What is the Importance of Estate Planning?
Estate planning is a necessary process that enables you to decide who will take over your assets and wealth when you exit the world. Many people envision the process as complex and time-consuming. Others think of estate planning as a preserve for wealthy individuals or families with large estates and many assets – this is simply not true.
Planning your estate can help protect your family and everything you have worked hard for. The process involves many crucial documents you should consider as part of your estate plan. Properly done, estate planning can save you thousands of dollars in probate court costs and fees. Consult Kendal Law Group’s business and estate planning attorneys in Michigan to learn about the process and the tools to use depending on your circumstances.
What Are the Legal Documents Needed for Estate Planning?
Estate planning documents are the legal tools that address the distribution and ownership of your assets upon your demise. At the very least, your estate plan should include a Will. But, if you only have a Will alone, it will need to be probated in probate court, causing additional expenses and fees.
However, consider incorporating the following crucial documents to ensure your last wishes are implemented according to your desires and to avoid probate. Estate Planning and Trusts lawyers in Bloomfield Hills can guide you on what each one entails.
A Will outlines your desire for who you want to inherit your assets and property upon your demise. It covers your:
- Physical assets like personal possessions and real estate
- Intangible assets like investment and bank accounts
However, a Will doesn’t control the distribution of all assets, especially those held in joint title and life insurance proceeds. The people you name as the recipients of these assets are your beneficiaries and can be your family members or charities that are important in your life.
A Will also names the people you would like to take over as guardians to your minor children and pets upon your demise. Without a Will, it’ll be upon the state to decide who gets what from your assets and possessions once you die. Our skilled estate planning attorneys in Bloomfield Hills can guide you on everything else to incorporate in a Will.
Power of Attorney
Power of attorney is a legal document that authorizes the person you choose to control your financial matters if you cannot do so. You can create a power of attorney that only becomes effective if you become incapacitated, or you can have one that takes effect immediately, depending on why you make one.
The document applies to the specific situations and matters you specify and authorize. For example, a medical power of attorney doesn’t grant the authority for financial decisions on your behalf. Find out from experienced Bloomfield Hills trust lawyers the difference between powers of attorney that are only effective during your lifetime and those that last beyond your demise.
A living trust is also known as a revocable living trust and is a legal document allowing you to transfer your assets into a trust for your beneficiaries. The tool protects your loved ones from going through probate upon your demise. While there is no specific asset size limit for creating a living trust, it’s a common tool among families and individuals with large estates.
Once you transfer your property into the living trust, you still maintain control of the assets while alive. Your trustee will transfer the assets to your beneficiaries according to your instructions when you die. With a revocable living trust, you can protect your family and loved ones from the complex, lengthy, and time-consuming probate process.
Implementing a revocable trust requires first creating, signing, and potentially notarizing the document with the help of Michigan trusts attorneys. You should also name a person responsible for managing the trust once you die, known as a successor trustee. Once you append your signature on the document, you should transfer your property to the trust.
While your will or trust may incorporate this clause, it’s advisable to have guardianship designation as a separate legal document if you have minor children or are considering having them. Picking a guardian for your children is crucial but is often overlooked. The individuals you choose as guardians should share your views and values and be willing to raise your children.
Your business and estate planning lawyers in Michigan will also advise you to name a backup or contingent guardian. Without a specific guardian, the court could rule that your children live with someone you wouldn’t have wanted them to live with. In extreme cases, your children might become wards of the state.
Some assets can skip probate and transfer directly to a beneficiary when you die. These are non-probate assets like 401(k) accounts, life insurance policies, and pensions. However, for them to skip probate, you must contact each institution that holds the specific asset you wish to transfer to a beneficiary and give the transfer instructions.
Remember that even if you name beneficiaries for non-probate assets in your will, beneficiary designation overrides the will’s contents. That’s why you must consult skilled and experienced trust attorneys in Bloomfield Hills to understand how each estate planning document works.
Legal Guidance in Protecting You and Your Family’s Future
Many people postpone creating an estate plan because they think it is tedious and a preserve for wealthy individuals. Truth is, you can protect your assets and family from a complex probate process after you die with the proper estate planning documents. Your loved ones shouldn’t have to grapple with court affairs while mourning your loss.
That’s why you should consider hiring Kendal Law Group’s qualified and passionate business and estate planning attorneys in Bloomfield Hills, Michigan to help you plan your estate. At our firm, it’s never too early to start thinking of your assets and how you want them to be distributed once you’re gone. Let us help you do everything right. Contact us to schedule a FREE Estate Planning Strategy Session.