Estate planning is the formal process of setting up legal documents including standard wills, living wills, power of attorney agreements and trusts in order to plan ahead for dispersal of assets and guardianship and protection of children in the event of your death, or for medical care and end of life choices if you become disabled or otherwise incapacitated.
No matter what your financial worth is, estate planning is essential for anyone who wants to be sure of the safety and security of their family in the event of their death. This is because estate planning isn't simply about money; it allows you to be assured that your children will be looked after by a guardian of your choice, family disputes will be prevented after your death, and that your family will be as protected from taxes as possible when accessing your assets.
Estate planning is especially important when it comes to tax issues, as there are numerous federal and state regulations that must be followed. To be assured that you have the best plan possible, it is essential to use an experienced attorney. Michigan Lawyers & Attorneys is here to help make sure your estate is fully protected and planned out. You have worked hard for your assets; don't let you family lose out by not knowing about tax regulations that could save them thousands!
Estate planning is also about medical decisions, should you be involved in an accident and suffer an illness that leads to you becoming incapacitated and unable to make your own decisions. You can plan ahead about what type of care you would like to receive, and make sure that your wishes are respected regarding whether you would like to be kept alive at all costs if there is no hope of recovery. This type of planning gives you precious peace of mind and helps reduce stress to your family at such a traumatic time.
Let's take a closer look at the different components that you need to consider when you start thinking about estate planning. Remember, this is just an overview; Michigan Lawyers & Attorneys can help you at every step of the way, with detailed advice for your specific situation.
Perhaps the best known and most common form of estate planning, a will details how your assets, including cash, investments, retirement plans, business interests, property and other assets will be divided after your death. Having a will ensures family members will be taken care of, avoids family disputes, and gives you peace of mind. Without a will, you will have no say over who inherits your assets. For more information on wills, please see our Wills and Trusts page.
Assignment of Power of Attorney
Unfortunately, no one can predict if or when they will become unable to make their own financial decisions, whether due to accident, illness or conditions associated with aging. When you assign power of attorney, the appointed person becomes you agent or 'attorney-in-fact', giving them both the ability to sign your name and so make decisions, and the obligation to act in your best interests. Assigning power of attorney means that your assets are protected if you become unable to make decisions, and avoids losses due to you potentially making poor decisions due to your incapacity.
Power of attorney can either go into effect immediately, if you already feel unable to make these decisions, or only take effect in the future, if you suffer an accident or illness. Assigning power of attorney while you are still healthy avoids your family having to go to court to appoint one if you are incapacitated.
A Living Will or Medical Power of Attorney
A living will, also known as an advance medical directive, deals with what will happen should you become terminally ill and unable to communicate your wishes about your own medical treatment. A living will details what kind of life-sustaining treatment you wish to receive, in cases where you are terminally ill, with little to no hope of recovery, only the possibility of being maintained in your incapacitated state. Although different states have varied regulations regarding when living wills can take effect, a living will is always the best way to ensure your wishes are followed as far as legally possible.
A living will avoids such situations as the Terri Schiavo case, where family members have different, strongly-felt desires about the type of care that should be offered, while the wishes of the person in question are unknown. The last thing you want is for family members to be pitted against each other, when they should be offering each other support at this traumatic time.
Medical power of attorney, also known as a health care proxy, is slightly different from a living will, as it covers your medical decisions in all cases when you are incapacitated, not just when you are terminally ill. For example, you may be in a temporary or medically-induced coma after a car accident, but be expected to recover. A living will would not cover this instance, but a health care proxy will be able to make medical decisions during this time. If you do not have strong feelings about what would happen if you become terminally incapacitated, you can assign medical power of attorney only, in which case this person will make decisions in all instances when you are incapacitated, whether or not it is terminal.
Trusts are not just for the very wealthy. If you have over $100,000 in assets, significant interests in property or business, or just want to maximize your tax-free exemptions, setting up a trust may be appropriate. A trust also allows you to support a disabled relative without causing him or her to be disqualified from Medicaid, and for you to place stipulations on the inheritance of your assets, for example withholding large sums from children until they reach a certain age or graduate from college, or providing monies for educational use only before a certain age. Finally, trusts also offer better protection for your assets against lawsuits and creditors. For more information on trusts, please see our Wills and Trusts page.
The Estate Planning Process
An essential first step in estate planning is to take inventory of your assets, including property, investment plans and business interests. Next, you need to consider your family, and decide who you wish to inherit these assets and how they should be divided. Maybe you have children who will need funds for education, or family members with special needs or costly medical problems, and you need to make sure that they will have the financial means to take care of these needs.
While thinking about your family, you also need to consider who you would like to make medical decisions for you, and who should handle your assets and investments if you become incapable for doing it yourself.
At this point, you need to enlist the help of an experienced attorney to draw up the correct legal paperwork to ensure that your decisions will be fully legally binding, and that all federal and state tax and other laws are followed, while also taking full advantage of them to avoid unnecessary tax implications for your family. A skilled and experienced attorney is essential, as the laws and regulations are extremely complicated and constantly changing. A mistake at this stage could lead to your family paying thousands of dollars in extra taxes unnecessarily, adding to their distress at this stressful time. Finally, you need to discuss the arrangements with your family, so that conflict is avoided and family members can become comfortable with your decisions.
You have always striven to take the best possible care of your family, spouse and children; you owe it to them to properly plan your estate, both to ensure that they are financially protected and to minimize their stress at an already difficult time. It is possibly one of the most important, things you will ever do for them. Contact Michigan Lawyers & Attorneys today, so that we can give you the peace of mind that comes from knowing your family will be taken care of and your decisions will be respected. Our experienced experts are ready to help you with all aspects of estate planning, simply call us today at 269.983.1000 and we will be delighted to assist you.
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