Creating or Updating Your Estate Plan While at Home During the COVID-19 Outbreak
As the COVID-19 pandemic marches on, Michigan residents are sheltering in place in our homes while others may be in nursing homes, hospitals, or other medical facilities. Inevitably, many of us think about our estate plans and what will happen if we succumb to the coronavirus or some other cause in the future.
Whether you have a will, trust, or another planning document that needs updating. or you don’t have any plan in place at all, now is the time to take action. Just because you cannot meet with an attorney in person doesn’t mean that you should wait to put your affairs in order. You always have the option of preparing your own documents, but you must make sure they satisfy specific legal requirements. While we strongly encourage you to meet with an estate planning attorney when circumstances permit, you can address certain issues in a pinch.
Is Your Will Valid Under Michigan Law?
A will is simply a set of instructions to be followed after your death. It provides a roadmap that your family, your heirs, and the court can follow to ensure your wishes are met. To be valid under Michigan law, a will must:
- Be in writing (handwritten or typed).
- Identify itself as your will and clearly indicate that you are the testator (the person making the will).
- Be signed and witnessed by two individuals.
If your document fails to meet these requirements, it may still qualify as a “holographic will” as long as:
- It is dated.
- You sign it as the testator.
- The material portions of the document are in your handwriting, whether or not it is witnessed.
While it is possible in Michigan to admit a document to probate as a will even if it fails to meet these formalities, doing so can be more difficult and costly, particularly if there is disagreement in the family.
If the current “stay at home” order or other circumstances prevent you from meeting with an attorney to prepare your will, we recommend you:
- Write your will as a letter in your own handwriting and avoid using “legalese” (you can even write your will on a napkin if that is all you have available).
- Title your document “Will.”
- State in the first sentence that “This is my last Will and I replace any prior Wills” (even if you have never had a will).
- Identify the person or persons you would like to serve as the personal representative (also called the executor) of your estate, and any people who will serve in that role as a backup.
- If you have minor children, identify the person or persons whom you would like to care for them as guardian (a person who will address your children’s health and care needs while they are minors) and conservator (a person who will manage your children’s money while they are minors), and the names of any backups.
- Identify any specific gifts you may wish to give, stating each item and the name of the person who is to receive it, for example, “to Bill Smith, my red wagon, if he outlives me.” If you have multiple items, add sufficient descriptions to avoid conflict.
- Identify who is to receive the “residue” (everything else) of your estate. (You can identify by dollar amounts if you wish, but you may want to consider using percentages instead for purposes of flexibility. For example, specify “the residue of my estate shall be distributed 30 percent to Bill Smith, 40 percent to Jane Smith and 30 percent to XYZ charity.”)
- Identify any backup beneficiaries, for example, “30 percent to Bill Smith, but if he dies before me, then his share shall go to his descendants.”
- State your wishes for any pets you have.
- Sign and date the document.
- Ideally, have two adults witness your signature (consider having someone other than a family member or anyone receiving a gift from you under your will as a witness).
What If I Die Without a Will?
If you die without executing a will, trust, beneficiary designations, or other testamentary instructions, you leave it up to a probate court judge to follow state intestacy laws to determine who has priority to serve as your personal representative and how your assets should be distributed. As comprehensive as Michigan probate and intestacy statutes are, they cannot address every circumstance or contingency, so it’s far better for you to take charge of your wishes and create a valid will.
What Are Advance Directives?
There may be times when you want to authorize someone to be your legal representative or have a person act on your behalf if you are legally incapacitated – essentially, directing in advance who can make decisions for you when you cannot. You may have heard the term “power of attorney,” but there are different versions for different purposes.
A durable financial power of attorney permits you to identify an individual whom you authorize to make financial decisions for you immediately or if you are incapacitated. If you wish the power of attorney document to remain effective upon your disability, you must identify the document as a “Durable Power of Attorney.” If you don’t, you risk that the document will have no effect upon your incapacity, the time when you need it most.
Please keep in mind that a Durable Financial Power of Attorney is a powerful document. You are giving someone access to your finances, so you must carefully consider the person you choose to serve as your agent. Do not select anyone who is or has a history of financial mismanagement.
If it isn’t practical at this time for you to consult an attorney, you can prepare a Durable Financial Power of Attorney yourself, either typewritten or in your own handwriting. Here’s how:
- Title the document “Durable Power of Attorney.”
