Estate planning is one of the most important things everyone needs to ensure they get done well ahead of when it might become necessary. Life is unpredictable, so that means it is something you should do as soon as possible, especially once you have children.
Without an estate plan in place at the point of death or becoming incapacitated, a person would have no say about how their affairs are run. This includes everything from the end of life care to burial arrangements and the disposition of property. That last is particularly important, especially for people who have dependents outside of their immediate family whom they would like to cater to. Even if it’s just your immediate family though, having an estate plan can make things seamless and minimize the chances of a conflict.
So, how do you prepare an estate plan? It is quite straightforward actually, as long as you have the right professional guidance to make sure all the legal aspects are in order. Here is a handy checklist for you to follow:
1.Clarify the Purpose
As mentioned earlier, estate plans can cover a wide range of things, so it is important that at the beginning of the process, you outline exactly what you want to achieve with the plan. Do you want it to be solely in relation to the disposition of your property or do you want it to include specific burial instructions, for instance?
With property disposition, you can also specifically design your estate plan to avoid as much as possible, the need to deal with probate court issues, as well as minimizing the estate taxes that would need to be paid by your beneficiaries, thus ensuring that they have as much as possible to make a life with.
2. Take Inventory
Once you are clear as to the purpose for which you want to make an estate plan, the next step would be to identify exactly what is in your estate. This would include all your property (land, buildings, cars, devices, account balances, cash, etc.) but it would also include your debts and financial obligations. Failing to account for your financial obligations is the surest way to make sure that your beneficiaries get hit with major unexpected expenses which may wipe out everything they have inherited.
3. Insure Everything
Insurance is for when the unexpected happens, but it can also be a useful tool in ensuring that you minimize your debts and ensure your beneficiaries get as much as possible from your estate. There are varied types of insurance which you could get, including auto, homeowners, disability, and life insurance, among others. Depending on the specific circumstances, these policies could be a major source of income for your beneficiaries.
4. Write a Will
A will is a legal document that spells out the wishes of any person regarding what should be done in the event of their death or incapacitation. Failing to write a will means that your estate would be subject to the probate laws where you live, and that could result in drastically different outcomes from what a person would have wanted. Hence, making a will as early as possible is crucial.
In the will, be clear as to the identity of each piece of property and the person who should get it. The clarity is important because vagueness could mean that the person ends up getting nothing if such a property cannot be definitively located, depending on the laws where you live. You must also designate someone or a group of people as your personal representatives. They would be responsible for keeping custody of and managing your estate until it is distributed, so they must be people whose integrity and competence you trust implicitly.
5. Financial Power of Attorney
It is possible to be alive but be unable physically or mentally to make decisions regarding one’s estate. In such a situation, the vacuum of authority might lead to loss of value in the estate where crucial decisions are not taken in time. That is where a power of attorney comes in. It is a document that empowers a specific person to make decisions in respect of a part or the entirety of your estate, while you are unable to do so yourself. Again, you will need to be careful regarding the person whom you select to exercise this power. However, with competent legal advice, you can ensure that it only triggers when you are truly incapacitated and that there are sufficient safeguards to ensure that your properties are properly managed.
6. Medical Power of Attorney
Just as a financial power of attorney is important for proper decisions to be made regarding your property while you are unable to do so, medical power of attorney empowers someone you trust to make medical decisions when you can’t make them yourself. This could include giving approval for specific types of medical procedures and could extend to making a decision regarding when to end life support. It is often a good idea to combine a medical power of attorney with a living will, to specify the end of life instructions to the person you designate and ensure that they are complied with.
7. Digital Profiles
In the past, the entirety of a person’s valuable possessions would have likely been physical, such as real estate, cars, or the like. Nowadays, the most valuable possessions many people own are in digital forms such as online investment accounts, cryptocurrency holdings, and such. To ensure that your dependents are able to access all these possessions, you should consider compiling all your digital profiles (logins, passwords, and any other authentication details) and keeping them safe. If you do not, it’s very possible that one’s personal representatives and beneficiaries may never find out about those holdings, thus reducing their benefits under your estate plan.
8. Safekeeping
All the documents which have been mentioned have to be kept securely. This is to ensure that they are not tampered with in any way without your consent. At the same time, they have to be kept in a way that they would come to light in the event of death or incapacitation, to be used for estate management and disposition. There is a wide range of options such as keeping them in a fireproof box, safety deposit box, filing with the court, or in a safe. Be sure to get legal advice regarding what’s best considering your particular circumstances and the laws where you live.
9. Review
The accuracy of estate planning documents is very crucial because unlike other documents, one may not be able to step in to make a clarification if there is any confusion regarding their contents. Hence, be sure to review your will and powers of attorney regularly to make whatever changes are necessary, such as updating the names of your beneficiaries or the identifying details of the properties you want to give them.
10. Get Professional Help
In other areas of life, legal mistakes can be corrected and fixed in one way or another by competent lawyers. When it comes to an estate plan, however, the effects of mistakes in your will, powers of attorney or other documents may have permanent effect simply because courts would generally default to what is contained in them rather than what anyone argues you might have wanted. Hence, be sure to secure the services of competent estate planning lawyers to guide you through the entire process.
About the Author: Roxane Kaye, has been practicing law since 2002. She is admitted to practice law in Michigan state courts and before the Federal Bankruptcy Court of Eastern Michigan, Southern Division, as well as the Federal District Court of the Eastern District of Michigan. Roxane covers cities such as Burton, MI, Flint, MI, Fenton, MI, Beecher, MI, Lapeer, MI, Waterford, MI, Auburn Hills, MI, Pontiac, MI, Howell, MI, Owosso, MI, Wixom, MI, Rochester, MI, Rochester Hills, MI, Novi, MI, and South Lyon, MI.
You may contact Roxane below:
Roxane M. Kaye
Kaye Law Office, PLLC
8161 S Saginaw St
Grand Blanc, MI 48439
