June 17, 2017
The 7 Essential Pieces of Any Comprehensive Estate Plan
What Goes Into an Estate Plan
There are seven key ingredients in any comprehensive estate plan. These pieces are the tools to help clients achieve their goals. There are different options for each of the tools, and we’ll explain each tool in it’s own subsequent blog post, but this will be the ingredient to putting together a comprehensive estate plan.
With a comprehensive estate plan, prepared by a Michigan estate planning lawyer, you can accomplish things like:
- Avoid probate
- Control distributions
- Protect your beneficiaries
- Protect against long-term care costs
- Avoid unnecessary taxes
The Comprehensive Michigan Estate Plan
Estate Planning can be confusing and complex. We try to keep things as clean, clear, and simple as possible. The key ingredients to any estate plan include:
1. Trust
There are two types of trusts that are typically used, a basic revocable living trust and a Castle Asset Protection Trust. A revocable living trust or revocable trust is great for avoiding probate and controlling the distribution upon death. That is….if the trust is set up correctly and funded. Most trusts are not properly funded.
There is another type of trust and that is a Castle Trust(tm), which is a modern form of the asset protection trust, which can avoid probate, long-term care costs and law suits.
2. Will
When you have a trust based estate plan, it is important to still have a last will and testament. When you have a trust based estate plan, you would do what’s called a “pour-over will.” The purpose of the pour-over will is that if any assets end up in probate, they get knocked over into the trust and they follow the terms of the trust.
3. Financial Power of Attorney
The financial power of attorney is one of the most important documents in a comprehensive estate plan. The financial power of attorney allows an individual to pay the bills of a loved one, instead of having to go to court to get a guardianship or conservatorship. By having a well drafted financial power of attorney you can handle the financial affairs of a loved one.
4. Medical Power of Attorney
A medical power of attorney is a document that allows you to make medical decisions for another person. In Michigan, a medical power of attorney is called a Patient Advocate Designation. Included in the medical power of attorney is the ability to be removed from life support.
5. Personal Care Plan
It’s one thing to have a financial power of attorney and another to have a medical power of attorney, but it’s important to give instructions on how best to care for you if you were to need help or care in the future. For example, if you needed care, would you want to receive that care at home or in a nursing home. In your personal care plan, you can include instructions on how best to receive the care you need.
6. Deed
If you own real estate, it is very important to properly plan for your home to ensure it avoids probate and also avoids estate recovery if you need long-term care in the future. Many people forget to or mishandle the deed. Whether you are doing a Ladybird deed or deeding directly to an asset protection trust, like a Castle Trust, is an important part of any estate plan.
7. Funding
Having a trust is great, but you need to ensure you trust is funded properly. Many of the trust that we sit down and review are not funded properly. You may have spent $3,000 on a trust, now your family is spending $5,000 on probate just because your trust was not funded properly.
The Next Step
Having these seven ingredients in your estate plan, will help ensure that your families estate planning goals are met. You should work with a Certified Elder Law Attorney (CELA) to help you utilize these tools for your estate plan.
Now that you know the key ingredients of a comprehensive estate plan in Michigan, it’s time to take the next step and learn how you can put these tools to work for you and your family. At The Elder Care Firm, we offer weekly workshops that help educate you and your family on how best to utilize the tools to achieve your families goals.