Michigan Estate Planning Lawyer Blog

With Michigan Estate Planning, there are a few basic things that you need to know.

First, no matter what your net worth is, how much in assets you have, how much debt you have, you need an estate plan. In Michigan, once you turn 18 you are legally an adult. So, even if you're a college age adult who lives at home with your parents, there is a certain level of estate planning that should be done. That is you need, what our office calls, a disability plan. A disability plan plans for your disability or incapacity.  We would put together a Patient Advocate Designation (which is the Michigan equivalent to a health care power of attorney), HIPAA Authorization, and a Financial Power of Attorney that most likely would name your parents as decision makers and agents.

Now that we've established that if you're over the age of 18, you need the disability documents, the next step would be once you have assets (now matter how meager) or children, it is important to plan for your assets and children.  This is done through using Revocable Living Trusts and Last Wills and Testaments.  Whether you opt for a Living Trust based estate plan or a Will based estate plan will depend on your goals.  Remember a Last Will and Testament only gives instructions to the Michigan Probate court on how to administer your estate, it does not avoid probate.

Lastly, it is important to consult a Michigan estate planning attorney in preparing your estate plan.  Proper Michigan estate planning involves more than buying Nolo Willmaker software or reading the latest Suze Orman Trust Kit book.  It involves analyzing your goals and situation and using the estate planning tools we've discussed in the most effective and cost effective way.

Our Bloomfield Hills Probate Lawyer office helps individuals and families with Michigan estate administration issues on a regular basis. One thing that I must remind clients of many times, is that the Michigan probate process is generally, not as quick and easy as you would like it to be.

If you do not have a properly funded trust based estate plan, there is a very good chance that your estate will end up under the jurisdiction of the Michigan probate courts. That may not be a bad thing, but you have to understand that if your estate is in the Oakland County Probate Court system, Macomb County Probate Court system, the Wayne County Probate court system, or any other Michigan Probate Court system, there will certain hurdles and hoops that will have to be jumped through.

In addition to jumping through certain administrative hoops, you have to understand that there are certain statutory requirements that each probate court requires. Even if the Michigan probate matter is an unsupervised, informal probate case. You still need to keep the probate estate open for a at least 5 months. You still have to publish a notice to creditors. You still have to complete the inventory in a timely matter (within 91 days of appointment).

Maybe it is a failure on my part to educate and explain that even with a Michigan probate lawyer handling the administration, I can't wave a magic wand and bypass all the requirements of the Michigan probate court process.

Well, I take that back. I can, its called proper Michigan estate planning. Through proper planning (typically a living trust based Michigan estate plan that is properly funded) you can avoid the probate court completely. A Michigan Will does not avoid probate, no matter how pretty the backing or how long the document. A Michigan Last Will and Testament is your ticket to the probate system.

This isn't to bash the Michigan probate system either. I love the people at the probate register and the staff. But, the public needed to understand that there are certain rules and formalities involved and most of the time those rules and formalities were put in place for a reason.

That said, by working with an experienced Michigan probate lawyer, we can navigate the process to minimize the work, stress, and excess costs to make the process as smooth as possible, but we have to follow the rules and jump through the hoops.

There are quite a few myths regarding Trusts, Wills and Estate Planning. A recent USA Today article address some of these myths. The article interviewed two colleagues from WealthCounsel, which is a national association of estate planning attorneys.

The myths that the article addresses include:

1. Estate planing is only for the rich.
2. If I die without a Will, everything will go to my spouse.
3. I have a Will, my estate wont go through probate.
4. After I create my Last Will and Testament or Living Trust, I'm set.
5. I could be held responsible for a deceased parent's debts.

You can read the article in its entirety here: 5 Myths about wills, and what you should do.

While overall, the article is well written, I do have one large point of contention.  The article suggest that some of the do-it-yourself options are viable, such as Legalzoom, Suze Orman Trust Maker, or Quicken Willmaker.  Read some of my past posts on why these options can be even worse than having no estate plan at all.

With the baby boomers aging, the largest amount of wealth in history is passing from one generation to the next. Unfortunately, people are procrastinating on their estate planning until it's too late. 

Over at the greenbaypressgazette.com, they have an interesting article that discusses how to prioritize the details in estate planning which you can read here:  "Guest column: Tim Cisler Prioritize details in estate planning."

