Who, What, When, Why of Estate Planning
At one point or another, everyone has had the thought that they should talk to an attorney about their estate plan, or update their will and powers of attorneys. Frequently these thoughts arise following the death of a family member, or a life-threatening event. But what does it mean to have an attorney draft an estate plan for you and your spouse? Why are estate plans an integral part of everyone’s contingency plan? Who should have an estate plan?
Let us explore . . .
WHAT IS AN ESTATE PLAN
All property that we own, tangible and intangible, is what we call an “estate.” Under common law, an estate is the sum of a person’s assets — legal rights, interests and entitlements to property of any kind — less all liabilities at that time. This includes your home, bank accounts, retirement accounts, any businesses you have an interest in, etc. In its simplest form, an estate plan is an individual’s direction to a third party, typically a Personal Representative or Trustee, regarding his / hers / their personal and financial affairs after death.
WHY ARE ESTATE PLANS IMPORTANT
State law governs all matters surrounding an individuals death, including the transfer of assets. Through a process called Probate, individuals who die without a will are considered to have died “intestate,” meaning they did not make a will prior to death. So when a person dies without a will, their estate is administered through the probate state courts under State law governing the same. Oftentimes this process is long, taking months for the court’s to sort out who is entitled to what, and costly, including court fees, attorney fees, and fees paid to the Personal Representative, the individual(s) who manage the estate.
Through the use of estate planning, much, if not all of probate can be avoided entirely. Additionally, going through probate, how one’s estate is distributed out to their family and descendants is governed entirely by State Law. Estate Planning helps avoid equal distributions to all family members, as governed by State Law, by providing an individual greater control over their affairs. Taking advantage of estate planning instruments, such as a Will or Trust can provide the peace of mind that your assets and estate will be distributed to those you love and care about in the manner you want it to. These documents allow you to include or exclude individuals, determine how much or how little different individuals receive upon your death, and even allow you to achieve certain charitable goals follow your death. Additionally, estate plans also can assist in giving you the ability to designate certain individuals, such as a spouse, friend, or parent, the ability to make medical decisions on your behalf if you are not able to and receive medical information from your doctors.
WHO ARE ESTATE PLANS FOR
If an estate plan is the mechanism that an individual uses to provide direction regarding his / hers / their personal and financial affairs, then next question that should be asked is who, exactly, are estate plans for? In a word, EVERYONE! Put another way, estate plans are not just for the rich and famous, if you have any assets, even if it is just an bank account, it is always worthwhile to speak with an estate planning attorney because estate plans cover more than just financial aspects of an individuals life, estate plans can be crafted to give decision making abilities to your significant others or family members during a health crisis, and let hospitals or other health care providers give the people of your choosing information about your medical care. In short, estate plans are wide ranging tools that allow you to have the most flexibility and security in your life. So whether you are in college, just starting your career, preparing for the birth of your first (or third or fourth) child, or getting ready to retire, an estate plan is for you.
While Estate Plans can seem overwhelming, or scary, or not right for you, the truth is that estate plans serve a variety of purposes for all individuals regardless of your background.
Interested in learning more or discussing your estate plan? Reach out to your Estate Planning attorney today.
How I can help
As an estate planning lawyer, I have worked with multiple parents and families on providing tailored estate planning strategies to maximize generational wealth transfers, avoid probate, and protect your assets.
If you are ready to learn more about estate planning and how I can help you and your college age children schedule a free consult with me today by calling my office at 248-522-6272.
Areas I serve
Royal Oak
Bloomfield Hills
West Bloomfield
