As a Michigan elder law and estate planning lawyer, I draft elder law focused estate plans that encompass transferring assets to your heirs with the least amount of taxes, court costs and legal fees possible, while at the same time protecting those assets from the costs of long-term care. Trusts are often preferred over wills because they are private documents that avoid the cost and duration of a court proceeding, called probate, after death.

To ascertain the best elder law estate plan for a client, there are four major steps.

The first key is to understand the family dynamics. Many questions are asked. How old are you? How is your health? Is this a second marriage? How does everyone in the family get along? Is anyone estranged and, if so, why? Are any of the beneficiaries disabled and on government benefits? Are there any deceased children, and if so, are there any surviving grandchildren? Do you want to transfer assets on death to your children in a lump sum or do you want to exert more control over the distribution of the inheritance? Sometimes clients find these types of questions intrusive, but without such information, an elder law estate plan is not tailored to your life.

The second step is to review any current estate planning documents such as a will, trust, power of attorney, health-care proxy and living will to see if the plan is up to date legally and whether it meets the client’s goals. Again, questions must be asked. Are you a U.S. citizen (this is important to determine estate tax liability)? Are you expecting an inheritance? Do you have long-term care insurance and, if so, what is the daily benefit, among other details of the policy (this helps determine if the coverage is adequate to protect assets from nursing home costs).

The third step is to review the assets, including how they are titled, if any assets are “qualified plans,” such as IRAs and 401(k)’s, who the beneficiaries are, and the value of the assets. If they are IRAs, we tend to look to IRA Trusts to manage the asset.  The asset list reveals if there will be a probate proceeding, if estate taxes will be owed and whether the client may need to think about protecting assets from nursing home costs.

The fourth step is to develop the elder law estate plan. You determine who will make medical decisions for you if you are unable to and who you will appoint to handle legal and financial affairs through a power of attorney if you’re incapacitated. The type of trust is selected, unless a will would suffice. The trustees for a trust are chosen and executors for a will. Much care is given to selecting your agents and how assets are distributed so that as smooth a transition as possible is planned upon death or disability.

Once the plan is in place, a review should be held every year to do a review.  In our Oakland county elder law and estate planning office we have a system set up called the Family Protection Plan. Having a will tucked away in a drawer for 20 years is not an up-to-date plan that will work when needed. An elder law estate plan is a living plan that requires periodic review.

Thanks to Bonnie Kraham and her article.

Attorney Christopher J. Berry is a Metro Detroit estate planning and elder law lawyer who helps families, seniors, veterans and business owners with their important legal needs. Oakland County estate planning lawyer, Christopher Berry is a partner in the Bloomfield Hills law firm of Witzke Berry PLLC. Mr. Berry practices in the areas of estate planning, business, probate, veterans benefits & Medicaid planning.