Conservatorships and Guardianships
? Why do I need a Will?
If you die leaving assets in your name without a
Will directing where your assets are to go, the State of Michigan
will step in after you die and decide for you. By failing to have
an inheritance plan in place, you have decided to rely on the law
to write your inheritance plan. The law concerning distribution of
assets in such circumstances may not conform to your wishes
especially in circumstances involving second marriages, minor
children, charitable giving, unequal distributions among children
or grandchildren, or giving to non-family members.
? Why not just
hold everything jointly?
Joint ownership of assets between husband and
wife is a common method of avoiding probate upon the first
spouse’s death. After the first spouse’s death, clients often ask
if they should put their children’s names on their assets to avoid
probate. This is a dangerous and inadvisable strategy, as it can
result in your assets being subject to the problems of each person
on title to your assets. If any of your joint co-owners goes
through a divorce, bankruptcy, automobile accident, owes taxes to
the IRS or experiences unforeseen financial difficulty,
their creditors can come after your jointly held assets.
Another drawback occurs if you decide to sell,
mortgage or transfer your jointly held assets. Once you have
added joint owners to your assets, you will need their permission
to dispose of or encumber those assets. While no one
anticipates this to be a problem when they set up joint accounts
it can lead to difficulties if your joint co-owners do not agree
to disposing of what they now consider their joint property.
? What exactly is a living trust?
A living trust is a separate legal entity, like a
corporation, created to hold and manage assets. After
creation of your trust, assets are transferred into the trust and
managed according to your wishes. Once created, the living
trust takes effect immediately and can be changed as often as you
wish while you are alive and competent. At your death, the trust
assets can be distributed to your beneficiaries and terminated, or
it can continue into the future with your assets distributed to
your beneficiaries over time and under the conditions you have
directed in your trust.
Some of the benefits of a living trust are:
-
avoiding the costs and delay of probate
-
providing for the future educational needs or
support of children or grandchildren
-
providing for the special needs of a
handicapped or incapacitated relative
-
providing a structured method for
administering your affairs if you become
incapacitated
A revocable living trust is a flexible, adaptable
and easily created instrument that will direct the distribution of
your assets during your life and when you are gone. After
giving careful thought to your objectives, I will be happy to sit
down with you and create a trust to achieve your purposes.
?
What is a special needs trust?
A special needs trust is an irrevocable trust
created to benefit a beneficiary with a disability. The
trust is designed to allow a person under a disability or a
chronic illness to hold trust assets without the assets being
considered for purposes of qualification for governmental
benefits. The trust is set up to provide for the extra care
over and above that which the government may provide, for the
disabled or chronically ill person.
? What is probate?
Probate is the process by which a deceased
person’s assets are distributed to his or her heirs. The "probate
estate" includes the property of the person dying whose titles are
in the name of the person dying or his or her estate (such as
houses, cars, or bank accounts that are only in the name of the
person dying). The title to these probate assets has to be changed
to someone other than the deceased -- this is the purpose of
probate.
? How much does
probate administration cost?
The cost of settling an estate through probate
administration depends on the assets in the estate and whether
there are any disputes. Generally, the more valuable and diverse
the assets in the estate and the more disputes, the greater the
cost of administration. This is because large estates
require more time and work to liquidate all assets. Any
disputes between beneficiaries must also be resolved before
creditors can be paid and distributions made to beneficiaries.
Attorney fees for probate administration are
calculated on an hourly rate. Some small estates will qualify for
summary proceedings which greatly reduce the amount of work and
therefore costs of probate. In all estate proceedings, I
work closely with the client to determine the most cost effective
and timely plan for administration of the estate.
