WILLS & TRUSTS
I help clients prepare estate planning documents that reflect the client's goals, responsibilities, and resources. These documents include wills, trusts, medical powers of attorney (living wills), and general powers of attorney for business and financial affairs.
A last will and testament could possibly be the single most important legal document a person can have. Even if you do nothing else to handle your personal legal affairs, you should have a will. Under Michigan law, if you do not have a will when you die, you will be deemed to have died "intestate." This means that your property and assets will likely be distributed according to the dictates of the Michigan Estates and Protected Individuals Code (EPIC), even if the result is not what you would have preferred.
Even more important, if you have minor children when you die and do not have a will, a court will have to determine who will raise your children. How complicated (and long) your will has to be depends on your particular circumstances.
Whether simple or complicated, all wills tend to have the same basic outline:
- They leave a person's property and assets to the people and entities they choose;
- For persons with minor children, they name one or more guardians to take care of those children if both parents die;
- They name a person's "personal representative" (sometimes called an "executor") to administer the person's probate estate after they die.
When a person dies and there needs to be a probate estate, their personal representative is able to take the appropriate action to open that person's probate estate with the local county probate court. A personal representative is a "fiduciary," which means that they have a legal obligation to follow the instructions in the will for administering the deceased individuals probate estate and distributing their property and assets.
Trusts can be a very useful legal tool for helping to preserve a person's property and assets, and administer their affairs. Trusts can also play a crucial role avoiding the probate process altogether and in reducing the amount of estate taxes that may be due from a person's estate after they die. A trust is simply a legal arrangement whereby one person -- the "trustee" -- holds legal title to assets and property that have been transferred to the trust, all for the benefit of the trusts "beneficiary." A trustee is a "fiduciary," and has a legal obligation to administer the trust per the instructions that are contained in the trust agreement.
Perhaps the most common and well known type of trust is the "revocable living trust." A revocable living trust is simply a trust that a person creates while they are still alive. Typically the person who creates the trust (usually called the "settlor" or "grantor") also serves as its trustee and its primary beneficiary. The trust agreement will have provisions for the management and distribution of the trust's assets and property after the death of the person who created the trust. There are many other kinds of trusts, such as irrevocable trusts, charitable trusts, special needs trusts, and even pet trusts that provide for the care of your pets after your death.
It is very important that you retain a qualified legal professional to prepare your trust agreements. There are many pitfalls and traps for the unwary that can turn what should be a useful tool to manage assets, care for your loved ones (or pets), avoid probate, and reduce estate taxes into a source of much confusion and unintended negative legal and tax consequences.
Medical Powers of Attorney (Living Wills)
The Michigan Estates and Protected Individuals Code (EPIC) specifically authorizes the creation of medical powers of attorney. These documents allow an individual to express and communicate their wishes and give specific directions regarding their medical care should they become unable to do so in the future.
Generally, this type of document has three components. First, it allows a person to express their general, overall wishes for their health care should they ever become unable to express or communicate how they want their health care to be handled in the future.
Second, they allow a person to provide care instructions for specific situations that may arise in the future. For example, if a person is in an accident and suffers an irreversible brain injury that leaves them in a persistent vegetative state with no hope of recovery, if they previously prepared a medical power of attorney with instructions on how to handle this type of situation, medical personnel are generally obligated to follow those instructions.
Third, a medical power of attorney also allows a person to designate a "patient advocate" who will be in charge of that person's medical care if they are unable to express or communicate their wishes. Further, the patient advocate is generally bound by the wishes expressed by the patient in their medical power of attorney document.
Medical powers of attorney are powerful documents that can provide peace of mind to the person who signs it, as well as to their family members should difficult decisions ever have to be made regarding that person's medical care when they are unable to express or communicate their wishes.
General Powers of Attorney
A general durable power of attorney is simply a legal document that allows a person to appoint an agent to handle specified affairs on their behalf. The person who appoints an agent through a power of attorney is known as the "principal." Powers of attorney can be "durable" or "springing."
A durable power of attorney is effective the moment it is signed. It allows a person's appointed agent to immediately "step into the shoes" of the principal and generally handle their personal, real estate, financial, and business affairs, including signing documents on their behalf. A durable power of attorney is primarily used for the convenience of the principal, such as in situations where they may be out of town and need their agent to handle certain affairs for them. They can also be used in situations where the principal becomes mentally incapacitated and is unable to manage their affairs.
A "springing" power of attorney only becomes effective when a contingency that is specifically included in the power of attorney document comes to pass. For example, a "springing" power of attorney may specify that it becomes effective only upon the principal's mental incapacity and will revert to being ineffective or null when the principal regains his or her faculties.
A powers of attorney is a very powerful legal document. Agents who are appointed under power of attorney documents are "fiduciaries." They must act in the best interests and for the benefit of the principal in all respects. However, given the legal power and authority that these documents give to agents, it is important that the principal only appoint an agent whom they fully trust to manage their affairs in a way that serves the principal's best interests. As with the other estate planning documents described on this page, it is important that you work with a qualified attorney to prepare or review any power of attorney that appoints an agent to serve your interests.
I engage in close and careful consultation with my clients so that I prepare documents that are custom fit for each client's particular situation. I never give a client a one-size-fits-all will, trust, or other estate planning document. Rather, I prepare my clients' estate planning documents so they will accurately and effectively speak to their wishes and goals.
Whether you have never had any estate documents prepared before, or something has changed since you had a will prepared, or you would just like a review of your current estate plan documents, feel free to contact me assist you with your estate planning needs.