May 22, 2021

Estate Planning Mistake: Forgetting the Ancillary Documents of a Comprehensive Estate Plan

Estate Planning is not just about a Will and a Trust.
There are ancillary documents that people tend to forget.

Estate Attorney and Advisor Chris Berry of Castle Wealth Group answers questions on retirement and estate planning every Wednesday at 1pm. Register via this link or give our office a call at 844-885-4200.

Castle Wealth Group and Christopher Berry help families with estate planning, elder law, retirement planning, and tax planning from their offices in Brighton, Ann Arbor, Livonia, Bloomfield Hills, and Novi.

Castle Wealth Group helps families with their legal, financial, and tax planning for their retirement and legacy.

With the use of legal structures like revocable living trusts, Castle Trusts (asset protection trusts), Chris Berry and Castle Wealth Group can help your family plan, protect, and preserve what is important through their Retirement and Legacy Blueprint Process.

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Episode Transcript

Comprehensive Estate Plan

Hey, this is Chris Berry talking about another estate planning mistake that we see. And that mistake is relying just on a will or a trust, not taking into account the other ancillary documents that are part of a comprehensive estate plan. If you like this information, please make sure to subscribe to our YouTube channel.

Christopher Berry is a leading estate attorney and advisor in the area of retirement and legacy planning. He has been featured in publications such as Ford’s, Kiplinger’s, Crain’s Detroit, and more. He’s the host of the weekly radio show and podcast, The Chris Berry Show. He’s a national thought leader as it relates to retirement and legacy planning and has authored of the Amazon best-selling book, The Caregiver’s Legal Guide.

So when people think about estate planning, a lot of times they just think about a will or trust. What happens when I pass away? Where’s my stuff go? And that’s where we use the tools of a will and a lot of times more often than not, we use a trust. And there’s different types of trusts we use, sometimes a living trust, sometimes a castle trust, which is an asset protection trust. But understand when we’re talking about estate planning, it’s more than just a will or a trust. There’s other things we need to take into account. For example, what happens if you get a knock in your head, you’re in a coma, you’re in a car accident. Someone needs to make medical decisions for you, or you need long-term care. And that’s where some of these ancillary documents come into play. So in addition to a trust and a will, lot of times we’ll have a financial power of attorney, which is a document that appoints someone to make financial decisions if you’re unable to.

Lot of times it might be a spouse first, then maybe the kids if they’re adults. Who’s going to pay your bills? Who’s going to write checks? That’s that financial power of attorney. Fourth key document is what’s called a medical power of attorney. This is a document that appoints someone to make medical decisions if you’re unable to. So you’re in a coma, your spouse has passed away, who’s going to make those medical decisions? In Michigan, we call this a patient advocate designation. Again, a document to appoint someone to make medical decisions. It goes over and above just a trust or a will, which talks about what happens when you pass away. Like the financial power of attorney, the medical power of attorney is effective while you’re alive. Upon death, it becomes uneffective or it doesn’t have any power. But that medical power of attorney appoints someone to make medical decisions. Included in that would be your decisions with regards to life support. Okay?

So you might’ve heard of Terri Schiavo. She was a woman down in Florida. She was in a vegetative state. Her husband wanted to remove her from life support. Her family wanted her to remain on life support. It became a big court battle that lasted over eight years. All of that could have been avoided had Terri Schiavo had that medical power of attorney document in place. Okay? So it’s more than just the trust and the will. You have to have that financial power of attorney. You have to have that medical power of attorney. The next thing we think is important is what’s called a personal care plan, which gives instructions to your financial medical power of attorney on how best to care for you if you were to need long-term care. So if the medical power of attorney gives end of life decision-making, the personal care plan talks about long-term care decision-making.

Summary

A Comprehensive Estate Plan is consist of
1. Trust
2. Will
3. Financial Power of Attorney – a document appointing someone to make financial decisions.
4. Medical Power of Attorney – a document appointing someone to make medical decisions. In Michigan, this is also called a Patient Advocate Designation.
5. Personal Care Plan – gives instructions to your financial and medical power of attorney on how best to care for you if you need long-term care.
6. Deed – For your real estate.
7. Final Expense Plan – a plan to cover all your final expenses.

So we have the trust, the will, the financial power of attorney, the medical power of attorney, the personal care plan. Six, if we have any type of real estate, we need to make sure we do a deed. Either deeding it directly to the asset protection trust or a lot of times we’ll do what’s called a lady bird deed, which is a type of deed to say that it’s in your name while alive. And then upon death, it flows into the trust or flows to the beneficiaries taking care of that real estate. And if you have more than one piece of real estate, we need to do multiple deeds. And then the last thing I’ll throw out there. So this would be number seven, would be a final expense plan. So we don’t want to leave the kids holding the bag to pay for any funeral or cremation or any final expenses.

A lot of times our families will set money aside in what’s called a final expense tool or trust, so that it’ll pay out within 24 to 48 hours to whoever the personal representative or trustee is to handle any final expenses. Much better way than naming one of the kids join on any accounts. Covers all those final expenses. So understand with estate planning, it’s more than just a trust. It’s a trust, a will, a financial power of attorney, medical power of attorney, personal care plan, a deed, and a final expense plan. All of that is wrapped together in a comprehensive estate plan. So this has been Chris Berry with Castle Wealth Group. Thank you so much.

Castle Wealth Group has clients across the nation and helps families plan, protect, and preserve what is important by creating a retirement and legacy blueprint.