Estate Planning is a difficult matter to discuss. It doesn't just mean making a plan to distribute your property after you pass but for your later years to ensure that you are properly cared for according to your wishes. You have to plan to pay for nursing home if it becomes necessary. You have to plan in the event that you become disabled. A proper estate plan takes into account your needs for a Durable Power of Attorney for your affairs, Durable Power of Attorney for Health Care, Medicaid spend down for eligibility to qualify for nursing home care, and of course a properly drafted will and trust. Estate plans can be very simple or extemely complex.Michigan Wills and Trusts
A Will is an essential document in the estate plan. Even if you set up a Trust you need to have a will to pour-over property outside of the Trust into the Trust after you pass. You can avoid an issue regarding the guardianship of your minor children by naming them in the will. You can also own property jointly with rights of survivorship or an account with a paid on death beneficiary designation. Most Individual Retirement Account's ("IRA") and 401k plans all have beneficiary designations that will allow you to pass the property outside of probate without a Will. If you die with property that is not properly designated or transfered to a Trust then your property will pass as laid out by Michigan Law that may not comport with your estate planning goals. A trust is an effective estate planning tool to give property according to specific terms. Putting property in trust transfers it from your personal ownership to the Trust. The Trust has legal title to the trust property. The property can be any kind of property--money, real estate, stocks, bonds, collections, business interests, personal possessions and automobiles. A Trustee, which may be the Grantor, manages the property in the way specified in the trust. Trusts can be very simple, intended for limited purposes, or they can be very complex, making gifts two or more generations from the Grantor, and providing tax benefits and protection from creditors of the beneficiary. You can include any provision you want in a trust, as long as it doesn't conflict with state law. When you approach a lawyer to help you set up a trust, make sure he or she is willing to work with you to tailor the trust to your particular needs; otherwise flexibility is wasted, which is the primary benefit of trusts. It's another reason to avoid those prefabricated, all-purpose trusts you see in self-help books. A good lawyer will provide you with a financial analysis to show how much you might save over time by structuring your trust in certain ways. Make sure you choose a lawyer who's familiar with estate planning, trusts, and, if your trust is used for saving taxes, tax law. IRS regulations governing trusts change often, and the agency has always given trusts special scrutiny.Intestate Succession
A surviving spouse takes the following portion of an Intestate estate:
- All of the estate if there is no surviving parent or descendant of the deceased.
- The first $150,000 plus three-fourths (3/4) of the balance of the estate (if any) if there is no descendant of the deceased surviving but there is a parent surviving.
- The first $150,000 plus one-half (1/2) of the balance of the estate (if any) if the deceased is survived by any descendants, and at least one of them is also a descendant of the surviving spouse.
- The first $100,000 plus one-half (1/2) of the balance of the estate (if any) if the deceased is survived by any descendants, and on one of them is a descendant of the surviving spouse.
The portion of an Intestate estate NOT given to the surviving spouse (or all of the estate if there is no surviving spouse) is distributed as follows:
- To the decedent's descendants by "representation."
- If there are no descendants, to the decedent's parents.
- If there are no descendants or parents surviving, then to descendants of the parents (i.e., siblings and their descendants by "representation").
- If no one in these first three categories survives, then one-half of the estate is allocated to each of the maternal and paternal grandparents of the deceased, and is distributed to them or their descendants by "representation."
A person must survive the decedent by 120 hours in order to take a share of the estate
An adopted person is considered to be part of their adoptive family for purposes of intestacy and is NOT part of their natural family for this purpose. Stepchildren take no share of a stepparent's intestate estate.
"Representation" means that the estate is divided equally among a decedent's surviving children, for example. If one of the children dies before the decedent, and if that child left children surviving them, then the deceased child's share is divided equally among their children.