Planning Ahead
Estate Planning Experts
Where do you stand with your estate planning goals? How would you answer these questions today?
- Do you have a durable power of attorney?
- Do you have a power of attorney for health care?
- Do you have a last will and testament?
- Is a living trust the best way to manage your estate?
- Do you have any special needs family members?
- Do you have your insurance policies organized?
- Do you have your banking information organized?
- Are jointly held bank accounts a good fit for your estate plan?
- Is a quit claim deed necessary to avoid probate for real estate?
- What are your plans for transferring personal property, guns, jewelry?
- What arrangements have you made for your pet(s)?
- Have you made funeral arrangements & prepaid for services?
- Will your property be transferred with debt (car loan, mortgage) or will debt be paid from the estate before it is transferred?
- Do you have someone that can manage your online passwords for social media and financial sites if you become disabled or die?
Pre-Pay and Pre-Plan Funeral Arrangements
Do you realize that within hours after your death, your family must make decisions, with or without knowing your intentions, regarding your funeral arrangements? The details of your funeral arrangements can be spelled out and pre-paid so that your loved ones can grieve and not be stuck guessing what to do.
- Traditional Funeral Service: Traditional funeral services can include viewing of the body in a casket, religious or non-religious services, burial with a headstone, and gravesite. Traditional services may also include viewing of the body in a casket followed by cremation.
- Cremation Services: Cremation services may occur after a viewing of the body in a casket or immediately without a ceremony. However, a gathering and meal can be planned for a later date.
Naming Fiduciaries/Patient Advocate
Before meeting with a lawyer to prepare an estate plan, you should consider the people in your life that will be named to carry out the responsibilities of your last will, trust, durable power of attorney, and health care power of attorney.
- Personal Representative: The person or entity named to carry out the responsibilities to administer the last will and testament.
- Trustee: The person or entity named to carry out the responsibilities to administer the living trust.
- Agent/Attorney in Fact: The person or entity named to act on your behalf in a durable power of attorney.
- Patient Advocate: The person named to make health care decisions on your behalf under certain circumstances and conditions.
For your will, trust, and durable power of attorney, your fiduciary should be someone that is trustworthy, organized, and have solid business acumen. You can name anyone to act as a fiduciary (spouse, family member, trusted friend). It is also common practice and convenient to name the same person to act as fiduciary for your will, trust, and durable power of attorney.
A family member, such as a spouse or child, is usually the best choice when naming a patient advocate in your health care power of attorney. A spouse or child is best suited to carry out your sensitive health care directives in a loving manner and also communicate well with other family members on your behalf.
Beneficiaries
Your beneficiaries will depend on your marital status, whether you have children, whether you have a blended family, along many other considerations. Naming your primary beneficiaries usually follows a pattern by first leaving everything to your spouse and then to your surviving children. You will also need to consider contingent beneficiaries. A contingent beneficiary is someone named to receive a bequest if the primary beneficiary refuses the gift or predeceases the testator.
Deactivating On-Line Accounts Upon Death
Do you have a master plan for your fiduciary to manage your online accounts upon disability or death?
- Social Media: Social media accounts will need to be deactivated at some point after your death. Many social media accounts allow for you to name a legacy contact that can manage your online account and close the account after your death.
- Online Financial Accounts: While planning your estate, do not forget about making arrangements to close online accounts such as gambling sites, auction sites, crypto-currency accounts, and financial accounts linked to external banks that may have a monetary balance(s). You should do some research for each account to determine if there are any published rules to close out the account when you die. We have found that some online platforms have complicated rules to effectuate transfer upon death.
Here are some suggestions which may be utilized to manage your online accounts:
- If approved, naming someone as a joint tenant or beneficiary on the account.
- Giving someone your passwords to login into the account, transfer any remaining balance and deactivate the account.
- Providing sufficient information for 2 step verification if you give someone permission to log into your account.
- If approved, naming someone as a legacy contact to manage the account.
- Listing your accounts in your power of attorney and giving your agent power to control the accounts in the event of disability.
- Least preferable: obtaining an order from the probate court to transfer the account.
Personal Property
How will your personal property (jewelry, firearms, precious metals, artwork) be distributed upon death? There are a few ways to transfer personal property to your loved ones:
- Make an irrevocable gift while you are alive.
- Make specific gifts of personal property as a provision in your will.
- Make specific gifts of personal property as a provision in your trust.
- Include a provision in your will or trust that personal property be shared equally.
- Prepare a Memorandum of Personal Property which MUST be referred to in the will or trust and can be changed at any time without having to change supporting documents.
The use of a Personal Property Memorandum is a convenient way to pass personal property and the list may be changed at any time prior to death. If you change your Personal Property Memorandum, you must be sure to destroy any prior list that is no longer intended to be followed.
Safety Deposit Box
Having a safety deposit box is an excellent choice for the storage of valuables. However, a safety deposit box will be sealed upon your death and your personal representative will need a court order to gain access unless another party (joint-tenant or renter) is named on the safety deposit box with equal access rights.
Caring for Your Pets
What will become of your pets if you are no longer around to care for them? Your pet’s survival may depend on an estate plan with specific arrangements for the care of your pet(s).
- You cannot leave any financial gift to an animal?
- You can set up a pet-trust in Michigan pursuant to MCL 700.2722.
- Pets are considered property under the law.
A trust may be created for the care of a designated domestic animal. The trust terminates when no living animal is covered by the trust, or at the end of 21 years, whichever occurs earlier.
A living trust allows for the transfer of assets to designated beneficiaries while avoiding the court probate process. Once a trust is created, the trust creator (grantor/settlor) transfers his estate to the trust and the trust becomes the entity that owns and holds the property of the trust grantor. In addition, the trust becomes an entity that will be required to obtain a tax identification number and file a tax return.
If a trust sounds too complicated, you might prefer to include a provision in your will for the care of a pet. In this regard, first think of someone that is willing to give your pet a good home. The person that you select will be gifted the pet in the will and become the new owner of the pet. In addition, the personal representative will be directed to give sufficient funds from the estate for the care and well-being of the pet.
Plan, Prosper & Live Well
Contact Macomb Estate Planning today for your estate planning needs.
