Kreis Enderle’s Estate Planning and Probate attorneys bring years of expererience in assisting clients with their estate planning, including:
- Wills, Trusts, Powers of Attorney
- Succession Planning
- Wealth Transfer Planning
- Asset Protection Planning
- Prenuptial Agreements
- Elder Law/Long-Term Care Planning
- Guardianships and Conservatorships
- Medicaid & Veterans Administration Benefits Qualification
- Probate & Trust Administration
- Will, Trust and Fiduciary Litigation (e.g., claims of undue influence; misappropriation of assets)
What is the difference between a Will and a Trust?
Like with any job or trade, we use tools to help clients accomplish their goals. A Will and Trust are both legal tools we use depending on the needs and goals of the client. They establish the instructions that outline how your assets are to be transferred to those you designate. These tools, whether it be a Will or a Trust, will establish who you put in charge or your estate (the “Personal Representative” in a Will and a “Trustee” in a Trust.) The primary difference, but certainly not the only reason to choose one over another, is the probated nature of a Will versus a Trust. You see, a Will is often misunderstood: The Will designates who is in charge and who gets what from your estate, but it will put your estate through the probate process. A Trust, on the other hand, if funded correctly, avoids the probate process because it is essentially a separate entity, that you set up, and put your assets into. A Trust does not die, so it does not go through probate. It is important to meet with an attorney to establish your goals first and then decide if a Will or Trust is the proper tool for accomplishing those specific goals.
What is the difference between a Will and a Living Will?
As noted above, a Will is a set of instructions typically identifying (i) who is to manage your property upon your death, and (ii) who is to receive that property once expenses are paid. A “Living Will” is something entirely different. You may also hear the term “advance directive.” The State of Michigan does not have a “living will” statute. However, the State of Michigan does provide for your ability to designate a “patient advocate.” Your patient advocate, following the powers you designate in writing, will assist you with matters including your care, custody, and medical or mental health treatment, to the extent of the authority that you provide in your written document. That authority can include making end-of-life care decisions for you, if you wish; thereby providing powers, such as one might associate with a “living will.” Your patient advocate will only have authority to act as your advocate when your attending physician and another physician or licensed psychologist, together, determine that you are unable to participate in medical treatment decisions. It is important to note that patient advocate designations must comply with a number of formalities; failure to follow such formalities may render the document ineffective.
My child turned 18 and nobody will talk to me about my child’s health or financial needs, why?
Your child turned 18 and suddenly no one will talk to you? Not school personnel. Not your child’s physician. Billing departments for medical bills or other accounts. The control you had yesterday to manage these things for your child is suddenly gone. Why? In the eyes of the law, once your child turns 18, he or she is an adult, notwithstanding that your child most likely has some growing up still to do and would like your help, even if he or she won’t always admit it.
There is a solution, however, which will allow you to continue to assist with your adult child’s affairs, their doctor appointments, their schedules, their bills, etc. If your child agrees to allow you to provide such assistance, he or she can execute Durable Powers of Attorney both for financial matters and healthcare, as well as a HIPAA Authorization.
The Durable Power of Attorney is a legal tool used to allow someone, in this example your child, and referred to as the “principal,” to nominate someone else, in this example you, and referred to as an “Agent,” to manage your child’s financial affairs. We use “financial affairs” loosely, because this document can grant a wide range of authority, from handling the principal’s banking powers to their retirement benefits, from directing their mail to signing a mortgage. Your child does not lose the ability to act for himself or herself.
The HIPAA Authorization is another tool that, when signed by the principal, identifies certain persons with whom doctors and other medical personnel can discuss the principal’s medical care. When your child is an adult, he or she now has a new sense of autonomy in the eyes of the law and medical personnel may ask you to leave the room. Don’t be surprised or angry. Simply provide medical personnel with the HIPAA Authorization document that grants them the authority to speak with you about your child’s medical care.
A Healthcare Durable Power of Attorney is different from both the Durable Power of Attorney for finances and HIPAA Authorization discussed above. This legal tool deals primarily with making medical decisions on behalf of your child, when your child cannot otherwise make his or her own medical decisions. So long as your adult child is alert and competent, your child has the exclusive ability to make his or her own healthcare decisions. You cannot change that. BUT, in the event of a tragic accident or if a need arises during surgery, and in either case your child is without capacity the Healthcare Power of Attorney document can be used by your child’s agent – generally mom and dad at this point – to make his or her medical care decisions. Without this document, medical personnel will look to your child’s ‘next of kin’ to make that medical decision. But the process of determining who is the ‘next of kin’ can take some time and when you are dealing with a life-threatening medical issue, the last thing you want to do is have to prove your child has no children or spouse, that you are the true parent, etc.
How should I sign a document when acting as agent under power of attorney?
You should first review the power of attorney document you are working from, it may provide instruction. If it does, follow those instructions. If it does not, review the document you are signing as agent under power of attorney and determine whether it requires a particular format. If not, the overriding principal is that you must be clear that you are a person empowered to sign on behalf of another. Although there are options as to format, the following is generally an accepted format, again, unless you are instructed otherwise by the power of attorney document itself: “Bill Smith, attorney-in-fact for Jane Smith.” This format would be used when Bill Smith is empowered as the agent for Jane Smith.
