection from divorce, creditors, others
- Health care directives, including Patient Advocate Designation with living wills provisions and do not resuscitate orders
- Succession plan for business
- Charitable planning
What is probate?
Probate is the legal process of transferring the property from a deceased person's estate to their heirs or beneficiaries. For Oakland County residents, probate is overseen by the Oakland County Probate Court.
What happens if I die without a Will in Michigan?
Dying without a Will means you die intestate. Your assets and belongings will get passed to your heirs according to the State of Michigan's intestacy laws.
What happens to my Will if I move to a new state?
In some cases, the differences in state laws could make it invalid. More commonly, if you moved to a state that views marital property differently from your former state of residence, the change in laws could result in complications. It is wise to review your Will with an attorney in your new state after moving.
Do I need a lawyer to write my Will?
While you do not need a lawyer to write a Will, doing so is a considerable risk. A Last Will and Testament that was not written by a lawyer or that was created using an online form are more likely to be incomplete, challenged, deemed invalid, or leave significant assets unaccounted for, which can create confusion and unforeseen outcomes. In the small print at the bottom of the website of the online form services, they all say they do not provide legal advice or are not intended as a substitute for an attorney. In their terms of use, they all state that they do not guarantee their forms will work. The best way to make sure you have a valid Will in place is to hire a lawyer draft it after meeting with you to learn about your specific personal, family, and asset situation so that the right legal provisions can be included in your estate plan.
Can you write a Will if you have Alzheimer's or dementia?
People need to have testamentary capacity to make a valid Will. This often requires an understanding of the property being devised in the Will, who is going to receive it, and the purpose and function of a Will. People with Alzheimer's or dementia can have testamentary capacity to make a Will in the earlier stages of the disease but may struggle with testamentary capacity in the later stages. As such, estate planning soon be done as soon as possible after a dementia diagnosis.
Do I need a Will if I have no children?
If you die without a Will, your estate will pass to others through Michigan's intestacy laws. If you have no children, then property will be disbursed to family members (parents, siblings, nieces/nephews, grandparents, or more distant relatives. If you have no heirs, then the state may acquire the property. So, even if you do not have children, you still need a Will if you do not want the state to make decisions for you about who gets what from your estate.
Keep in mind you do not have to create a Will to benefit only family. A will allows you to pass your estate in a way that will serve what matters most to you: this could be preserving the financial wellbeing of your partner, parents, or siblings, but also setting money aside for the care of a pet, or assisting a charitable organization aligned with your values.
Does my Will automatically change if I divorce?
No. It is crucial to update your Will after getting a divorce so that your most recent wishes are reflected in it.
Does my Will automatically change if I have a child?
It depends on the language in the Will. If your Will specifies an action that will happen to unnamed offspring (for example: “All of my property equally to my children”), the interpretation would be different than if you made a specific bequest to a named child or children. You should always revisit your Will after having a child. For people who may have more children in the future, attorney Andrew Byers drafts his clients Wills and Trusts so that future children are automatically included so that they do not have to keep updating the estate plan after the birth of a child.
What is the difference between a Will and a Living Will?
A Will – also called a Last Will and Testament – comes into effect when its creator dies and directs the executor (called the Personal Representative in Michigan) on how to transfer the property in the estate. A living will, on the other hand, comes into effect when its creator is alive but incapacitated – it tells others what the creator's preferences and medical decisions are when they are at the end of their life. Specifically, a living will can authorize a patient advocate to discontinue further treatment when it would only extend the dying process or be futile.
What is a trust?
A trust is a legal entity that holds a pool of assets which is set aside to be managed by a trustee, for the benefit of someone else, called the beneficiary.
What is the purpose of a trust in Troy?
A trust sets aside some assets for a trustee to manage for the sake of a beneficiary. The assets set aside in the trust do not go through probate, simplifying and expediting its transfer out of the estate. The trustee must follow the instructions set out by the trust.
Can I have both a Will and a trust in Troy?
Yes. Many trusts are testamentary trusts and are created in the decedent's Will. However, a Will is just a set of directions for the probate court, so lots of other trusts are made during the person's life to distribute assets outside of the probate court process.
Are trusts only for rich people in Michigan with lots of assets?
No, trusts can be created by anyone who wants to set aside money for someone but who does not want to give them the money in a lump sum. They are especially common when the beneficiary is underage or is unable to manage their own affairs.
What happens to jointly owned property when one spouse dies?
When spouses jointly own property and then one spouse passes away, the property is automatically passed to the surviving spouse. An example would be the marital home owned by both spouses. However, upon the surviving spouse's death, if the estate plan is not updated, the home will have to go through probate because then it was just titled in the surviving spouse's name.
What is a guardian?
A guardian is a person who is responsible for someone else's well-being and medical care. For young children, a guardian is appointed to have the care and custody of the children if both parents are deceased. People often designate a guardian for their underage children in their Will. These legal guardians can make legal decisions on behalf of their charges, much like a parent. There is another type of guardianship for incapacitated adults in which the probate court appoints a guardian to make medical decisions for the adult when the adult did not make a Patient Advocate Designation in advance of becoming incapacitated.
How can I designate a guardian for my children?
Naming a legal guardian for your underage children is a common provision in a Will. You also have the ability to appoint a trustee for adult children who may be unable to make certain decisions.
If you do not appoint a legal guardian via a Will, the court will appoint one upon your death. For this reason, it is important even if it seems like commonsense to make sure you designate a guardian in your Will.
How can we make sure our special needs child is cared for after we die?
A common way to ensure a special needs child continues to receive the care they need is to appoint a trustee for them and to create a special needs trust fund for them. That way, the inheritance will not disqualify the special needs child from government benefits like Supplemental Security Income and Medicaid, which have asset and income criteria. Special needs child trusts are specific for this purpose.
How can I make sure my pet is cared for after I die?
A common way to care for pets after their owner passes away is to state in the Will or trust who is to care for the animal and then to either create a trust for the benefit of the pet or authorize your trustee to distribute funds to take care of your pet until they are rehomed.
How much will an Estate Planning attorney in Troy cost?
The costs for an estate planning attorney depends on multiple factors. First, what are you trying to accomplish in your estate plan? Second, what is the nature and extent of your estate? Third, what is your personal and family situation? Are any of your heirs troubled and does your family get along? The more complicated your estate plan, the more costs you will expend. Second, how does the attorney charge? Is it by flat fee, which is most common among estate planning attorneys, or by hourly rate? In the former, less services may be included in the fixed rate, but in the latter, hours can add up quickly. You want to be sure exactly what you are getting (and not) for the price you are paying. You may pay a couple hundred dollars, or you could pay a couple thousand dollars. Estate planning attorney Andrew Byers always quotes his clients a firm fee at the consultation and then his clients can think about it or give the direction to go forward with drafting the estate plan. That way clients know what the price is before they commit themselves.
When do I need a power of attorney in Michigan?
A power of attorney is essential for people who are unable to make important medical or financial decisions on their own behalf, usually because they are incapacitated or suffering from a medical condition. There are five types of powers of attorney, each with their own purpose:
- Durable power of attorney
- Medical power of attorney
- General power of attorney
- Limited (special) power of attorney
- Springing power of attorney
Contact an Estate Planning Lawyer in Michigan Today
At the law office of Andrew Byers, PLC, we know you have lots of questions about estate planning. Our estate planning lawyer in Michigan is here to answer your specific questions. Contact us either by using our online form or calling us directly at (248) 469-4261 to discuss your initial questions and concerns or schedule a consultation.