- In the first line, state “I, [your name] hereby appoint _____________________ as my attorney-in-fact, effective immediately.” If you want to include a backup, state “If [whomever you first identified] is not available or ceases to act, I appoint ______________________ as my attorney-in-fact, effective immediately.”
- Identify the powers you wish your attorney-in-fact to have: “My attorney-in-fact shall have all the powers I have to manage my finances and property, real and personal, including but not limited to, the management of all bank, credit union, investment, retirement and other accounts of mine, as well as the power to manage all real and personal property of mine, including the power to sell or transfer the same.” (Please note that documents prepared by an attorney are typically much more detailed. There are risks in granting general authority to an untrustworthy person who could do severe financial damage, as well as institutions that are sometimes hesitant to react to general powers over a long list of specific powers).
- After the powers, you must include the following language: “This power of attorney is not affected by my subsequent disability or incapacity, or by the lapse of time.”
- You must sign and date the document.
- The document must be witnessed by someone other than a person you name as your attorney-in-fact.
- The document must be notarized, and the notary must note the date you signed it.
- The document must include the following statutorily mandated acknowledgement that your agent must sign before he or she acts on your behalf: “I, ____________________, have been appointed as attorney-in-fact for ________________________, the principal, under a durable power of attorney dated __________. By signing this document, I acknowledge that if and when I act as attorney-in-fact, all of the following apply:
- Except as provided in the durable power of attorney, I must act in accordance with the standards of care applicable to fiduciaries acting under durable powers of attorney.
- I must take reasonable steps to follow the instructions of the principal.
- Upon request of the principal, I must keep the principal informed of my actions. I must provide an accounting to the principal upon request of the principal, to a guardian or conservator appointed on behalf of the principal upon the request of that guardian or conservator, or pursuant to judicial order.
- I cannot make a gift from the principal’s property unless provided for in the durable power of attorney or by judicial order.
- Unless provided in the durable power of attorney or by judicial order, I, while acting as attorney-in-fact, shall not create an account or other asset in joint tenancy between the principal and me.
- I must maintain records of my transactions as attorney-in-fact, including receipts, disbursements, and investments.
- I may be liable for any damage or loss to the principal and may be subject to any other available remedy, for breach of fiduciary duty owed to the principal. In the durable power of attorney, the principal may exonerate me of any liability to the principal for breach of fiduciary duty except for actions committed by me in bad faith or with reckless indifference. An exoneration clause is not enforceable if inserted as the result of my abuse of a fiduciary or confidential relationship to the principal.
- I may be subject to civil or criminal penalties if I violate my duties to the principal.
Signature: _______________________ Date: ______________________
Similar to a durable financial power of attorney, a durable healthcare power of attorney (or patient advocate designation) authorizes someone to make decisions about medical care and treatment and end-of-life decisions on your behalf according to your wishes.
Without an attorney-prepared document, the easiest way to prepare a healthcare power of attorney/patient advocate is to complete the Advance Directive, Durable Power of Attorney for Healthcare (Patient Advocate Designation) from Making Choices Michigan. Whether you use that form or draft your own, the document must be:
A person witnessing the advance directive may not be:
- Your spouse, parent, child, grandchild, or sibling.
- An heir or someone who will receive a gift under your will.
- A physician.
- The person who will serve as your patient advocate.
- An employee of a life or health insurance provider for you.
- An employee of a health facility where you are being treated, a nursing home where you reside, or a community mental health services provider or hospital providing mental health services to you.
Once you’ve executed the document, it only becomes effective when two physicians (or one physician and one licensed psychologist) determine you are unable to participate in medical or mental health treatment decisions, as applicable, and your patient advocate signs an acceptance indicating that he or she will serve.
Talk to an Experienced Estate Planning Attorney
As with all legal documents, you must be very careful that the prepared document absolutely follows your intent. The above steps are not legal advice and are not a substitute for legal advice. They are simply to provide information if you find yourself in a circumstance that keeps you from obtaining the advice of a qualified attorney, and you are prepared under the circumstances to complete your own documentation. As soon as you are able, we advise you to seek the counsel of a qualified attorney.
Like many businesses, Kreis Enderle has suspended activities at our offices for the protection of our staff, our families, and clients. We’re still working, albeit remotely, and making every available effort to “meet” with new and current clients by phone, videoconference, and email. Please don’t hesitate to contact us to discuss your estate planning or other legal needs.