ESTATE PLANNING FREQUENTLY ASKED QUESTIONS

 

In this section, we have comprised some of the most commonly asked questions regarding Estate Planning, and if you find that you are still seeking answers, do not hesitate to retain the assistance of one of our attorneys from the Firm’s Estate Planning Practice Group.


Berry Moorman’s Michigan estate planning attorneys provide a full range of estate planning services to accomplish our clients’ wishes, protect their family and minimize tax consequences. Our services include the preparation of wills, revocable and irrevocable trusts, generation-skipping trusts (dynasty trusts) and charitable trusts as well as advice on charitable and family gifting and custom-design programs for the transfer and protection of assets.

Estate plans are designed to fit the specific circumstances of each client, including protecting retirement plan assets and planning for the transition of closely held businesses to the next generation. We design plans that are flexible to meet changing circumstances and to assure security to the clients and their loved ones. The personal and family objectives of the client are the keystone of our estate planning services. Our approach is best described as “creative but conservative.”

What is estate planning?

Estate planning is the process of arranging for the management and distribution of your assets after death. Estate planning may also include planning for lifetime management of your assets through a trust arrangement.  It also involves planning for incapacity by authorizing a trusted person to manage your financial matters and to make medical decisions on your behalf if you are unable to do so.

An effective estate plan usually includes a will, a trust, a durable general power of attorney, and a designation of patient advocate.  It is well worth the time and effort to put an estate plan into place because it will enable you to achieve important goals and protections for you and your family.

What is a will?

 

A will is a legal document that directs how your estate (the assets that you own at death) is to be managed and distributed.  A person who makes a will is called the testator.

What are the contents of a will?

 

A will generally:

  1. Designates a personal representative (executor) to carry out the instructions in the will;
  2. Specifies the beneficiaries – that is, the persons who are to receive your assets and in what amount;
  3. Contains instructions for how and when the beneficiaries will get those assets; and
  4. Nominates a guardian and/or conservator for any minor children. A guardian has legal authority to make decisions regarding a minor child.  The will may also appoint a conservator to have legal authority to make decisions regarding a child’s property during minority.

Can I change or revoke my will after it is created?

 

Yes, you can change or revoke your will during your lifetime. You can amend your will by a document called a codicil which supersedes specified provisions of the old will.  Or, you can completely revoke your will by preparing a new will that expressly revokes the old will. A will can also be revoked by destruction or cancellation of the document.

What happens if there is no will?

If you do not have a will, the state of Michigan (or the state where you reside at death) will apply its intestacy laws to decide how to distribute your assets. This is known as dying intestate and the application of the intestacy laws may not produce the results that you would have wanted, especially if you wanted your assets to go to any person who is not related to you.

 

 

 

 

What is probate?

 

Generally, probate is a judicial procedure whereby the Probate Court gives a personal representative the authority to administer and distribute a deceased person’s estate either in accordance with the will or the state’s intestacy laws if there is no will.  Upon meeting certain requirements, the personal representative is given Letters of Authority allowing him or her to gather the assets of the estate, pay the decedent’s debts and taxes, and ultimately distribute the estate’s assets to its beneficiaries.  The personal representative has various filing and notice requirements that must be completed before the probate estate may be terminated.

What is “intestacy”?
Dying without a will or trust to specify how your assets should be divided may result in your spouse, children, or other intended beneficiaries receiving less than needed or intended. If you die without a will (that is, die “intestate”), Michigan intestacy law (instead of you) will direct how your assets will be distributed.

 

 

Can a decedent’s assets be administered and distributed without a probate proceeding?

Yes.  Certain types of trusts (see question 8 below) may be vehicles that allow the trustee to administer the trust without need of a probate proceeding after the settlor’s death.  Examples of types of property that are not subject to probate include:  real or personal property held jointly with right of survivorship, a remainder interest after a life estate, the proceeds of a life insurance policy, a pay on death account, or a 401k account or other qualified plan. Essentially, any asset that is titled jointly with another with right of survivorship or has a designated beneficiary will not be subject probate on the death of the owner.