Of note, (i) unless you are actually an attorney, do not shorten “power of attorney” to “attorney,” and (ii) never simply sign the person’s name on whose behalf you are serving as agent—doing so can make it appear as though you are attempting to forge that person’s signature.
Does remarriage affect my estate beneficiaries?
Yes, it can. With human life expectancy increasing, the population of blended families is also increasing. People are living longer. For this reason and many others, second marriages, and the blended families that often go along with them, are becoming increasingly more common. Although a new marriage may be an exciting time for the remarried parent, it can result in apprehension from children of an earlier marriage who may now wonder both how this will affect their personal relationship with the remarried parent, and how the new marriage may impact the child’s inheritance. While children may be best off not to expect an inheritance, it is also true that a parent’s estate is so much more than money. An individual’s estate is a legacy that only true loved ones can understand. Losing it, no matter how small or large it is, can be devastating.
The bottom line is that blended families do, in fact, face some additional complexity in their planning needs. The second marriage can have a significant impact on one’s intended estate plan. Even if you haven’t established a Last Will and Testament of your own, rest assured that the State of Michigan has prepared one for you. It’s called Intestate Succession. Michigan’s intestacy statutes set out the plan for where and how much of your assets go to your “family” in the event you don’t have estate planning stating otherwise. Note that although the Michigan intestacy statute identifies who constitutes your “family,” the State’s definition may not be the definition you would have chosen for yourself. Intestacy does not, for example, take into account step-children, charities, or friends who you may consider family. If you have no estate planning, the law steps in to say who gets what of your property, and if you are marrying for a second time, the what and who changes. If you have planning in place, you also need to make adjustments to include or specifically exclude your new spouse, or to adjust interests to your children or others who benefited under your planning created prior to meeting your new spouse.
Furthermore, there are homestead and family allowances (in amounts set by Michigan statute) that the surviving spouse can take against the estate-with priority over designations in a Last Will and Testament. Even an established estate plan can be disrupted by these allowances if they are not carefully planned for. If you have, or are planning to have, a blended family, it is particularly important for you to discuss the matter with an experienced estate planning attorney. A plan tailored to fit the needs specific to blended families is absolutely essential to achieve your intent, and potentially head off family disharmony.
My friend has a trust, so should I have one?
Not necessarily. Estate planning should be tailored to your specific needs; your neighbor’s needs may not match yours. You may have successful adult children to whom you would want to immediately gift your assets in the event of your death. Your neighbor may have minor children for whom guardians will need to be appointed and for whom assets should be retained in trust for the care of the minor children until they are of an adult age at which your neighbors are comfortable making distributions of their assets. Or it may be that your neighbors have a trust because one or more of their beneficiaries has spending/creditor problems or special needs, for which more complex planning is necessary. Competing with your neighbors for the best lawn is one thing. Copying your neighbor’s estate planning can result in unnecessary complexity and expense, or on the other hand under planning, and a plan which ultimately fails to meet your needs.
What do the terms “testate” and “intestate” mean?
If a Michigan resident dies with a Will which complies with Michigan law, then that resident has died “testate,” which means he or she had a valid Will at death and that his or her assets will pass to the people or entities named in that Will. A Michigan resident who dies without a Will, or without a Will which complies with Michigan law such that it is not admitted to probate, has died “intestate.” The deceased Michigan resident’s probate assets will then pass in accordance with Michigan’s laws of intestacy. Those intestacy laws may unfortunately result in people receiving the decedent’s property contrary to the decedent’s verbalized wishes. As such, if you have particular thoughts as to how you wish your property to pass or if you have particular individuals you would like to serve as guardians of your minor children, you need to meet with an experienced estate planning attorney to document those wishes.
What is required for a valid Will under Michigan law?
Any Michigan resident who is 18 years of age or older and who has sufficient mental capacity (an individual has sufficient mental capacity to make a Will if each of the requirements at MCL 700.2501 is met) may make a Will. In Michigan, a Will is valid only if it is (i) in writing, (ii) signed by the testator (the person making the Will) or in the testator’s name by some other individual in the testator’s presence and at the testator’s direction, and (iii) signed by at least 2 individuals, each of whom signed within a reasonable period of time after he or she witnessed either the signing of the Will or the testator’s acknowledgement of that signature or acknowledgement of the Will.
If a Will fails to meet each of the above requirements it may still be accepted in Michigan as a “holographic will” if it is dated, and if the testator’s signature and the document’s material portions (e.g., those portions discussing who is to receive what property) are in the testator’s handwriting. A “holographic will” need not be witnessed. A writing which even fails to meet the standards of a “holographic will” may still be accepted as the decedent’s Will if the person seeking acceptance of the document can establish to the Probate Court that the decedent intended the document to constitute the decedent’s Will, or addition to or alteration to the decedent’s Will.
While as states go Michigan is fairly accommodating as to what it will accept as a decedent’s Will, the costs both in dollars and family relationships relating to a Will contest over the admission of a Will which fails to meet Michigan’s statutory formalities will certainly outweigh the cost to engage an experienced estate planning attorney to assist you in the preparation and execution of your Will.