From the point of view of a Michigan estate planning attorney, there are a couple key points that I would like to reinforce from the article.

First, don't underestimate the value of your assets.  Sure the economy is down, that said, your estate could include your residence, your retirement accounts, your savings, and possibly your life insurance.  Add all those pieces up and you may be surprised at the value.  Regardless of the size, you most likely would want to protect those assets from needless expenses, for example the expense of opening a Michigan probate.

The next key point is to keep your beneficiaries designations updated on your assets, including life insurance, retirement accounts, deeds to property.  Just because it made sense at one point to name a family member the beneficiary of the IRA, doesn't mean now or in the future it would make more sense to name the living trust the beneficiary.

Lastly, know the difference between a probate estate and a trust.  People think that just because they have a Michigan Will, they will avoid the Michigan probate system.  Not true, a Michigan Last Will and Testament is your ticket to the Michigan probate system.  If you want to avoid a Michigan Probate, then a living trust would be a better option.

Christopher J. Berry, Esq., A Bloomfield Hills Wills and Living Trust Attorney, is a Partner with The Law Offices of Witzke Berry PLLC, which practices in the areas of Bloomfield Hills  Estate Planning, Bloomfield Hills Medicaid Planning, and Bloomfield Hills Probate Litigation, serving Metro-Detroit and Oakland County, Macomb County, and Wayne County.  We can be reached at 248-971-1700.

After a spirited discussion with another estate planning lawyer, I wanted to share some insight into the questions of who needs a living trust (revocable living trust). As a Michigan estate planning attorney, a common question I hear is "do I need a living trust?". Like all questions posed to attorneys, the answer is "it depends."

Let's walk through a  scenario.  Take a young married couple with a new born baby.  They have a house and one of the parents has some life insurance.  Assuming they had a will based estate plan, but no living trust or testamentary trust and they had passed away in a car accident here is what would happen.  

First, guardianship of their baby would probably be handled in the last will and testament.  A Michigan probate would have to be opened.  The house would of course have to be probated.  Most likely the life insurance would not be probated because typically parents in this situation would name their child as a contingent beneficiary.  Likewise for any retirement accounts.  However, the retirement accounts and life insurance still are not handled in the best way because what happens now is that a court supervised conservator will have to be established to handle the financial management of any assets left to the child, since the child is a minor.

So, initially you are looking at 6-12 month Michigan probate process to transfer the house out of the deceased parents names.  Most likely thousands of dollars in legal fees and court costs.  That's not the end of it though...

You also now have a 17 year living probate case that needs to be opened.  The conservatorship for the children must be established.  That means that for 17 years the Michigan probate court will be involved monitoring the activities of whoever was appointed conservator along with all the fees, costs and hassles that go along with the court process.

What a mess.  That's not all.  At age 18 that child will now inherit everything in a lump sum that the conservator was managing.  Regardless of the size of that inheritance, at age 18 if you had a lump sum of money in your bank, would you make good decisions with it?

Now, lets say they had a Michigan living trust based estate plan.  They've passed away.  Immediately the person they've named as trustee who is a family member or family friend now manages the assets for the children and ensures the assets, including house, life insurance, and retirement accounts.  There is little to no court involvement, there is no time consuming, costly Michigan probate, and there is no 17 year long living probate with a conservator and court monitoring.  Plus, the trust that was set up can push the child towards college with incentives and can distribute assets at a later age, say 25, 30 and 35, when the child is more mature to handle the money.

Now if you are a parent with a young child, you don't have millions, but you want to ensure your child is protected and that if something happened to you, things would be handled in a way not only best provided for your child, but also that was as low stress as possible given the situation, which scenario would you choose?

Do you need a living trust?

Christopher J. Berry, Esq., A Bloomfield Hills Probate Litigation Attorney, is a Partner with The Law Offices of Witzke Berry PLLC, which practices in the areas of Michigan Living Trusts, Living Wills, and Michigan Probate Litigation.

Financial Durable Power of Attorney. Many people focus their time and need only on the last will and testament (or living trust) or medical directive. How do I know? Because 9 times out of 10 when a potential client contacts us they ask for a will, living trust, or living will. Hardly anyone ever asks initially for a financial durable power of attorney (otherwise known as a DPOA).

