The Consequences Of Dying Without An Estate Plan
Estate planning is the development of a plan for managing your assets and affairs during your lifetime, in case of incapacity, and upon your death.
Your estate contains all assets you own including real property, business interest, investments, retirement benefits, insurance, and personal property. Many people and, unfortunately, many attorneys, focus only on planning for your death but neglect planning for your long-term care. Planning for the quality of life if incapacitated is significantly more important than what happens to your estate after your death.
If you pass away without a trust or a last will and testament in place and you have assets subject to probate, a judge will have to appoint someone to be the personal representative of your assets. Your estate will then be distributed to your heirs according to the law. If you have minor children, the court may appoint a guardian over your children or a conservator of their estate. No doubt, you would want to make these decisions rather than leave them to a stranger.
The Goals Of An Estate Plan
Estate planning is about you, the person who is alive and in control of your property, and who you want to receive your property after your death. It is all about your wishes and what you want to happen in the future should you not be there to have a say.
Having worked with clients to develop estate plans, some common basic goals are as follows:
- providing for loved ones
- mitigating or avoiding probate
- minimizing taxes
- providing for the orderly distribution of assets
- protecting your assets, and
- planning for incapacity.
These preferences include thoughts as to who should or should not get your assets after your death. However, without advanced planning, state law will decide who gets what and when. These one-size-fits-all laws are not likely to line up with your preferences. This is particularly true where there is a former spouse, children from another marriage, minor children, estranged children, or large families.
Planning can help ensure that your wishes are carried out. This can include making arrangements for spouses and children and ensuring that the assets are distributed in a way that provides for their support. This can also include specific transfers. This may be as simple as ensuring that personal effects are transferred to those who will appreciate them, like our father’s lamp going to your granddaughter or your pocket watch going to your grandson. It may also include transferring your real estate or businesses to those who will be able to manage them.
Mitigating Or Avoiding Probate
The probate process in Michigan can be expensive and time-consuming. Even simple probate can cost several thousand dollars. The process can also encourage property disputes between family members, which can destroy family relationships and result in sizable legal bills. Advanced planning can help you to minimize the impact of probate or avoid probate altogether. It can also help you to minimize the chance that your heirs and others get into disputes over property. This planning may include setting up different types of trusts, executing legal documents so that property passes outside of probate, and including language in legal documents to discourage property disputes.
Providing For The Orderly Administration Of Property
When someone dies, their assets have a way of disappearing. Other assets end up being mismanaged while everyone figures out who gets what. This can cause the value of your assets to diminish considerably. I often see this when a business owner dies. Without proper planning, the business often ends up having to close after the owner’s death. Planning can help avoid this.
Planning can also help ensure that property goes to those who you wanted it to go to and that the property is managed appropriately during the probate process or transferred before the probate closes.
You have worked hard to accumulate your assets. Lawsuits, divorces, and other events can significantly reduce the size of your estate. How assets are held in title and who they are transferred to can leave the assets exposed to creditors as well as others. This can even include your heirs and creditors. Planning can help protect your assets and limit liability exposure.
Providing For Incapacity
We often take our mental health for granted. We assume or at least hope, that we will always enjoy the full use of our mental faculties. But the research paints a different picture. The research shows that 1 in 10 individuals over the age of 65 is diagnosed with dementia. This number increases significantly with age.
Advanced planning in case of your incapacity is to structure your affairs so that resources would be available should you need them. Several estate planning techniques are available for this. These techniques can help ensure that financial resources are available. They can also ensure that financial resources are not wasted and do not disqualify you from qualifying for government benefits. These techniques can also include leaving advanced instructions, which can cover everything from how to manage assets to what healthcare decisions should be made for you by your loved ones.
The Best Time For Someone To Begin The Estate Planning Process
The best time to put an estate plan in place, if you don’t already have one, is now. It is never too early nor is it ever too late. As we age, our estate planning needs to change often. The goal of a comprehensive estate plan is to put the best plan in place for you and your family today. As life-changing circumstances present themselves, the benefit of having an estate planning and elder law attorney is that your planning needs can always be modified.
With the guidance of a skilled attorney for Estate Planning Law Cases, you can have the peace of mind that comes with knowing that we’ll make it look easy. For more information on
Estate Planning Law in Michigan, a free initial consultation is your next best step. Get the information and legal answers you are seeking by calling (248) 800-2548 today.