Five Purposes of Michigan Estate Planning You Need to Know Right Now

Estate planning is much more than writing a will. Unfortunately, many individuals overlook the other purposes of estate planning in Michigan. They do not understand that these purposes protect them, their children, and their loved ones from a variety of government interference into sensitive subjects. Below please find the five purposes of estate planning and why you should carefully consider developing a comprehensive estate plan.

Estate Planning Purpose Number 1:  Disbursing Your Assets After Death

This purpose is the most common reason why people write a will. With a will, you decide who inherits your property and what property each person or party receives. Without a will, Michigan’s intestate laws decide for you. Intestacy succession (who receives your property and in what priority) does not recognize friends or charitable organizations. In most cases, nieces, nephews, brothers, sisters, and other close family members do not receive anything from your estate unless you have no surviving spouse, children, or parents.

Estate Planning Purpose Number 2: Appoint Guardians for Minor Children

If you and your child’s other parent were to die, who would raise your child? Do you want to make that choice, or do you want a judge who does not know your family or your child deciding that for you? In your will, you name a guardian for your child if you should die before your child reaches 18 years of age.

Also, you can include a testamentary trust that protects your child’s inheritance. A trustee you choose manages your child’s inheritance until he or she reaches an age you choose. Without a trust, your child inherits everything at 18 years of age, even if the child is in high school at that time.

Estate Planning Purpose Number 3: Incapacitation Planning

Estate planning is not only about death. If you become incapacitated, who will handle your finances, make medical decisions for you, and decide things about your personal care? Again, do you want a judge deciding who can make these decisions? Through your estate plan, you can execute various powers of attorneys, medical directives, living wills, HIPAA authorizations, and other estate planning documents that ensure your wishes are carried out. You also choose the person you trust to make decisions for you.

Additionally, Medicaid planning or long-term care planning is another important aspect of estate planning. With a carefully designed strategy, you can help ensure that your assets remain protected while you qualify for Medicaid, if necessary.

Estate Planning Purpose Number 4: Asset Protection

Asset protection is another important purpose of estate planning in Michigan. Strategies using trusts and other estate planning documents can protect assets from your creditors and the creditors of your heirs. You can also use a variety of trust agreements to protect your family business, family home, vacation home, and other assets that you intend to remain in the family. Some trusts and other strategies can protect assets from ex-spouses, in-laws, and bankruptcy filings.

Estate Planning Purpose Number 5:  Reduce Tax Liability

Estate planning allows you to avoid or reduce tax liabilities, including estate taxes, income taxes, and gift taxes. For high-net-worth individuals, estate planning is essential to protect the estate and heirs from unnecessary tax liabilities that can take a significant portion of the estate and assets.

Contact a Michigan Estate Planning Attorney for More Information

Estate planning does not need to be a difficult or expensive process with the right Michigan estate planning lawyer. The attorneys of The Elder Care Firm of Christopher J. Berry are committed to providing estate planning and probate services to individuals and families throughout Michigan.

Call 888-390-4360 or use the contact form on our website to schedule an appointment with an estate planning attorney near you.

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