A Michigan financial durable power of attorney allows someone else to make decisions regarding financial matters. The durable power of attorney can become effective either upon incapacity or immediately.

The purpose of the Michigan financial durable power of attorney is to allow someone else to be able handle all financial matters. This includes handling business interests, buying and selling real estate, paying bills, and even making gifts and authorizing Medicaid planning.

The Michigan financial power of attorney is a powerful document that should not be used lightly or prepared haphazardly. The drafter of the document must be careful in choosing which powers to include and which powers to exclude. Additionally, specificity is very important in the document. Many of the Legalzoom, Quicken Willmaker, or Suze Orman, do it your self documents are over broad and can be dangerous in the wrong hands to the creator. This is why it is important to see an experienced estate planning lawyer to assist you by drafting a quality financial durable power of attorney.

Christopher J. Berry, Esq., A Bloomfield Hills Living Trusts and Wills Attorney, is a Partner with The Law Offices of Witzke Berry PLLC, which practices in the areas of Estate Planning, Trusts and Estates, and Michigan Probate Litigation.

The confusion over whether Michael Jackson had a will based estate plan or a living trust based estate plan probably led to the AP article discussing the differences between a will and living trust. You can read the article, including the Michael Jackson reference here: Will or Trust? Understanding the differences.

As the article explains, a will based estate plan is typically used when you're only making one time distributions to individuals and do not care that your heirs have to use the Michigan probate court to administer the estate.

A living trust based estate plan avoids probate and also has provisions so that you are not leaving lump sum assets to beneficiaries.

Christopher J. Berry, Esq., A Bloomfield Hills Living Trust Attorney, is a Partner with The Law Offices of Witzke Berry PLLC, which practices in the areas of Estate Planning, Trusts and Estates, and Michigan Probate Litigation.

Ever wonder what the absolute essential Michigan Estate Planning documents are? Well, Business Week put together a list, from caregiving.com listing the essential documents for any estate plan not including a Will. You can read the article here: The Essentials.

The key estate planning documents, according to the article, are:

• Medical Directive. This is also commonly called a living will.  This document makes known your wishes regarding life support.  Michigan is the only state that does not recognize by statute a living will.  However, we do have case law stemming from the Martin case, that recognizes living will type language.
• Durable Power of Attorney for Health Care. This document appoints someone to make your medical decisions for you if you become incapacitated.  In Michigan, we call this document the Patient Advocate Designation.
• Privacy Release.  This document allows your patient advocate to get access to your medical directives.  In our office we call this a HIPAA Authorization.  HIPAA places severe penalties on physicians who release your medical information to an unauthorized party.  The HIPAA Authorization releases the physician from liability for sharing your information with the individiuals named in the document.
• Durable Power of Attorney for Finances.  The individually tailored durable power of attorney appoints someone to manage your finances for you.  The document can be effective immedialty or upon disability.
• Revocable Living Trust.  A Revocable living trust allows you to avoid probate while exerting more control over your assets than what a last will and testament would provide.

It goes without saying, these documents should be prepared by a Michigan Estate Planning Attorney.

Christopher J. Berry, Esq., A Bloomfield Hills Elder Law Attorney, is a Partner with Witzke Berry PLLC, which practices in the areas of Estate Planning, Michgian Long-term Care Planning, and Michigan Medicaid Planning.

As Michigan Wills and Trusts attorneys, we've reviewed many estate plans during our 25+ years of practicing estate and business planning. Many people think they are "all-set" because they had an estate plan done years ago. They have their revocable living trust, their last will and testament, their disability documents including powers of attorney for financial decisions and medical power of attorney for health care decisions. 

Unfortunately, we've seen to many cases where, in reality, they were not all set and if something had happened they would have been better suited to rely on Michigan laws of intestacy than what their estate plan said.  Luckily, because of our reviews we've been able to remedy the situation.

So what's the main problem?  Typically one of two things. 

First, clients may have funded their revocable living trust properly at the time of the creation of their estate plan documents.  But over the years as they have changed accounts, bought life insurance, purchased the new house, they didn't consider the effect on their estate plan and they failed to fund the trust properly.  This is the main reason we offer annual reviews to our clients to ensure their trusts are funded properly.

