Estate Planning in a World of Social Distancing

The truth is that we’re living in a world of uncertainty that impacts every area of our life. Unfortunately, the fears that arise in the face of a viral pandemic do not erase the need for a careful estate planning. As restrictions on social mobility increase, it’s still possible to get answers to your planning questions in a safe way.

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More than a year ago, our law firm adopted digital technology that allows every member of our team to assist you, as needed, by video. Our Zoom video conference platform allows us to conduct virtual face-to-face meetings with you or other members of your family with ease no matter where they are located.

To participate by video, you don’t need much more than a smartphone, tablet, laptop or PC equipped with a camera and microphone. In real time, we can review any estate planning documents already on file in our system or to review drafts of new planning documents.

With forced time at home, it’s a good time to review your estate planning. In our current circumstances, we recommend, at a minimum, that you have a well-crafted General Durable Power of Attorney. Because of the pressure on the medical system, it’s probably best that your Power of Attorney be one that is effective immediately rather than a springing power the requires confirmation of your incapacity by a physician.

In addition, I recommend that you review your Durable Power of Attorney for Health Care, Advanced Directive or Living Will, if you have one. Under Michigan law, this important document allows you to appoint a Patient Advocate to make your medical treatment decisions if you are unable to make such decisions for yourself.

If you already have a revocable living trust in place you may want to consider adding an additional trustee to your plan right now, rather than waiting until receipt of incapacity or death to allow someone else you trust to make financial or medical decisions.

If you need someone else to aide with banking or other financial decisions, I urge you to resist the temptation to add other people as joint owners on your bank accounts or investments. With proper legal documents in place, taking the short cut of joint tenancy risks a serious loss of control over what you own.

Although the Michigan Uniform Electronic Transactions Act (UETA) law allows use of electronic signatures for business transactions, it excludes use of electronic signatures for wills, codicils or testamentary trusts. Unless additional legal relief is provided, most estate planning documents still must be signed and witnessed the old-fashioned way with pen on paper. We’ve created several options to allow you to get your Power of Attorney, health care directive or other necessary documents updated quickly and cost-effectively.

If you have questions or concerns about your current planning needs, please give us a call at (231) 799-4994. Or, drop us a note using the form below. We’re still here to help.

5 Reasons Why You Should Consider a Living Trust

Creating an estate plan to protect yourself and your family is one of the most important life decisions you can make. People often ask about the differences between a Will and a living trust. A living trust offers many advantages over traditional Will based planning.  Here are 5 reasons why you should consider a living trust:

1. Preserve Privacy and Avoid Probate.

A fully funded living trust allows you to manage or transfer your assets upon sickness or death in complete privacy. 

In the event of illness, a living trust can provide for the management of your assets and give instructions about your own care (or the care of those who depend upon you) without the involvement of the probate court. Unless your estate plan includes a living trust or a general durable power of attorney, your family may face a trip to the courthouse to obtain letters of guardianship or appointment of a conservator before anyone can make decisions about you or your assets.  

Unlike a Will, a living trust does not have to be registered with the probate court at the time of your death; nor, does a living trust depend upon issuance of letters of authority from the court to allow your fiduciary to carry out your wishes. When you have a living trust, the value of your assets and the identity of your beneficiaries do not become a part of the public record.  

2. Avoid the Perils of Joint Ownership.

It’s a common temptation to try and avoid probate by placing your assets in joint ownership with a child or other person on the assumption that if you get sick or die, your joint owner will be able to “take care of everything” when something happens to you.  

In most cases, joint ownership arrangements are a mistake. The moment you place someone else’s name on your assets you are giving them access and control over what you own. The moment you put someone else’s name on your accounts you risk making their problems your problems. Through no fault of your own, your joint owner’s creditors may be able to garnish your savings.  

Joint ownership arrangements cause a loss of control.  Adding someone else’s name to an asset is easy but getting them off is not. When you add another person on your asset title you may be giving that person a veto power on your personal decision-making. Many forms of joint ownership prevent you from closing accounts or selling assets without your joint owner’s consent.  

In the event of your death, jointly held assets automatically become the property of the surviving joint owner. When that happens, there is no legal guarantee that your surviving joint owner will share your assets the way you intend. 

In most cases, a living trust is the best legal planning tool for keeping control over your own assets at sickness or death.  

3. Protection for Minor Children. 

A living trust is a great way to provide benefits or protection for minor children. If you die before your children reach legal age, a living trust can be used to provide for your child’s education or other expenses until they are responsible enough to manage their own resources.  

It is a planning mistake to name a minor child as a direct beneficiary of your life insurance or other retirement assets. Without a living trust, upon your death, your insurance underwriter or retirement plan custodian will not make any distributions to a minor without a court order appointing someone to manage those resources until your minor child reaches the age of 18. If you are divorced, more likely than not, that person will be your former spouse. 

4. Protection for Adult Beneficiaries.

If your adult beneficiary has a problem with alcohol, drug addiction, or has other special needs, you may want to consider a living trust as a method for providing safeguards to inappropriate spending. A trustee that you appoint can hold and manage resources for your beneficiary consistent with your instructions without fear that what you leave will be wasted or cause your beneficiary to be disqualified for public benefits. 

5. Consistent Results.

A living trust is a great way to assure consistent and fair results at the time of your death. Transfer on death designations or direct beneficiary designations may avoid probate when you die but don’t provide instructions about what to do if your child or beneficiary fails to survive you or becomes disabled.  

When you name a living trust as the owner or beneficiary of your assets, your desired outcome is highly predictable because the instructions for all assets are contained in one private legal document that contains your distribution wishes. 

If you’d like to learn more about your estate planning options, click on the link below or call (231) 799-4993 to schedule a complimentary Get Acquainted Call.