Is Your Estate Planning Up To Date?
| Don't Know | No | Yes | |
1. Have you prepared a will or a trust? Without proactive planning, you are relying on Michigan law and its courts to determine how your assets pass, to whom they pass, and when they pass. In addition to having potentially undesired results, this is perhaps the most costly and time consuming means of passing your assets to your loved ones. | |||
2. If you have done a will or trust, has it been reviewed in the last few years? Even assuming that there have been no family or financial changes since your plan was last reviewed, there have been major tax law changes in 1997 and in 2001. HIPAA compliance is now necessary for your family members to have access to your medical information. An out-of-date estate plan is perhaps worse than no estate plan at all. People view estate planning as an event rather than a process. Keeping your plan current is vital to achieving the goals you set out to accomplish. | |||
3. Are all of your heirs over the age of 18 and financially responsible? Under Michigan law, children inherit property at age 18 without restriction unless the inherited property is held in trust. Proper planning is crucial to prevent an heir from squandering his or her inheritance. | |||
4. Are you absolutely certain that your assets will not be subject to probate? Make a list of each asset you own and identify how each asset is going to avoid probate. Assets owned as "joint tenants with rights of survivorship," assets owned in the name of a trust, and assets that pass by beneficiary designation (such as IRAs, life insurance, etc.) will avoid probate. Everything else is subject to probate. (Also, note that assets owned jointly are typically subject to probate upon the death of the last joint tenant.) Probate can be costly and typically require twelve (12) to eighteen (18) months from the date of death to conclude. | |||
5. Do you have assets titled jointly with a child or children, or someone else? Holding assets jointly with someone other than a spouse is quite common, but has some potentially devastating consequences of which most people are unaware. Michigan law provides that a creditor of a joint tenant can take the entire asset to satisfy the creditor's claim. A creditor would include a divorcing spouse, judgment creditor, or business creditor. Additionally, problems can be created if joint tenants die in the wrong order, and there may be adverse tax consequences in having property transfer in this manner. | |||
6. Does your current plan provide your heirs with divorce protection and lawsuit protection? The most common means of providing for heirs is with outright distributions. By doing so, however, your inheritance becomes subject to the creditors of your heirs, and their spouses if there is a divorce. | |||
7. Is this your first marriage? Second or subsequent marriages present unique planning issues, particularly if either spouse has children from a prior marriage. Proper planning is critical to prevent undesired results, including the possibility of no assets passing to the children of the first spouse who dies. | |||
If you answered "No" to any of the above questions, or "Yes" to #5, you should call us to schedule a free consultation to discuss your estate plan.