The second major issue is caused by changes in family situation that should be reflected in the estate planning documents.  Depending on how the documents are written and the change in family situation, this can lead to the disinheritance of beneficiaries the grantors thought they were including in the estate plan.  For example, unexpected deaths, births or divorces can all play a major role in the dispositive terms of anyone's estate plan.

What is the solution to ensure that your estate plan is up to date?  An annual review with your Michigan estate planning attorney.  We have a system in place at our Bloomfield Hills Law office to ensure that our clients have the opportunity to come in for an estate plan review and make any changes necessary to their estate plan so that their estate planning documents are as good tomorrow as they were the day they were drafted.

Christopher J. Berry, Esq., A Oakland County Trusts and Wills Attorney, is a Partner with The Law Offices of Witzke Berry PLLC, which practices in the areas of Estate Planning, Trusts and Estates, and Michigan Probate Litigation.

You can now view Michael Jackson's last will and testament, since it is a public, court document. View it here: Michael Jackson's Last Will and Testament.

Some very interesting initial points.  First, Diana Ross was named as back-up guardian to the children.  Secondly, Michael Jackson has specifically made provisions to exclude his ex-wife Deborah Jean Rowe Jackson.

It looks like Michael Jackson has set up the Michael Jackson Family Trust, judging by the Jackson's will.  This is a good thing since a living trust is a much more private document and will be kept out of the public's eye.

Most likely the Michael Jackson Family Trust will control the disposition of the assets for the benefit of family members and children.  On it's face, this is the right step in terms of estate planning. However, it is important also to put the right assets into the Trust.  We most likely will not be able to see how the trust was funded. 

• Did he have life insurance that named the trust as a beneficiary?
• Were there bank accounts that were held in the name of the trust?
• What about his business interests?
• Will the assets have to be probated then "poured-over" into the trust, making the assets public or was the trust funded correctly?

So we have more answers and some signs that his estate planning was set up in a logical manner from an outsiders view, but we still have some important questions to answer to decide if he had an effective, well planned comprehensive estate plan set up.

Also visit South Florida Estate Planning Lawyer, David Shulman's blog, as he is also covering the Michael Jackson Estate saga and providing insight as an estate planning lawyer.

Christopher J. Berry, Esq., A Michigan Estate Administration Lawyer, is a Partner with Witzke Berry PLLC, which practices in the areas of Estate Planning, Elder Law, and Michigan Probate Litigation.

The loss of a loved one, especially a spouse can be a devastating, emotional experience. Added to the stresses at the time are the estate administration legal aspects of what needs to be done. Unfortunately, avoiding costly Michigan estate administration mistakes needs to be addressed at this time as well. Sitting down with a caring and compassionate Michigan estate planning attorney is important to protect the surviving spouse and to ensure that the surviving spouse protects his or her assets for his or her enjoyment.

When sitting down to handle the administration of the deceased's assets, one area that needs to be addressed immediately is "disclaimers". Should the surviving spouse disclaim any property so that it flows through to the next beneficiary. There can be huge tax implications to this. Additionally, we need to check to see how any trusts are funded, especially if the initial estate plan contemplated planning for the Federal Estate Tax.

Next property issues must be analyzed. How were the deceased's spouses assets owned? Will their have to be a probate, or were assets jointly owned or in trust? Hiring an estate planning or Michigan estate administration lawyer can help you walk through these important questions in a timely manner.

After a period of time, one of the issues that pops up for a surviving spouse is remarriage. Remarriage can have drastic effects on the distribution of assets to children. This is one the most common reasons that children are "accidentally" disinherited.

Christopher J. Berry, Esq., A Michigan Elder Law Lawyer, is a Partner with Witzke Berry PLLC, which practices in the areas of Estate Planning, Elder Law, Michgian Probate.

An estate planning lawyer in New Jersey, Victor Medina, has a short, insightful post regarding the advantages of a living trust based estate plan versus a last will and testament based estate plan.  You can read it at the New Jersey Estate Planning website.

His answer, "Whether you have a will or a living trust doesn't matter if the plan isn't tailored to meet your goals!"  I agree!

