Estate planning with Wills and Trusts:

A Will is a written document that specifies how a person’s property will be distributed upon their death, and how their debts are to be paid. A will appoints a personal representative and a guardian for your children. There is no limit on how many instructions you put into your will to distribute your property. However, a will cannot have any instructions or powers for lifetime management of property.

A will also avoids the Michigan intestate laws. Michigan intestate laws are set up to transfer property to the decedent’s heirs according the degree of relationship to the decedent. Therefore, it is entirely possible that some of your assets could go to someone in your family that you do not want your assets to go to. With a will, you can choose who will receive what. You will not have that option if you die intestate (without a will or trust). Also, if you have children, the probate court will appoint a guardian for your children. Without a will, your children could be left with a family member that you may not like.

A will must be probated upon the decedent’s death, unless their estate is small. Probate is a judicial process where a court will transfer a decedent’s property to his or her heirs. Probate will appoint a personal representative, usually the person named in the will, who is authorized by the court to transfer property in accordance with the decedent’s will, or if there is no will, in accordance with Michigan intestate laws.

Probate can be costly and it is the decedent’s estate that pays these costs. It is $150.00 just to file the case. There will be attorney fees involved, and the fees can vary depending on the issues involved. Most cases, however, proceed smoothly and the attorney fees average around $2500.00. There also is an administrative fee assessed by the court and it is a function of the value of property. These fees are set by state law. For example, the administrative fee on a $100,000 estate will be $362.50. Most probate cases can be settled for $3000-$5000.

A Trust is a contract between a grantor (person who creates the trust) and the trustee (person who acts on the grantors behalf) to manage the trust for the benefit of the beneficiaries. There is no limit on the amount of instructions in a trust and a trust provides for lifetime management of property. The grantor can be the trustee of the trust and the grantor will appoint a successor trustee to manage the trust after the grantor-trustee dies.

There are many kinds of trusts created for many kinds of purposes. With a trust, you can manage property for your children until they reach a certain age, after you die. You can create a trust to provide for your children’s education. You can create a trust to provide for your medical care if you become incapacitated. Finally, you can create a trust to provide for yourself in your retirement years.

A trust will avoid probate. In order to avoid probate, the trust must be funded. This means you transfer assets (like a house) from your name into the name of the trust. The trustee will manage the assets (remember, you can be the trustee in a revocable trust) for the grantor and distribute the assets after the grantor’s death. Since the trust owns the property, the trustee does not need court approval to distribute the assets or exert control over them in order to manage the assets.

You may be asking, “Why should I avoid probate?” There are many reasons to avoid probate:

•Save Money. The cost of probate avoidance is less than the cost of probating a will. Would you prefer to spend a little more today, or would you rather have your estate pay for it in probate (for example, your heirs get less after you die because of the probate costs).

•Save Time. Probate can take up to five months or longer to complete. Planning to avoid probate can significantly reduce the time to transfer assets to your heirs.

•Privacy. Probate proceedings are public. Any person can review the record, including your will, distributions, heirs, and property. Keeping an estate out of probate will keep your matters private.

For Convenience. Probate is inconvenient and time consuming. There are accounting’s to report, hearings to attend, and all sorts of other details the personal representative must attend to. Avoiding probate may reduce this inconvenience.

Call us today for a your free consultation!

We will be happy to look at your situation and suggest which of the options are best for you.  Every situation is different and we would take the time to get to know you and help you understand your options.    You do not have to be elderly or ill to set up your will or trust.  It is just a good plan to have if you have any asset’s you would like to protect.