Birmingham Trusts and Estates Attorneys

There are estate planning documents that everyone should have, regardless of what their income level is. 

The Will

When a person dies without a will, everything they own goes into intestacy. This is the legal terminology for saying the state of Michigan will follow a rigid, pre-ordained process to determine who inherits what. 

Michigan law is set up to make every possible effort to get a person’s assets into the hands of family, no matter how distant, before it simply goes to the state. But intestacy laws aren’t designed to factor in relationships that are unique to every individual. 

One person might have a niece or nephew they want to help. Another person might have a beloved caregiver who is not related to them at all. The niece or nephew won’t be very high up on the chain of intestate succession, and the caregiver won’t be there at all. The only way to ensure people like this are taken care of is to put it in a legally binding will. 

A will, contrary to popular assumption, does not mean the heirs avoid probate court. A will does make probate a lot easier — and potentially less costly — to go through, because there is no doubt about what the deceased wanted to do with their assets. 

Health Care Power of Attorney

We don’t want to think of the prospects of being mentally incapable of making our own health care decisions. Even less do we want to think about being in that state when there are potentially difficult decisions to make. Your health care power of attorney is the person you will designate to make these decisions on your behalf. 

The person chosen is presumably someone whom we have complete trust in and who understands our values. With the help of a lawyer, you can also anticipate potential decisions that may arise and put your wishes into writing with an advance medical directive.

Financial Power of Attorney

What happens to the person who suffers from dementia and can no longer handle their own finances? Someone needs access to the person’s checking account and retirement funds to pay for assisted living and other expenses. By moving proactively while you are healthy, you can designate who you want to get your financial power of attorney. 

Power of attorney for health care and finance can be granted to the same person. A lot depends on the skill sets of a person’s most trusted confidants. The person who’s good with the accounts might not be the person who had the requisite medical knowledge to make difficult decisions on health care. 

However you settle the matter, it is important that the individuals entrusted with power over health care and finances be on the same page. 

What a Trust Is & How It Works

A trust is a legal structure where you put your assets. Money, property, and family heirlooms can be deposited into a trust. Anything in a trust avoids probate court and goes straight to the heirs.

There are a wide range of trusts that meet the needs of people in different situations. A person can begin depositing assets into a trust while they are still alive and manage the trust themselves. They can have a testamentary trust, wherein all assets automatically go into the trust at the point the person passes away. 

A trust can be set up to be revocable, where beneficiaries can be changed while the grantor (the person who set up the trust) is still alive. Or, the grantor can opt for an irrevocable trust, gaining tax benefits in exchange for the loss of flexibility. 

The grantor will appoint a trustee to distribute assets after death. The distribution can, broadly speaking, happen one of two ways. The first is that everything in the trust is given to the heirs and the trust dissolves. The other is that inheritances are given out over a period of time, with the trustee managing that process. 

There are several ways an extended period of distribution might be managed. The grantor might prefer that some of their heirs not inherit everything until they reach certain checkpoints in their lives, like graduation from high school, going to college, graduation from college, or getting married. 

Another example might be a child with special needs or a case in which a parent is concerned with an adult child’s lifestyle. They may still bequeath the inheritance to their child, but the trustee is given leverage in managing the money and its distribution. 

Estate planning involves a lot of decisions and documents to making sure your wishes are respected, both at the end of your life and after your death. Lippitt O’Keefe, PLLC can help.