-Christopher J. Berry, Esq.
Bloomfield Hills Will and Trust Attorney

Is a Michigan probate always necessary?  The answer is no.  A Michigan probate is not necessary if all of the deceased's assets pass through joint ownership, direct transfers or through trust.  Probate is just one of the ways that assets can pass at death, it is not the only way. 

For example, a husband and wife own a joint bank account.  The husband passes away.  By title of the account, the bank account now is solely the wife's.  No probate necessary.  However, say the wife does nothing with the account, does not put into a revocable living trust, and passes away.  Well, now title is in her name alone, and now her heirs must most likely open up a Michigan probate administration to transfer the asset from her estate to a beneficiary.  So, through joint ownership, you can avoid probate on the first death.  But keep in mind two things:

1.   On the second death if nothing is done, there will be a probate, and 
   
2. Naming accounts or real estate jointly with someone other than your spouse can open a whole can of worms.  Sure you are avoiding probate by naming your daughter on title to your house or jointly on your savings account, but you could be opening yourself up to lawsuits, divorces, creditor actions and bad acts by the person you just named jointly, not to mention unintended tax consequences, such as a loss of a step up in basis.

The same principals apply to IRA's and life insurance.  If there is a named beneficiary, then the account will avoid probate.  If there is not a named beneficiary, then the asset must be probated to transfer the assets to the heirs.

Trusts, including revocable living trusts, are the third way assets may be transferred to avoid probate.  Typically, after reviewing the pros and cons of setting up a trust, most clients prefer to rely on the properly funded living trust to pass their assets to the next generation, versus relying on probate or the other methods.

As you see, I haven't mentioned the use of a will or last will and testament, to avoid probate.  The reason for this is that a Michigan last will and testament does not avoid probate, it merely gives instructions to the Michigan probate court on how to administer your estate in the Michigan probate system.  A will is your ticket to probate, it doesn't avoid probate.

-Christopher J. Berry, Esq.
Oakland County Estate Planning and Probate Lawyer

Michigan Estate planning often does not get the attention it deserves.  It is more exciting to talk about saving for your kids education, purchasing a second home, or deciding how to retire.  Unfortunately, ignoring what happens to your affairs when you pass away will not prevent the day from happening, regardless of the size of your estate.

The New York times had an interesting article on the matter, which you can read here.

Two important issues include:

• Last Will and Testament.  Everyone should have a Last Will and Testament.  Your Will is a document that names guardians for dependent, minor children and can provide instructions to the probate court on how to distribute your assets.
• Advanced Medical Directives.  Anyone over the age 18 in Michigan NEEDS to have prepare a patient advocate designation to appoint someone to make medical decisions if they are incapacitated.  Think of the Terri Schiavo case down in Florida if you need any reminder of what can happen if you don't do this planning.

On top of these documents, other things to think about in estate planning are Trusts, Financial Powers of Attorney, and HIPAA Authorizations.  Also, don't forget to look at how all of your assets are titled.

There is quite a bit that goes into preparing a comprehensive Michigan estate plan.  The sooner you start the process the better of you and your loved ones will be if something were to happen.

-Christopher J. Berry, Esq.
Bloomfield Hills Trust and Estate Planning Laywer

Many clients ask us what are the benefits of having a revocable living trust in Michigan.  There are a few benefits to a properly planned living trust prepared by a Michigan trust and estate planning lawyer.

First, a properly funded living trust can avoid the Michigan probate process.   Assets that pass through a living trust from the grantor to the beneficiaries or that are held in trust for the beneficiaries avoid the Michigan probate system.  A last will and testament does not avoid probate.  A Michigan living trust will avoid Michigan probate, if properly funded.

Second, as a grantor, you are able to exert far more control over your assets and how the are distributed.  For example, you could create a Michigan revocable trust where, when you pass away, your assets are held in trust for the benefit of your children for a period of time, shielding those assets from poor financial decisions of your children or lawsuits, or creditor claims.

Third, you are able to do sophisticated Federal estate tax planning strategies. 

Most people look to the living trust for the first two benefits, probate avoidance and control over their assets. 

If you have any questions on how to set up a properly drafted Michigan living trust, please contact a Michigan estate planning lawyer.

-Christopher J. Berry, Esq.
Bloomfield Hills Trust and Estate Lawyer