What is a trust?

A trust is a legal document which creates a fiduciary relationship that allows a third-party (called a trustee) to hold the assets for the benefit of another (the beneficiary or the beneficiaries). That is, a trust is a property interest held by one person (the trustee) at the request of another (the settlor) for the benefit of a third party or third parties, the beneficiary or beneficiaries.

What is a Revocable Living Trust?

A revocable living trust (“RLT”) is an estate and financial planning document which you can alter or revoke during your lifetime. The RLT agreement sets forth how the trust property should be managed during your lifetime, upon your incapacity, and how the property should be managed and disposed of at your death.

What happens if the validity or terms of a will or trust are disputed?

If the validity or terms of a will or trust are disputed, a contest can be filed in the probate court. Common reasons for disputing a trust involve fraud, undue influence, or lack of mental capacity on the part of the testator or settlor.  The probate court also has the ability to adjudicate other disputes regarding wills, trusts, and powers of attorney.

What is a durable power of attorney?

A durable power of attorney is a document that gives a trusted person or persons chosen by you the authority to manage your assets.  The trusted person is called your “agent” or “attorney-in-fact.”  If you should become unavailable or incapacitated, your agent can manage your assets in your behalf.  The person granting the authority to the agent is called the “principal.”  The agent’s authority under the durable power of attorney terminates on the principal’s death.  The power of attorney is “durable” because the agent’s authority continues even when the principal is incapacitated.

What is a Patient Advocate?

A patient advocate is a trusted person you have designated to make health care decisions for you if you are unable to do so.  Your patient advocate is appointed by executing a document called a Designation of Patient Advocate.  You also may use your Designation of Patient Advocate to record your wishes regarding medical and end-of-life care.  In other states, similar documents are often called a Power of Attorney for Health Care.

What is digital estate planning?

Digital estate planning ensures that your digital assets are accessible upon death. Often people do not take steps to make access to digital assets possible in the event of death nor do they provide logins or passwords to do so. In these instances, digital estate planning creates a procedure whereby authorized individuals can request access to digital assets.

What assets are considered “digital”?

 

Digital assets refer to any online accounts and any files stored on a person’s computer, tablet, phone or the cloud (a server) and can be classified into two categories, online digital assets and offline (local) digital assets.  Online digital assets are those that are protected by a password and username and/or contain economically or sentimentally valuable content.  These may include on-line banking accounts, social media accounts, email accounts, cloud-based photo storage/libraries, digital music/movies/books, cryptocurrency, contact lists, or travel accounts (such as airline miles or points).

While offline or local digital assets are typically files that are stored locally on a phone, computer, or tablet, they may include valuable business documents, intellectual property, graphic design files and other types of valuable “digital data” having substantial intellectual property and economic value.

How does a digital estate plan work?

 

A digital estate plan operates much like a traditional estate plan, but it is more comprehensive and convenient. Having all the information necessary to access your online data and digital assets means your information will be centralized, organized, and accessible from anywhere.

How often should I review my estate plan?

 

You should review your estate plan every few years or any time you experience a life changing event or there is a significant change to your assets (e.g., marriage, divorce, having a child, purchasing a home, inheriting money).

Our Ann Arbor, Birmingham, and Detroit estate planning attorneys take pride in our long tradition of a strong and active practice in the areas of probate and trust administration.

Donald F. Carney, Jr.
SR. ATTORNEY

BIRMINGHAM OFFICE 
Tel: (248) 645-9680
Fax: (248) 645-1233

Sandro DiMercurio
Associate

DETROIT OFFICE 
Ph: (313) 496-1200
Fax: (313) 496-1300

Rachel Selina
Associate

BIRMINGHAM OFFICE 
Tel: (248) 645-9680
Fax: (248) 645-1233

Patrice M. Ticknor
ASSOCIATE

DETROIT OFFICE 
Ph: (313) 496-1200
Fax: (313) 496-1300



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