June 10, 2021
What is Estate Planning in Michigan | Brighton, Michigan Estate Planning and Elder Law Attorney
MichiganEstatePlanning.com | 844-885-4200. Brighton, MI Elder law attorney Chris Berry explains what goes into basic estate planning and the told that are used. Estate Planning in Michigan involves creating your own rulebook versus relying on the government’s rule book. This involves creating a living trust (or legacy trust or Castle Trust™) to avoid probate. Then a pour-over will, then a financial and medical power of attorney, then a personal care plan, deed and pre-paid final expenses.
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.
Hi. This is Chris Berry, and today we’re going to talk about estate planning in Michigan. So as a certified elder law attorney and estate planning attorney, we help families navigate the long-term care journey, but also we help them with basic estate planning as well.
So what goes into basic estate planning or what goes into making sure I have all my affairs in order? Well, typically it’s two things, and actually three things, if you throw in elder law. First, it’s planning for what happens if you pass away. That part’s actually kind of easy. It’s avoiding probate and understanding how estate administration works. The second piece is if you get a knock in your head, who’s going to make financial and legal decisions? We call that incapacity planning. And then third, and this is where elder law comes into play, is what happens if you don’t pass away, you continue to age, and face all the issues that go along with aging?
And so as one of the second youngest certified elder law attorneys in the nation, when I passed that exam, and one of the first certified elder law attorneys in Livingston County, I’m one of maybe 18 across the whole state of Michigan, as it relates to becoming a certified elder law attorney and really being the gold standard when it comes to estate planning and elder law. I could get into a whole different topic on why that’s important to really work with experts in the area, but today we’re going to talk just about basic estate planning. What is the bare necessity?
And really, I think the bare necessity is understanding that we’re all going to pass away at some point and there’s a pretty good chance that there’s going to get a point where we can’t make our own financial and medical decisions. And so we need to plan for what happens when you pass away, and if you get a knock on your head, who’s going to make the decisions for you?
What we have to do is create a rule book and we have to create your rule book versus relying on the government’s rule book. Because understand, the government has a set of rules for you. And it’s your choice of whether you want to follow the government’s rule book, or do you want to create your own rule book? So your rule book consists of certain legal documents, and understand, these documents are not all created equal. Not every power of attorney, not every trust is the same as every other one. And that’s why it’s important to work with a certified elder law attorney.
Key Legal Documents
But there’s some key legal documents that you need to have. First we need to figure out how are you going to avoid probate? How are you going to make it as easy as possible on the next generation, if something were to happen to you? Typically what that involves is setting up a trust, and there’s different types of trusts. There’s basic revocable living trusts, there’s legacy trusts, there’s castle trusts. And I should do a whole new video on just the differences in those, but understand, there’s different types of trusts out there. But think of a trust like a suitcase. While you’re alive and well, you’re holding onto the suitcase. God forbid, something happens to you, you pass that suitcase on to your successor or trustee, who then distributes the assets wherever they’re supposed to go, thereby avoiding probate.
That’s how typically we pass assets upon death, is through a trust. Not always, but a lot of times we do use a trust. So typically you have a trust. Along with that trust, you also have what’s called a pour-over will. If any assets do end up in probate, the will knocks them into the trust. So it follows the distribution in terms of the trust.
Then if a asset doesn’t pass through… We have the trust, we have the will, and then next, what happens if you get a knock in your head? Now we need to appoint someone to make financial and medical decisions. And that would be through a financial power of attorney, as well as a medical power of attorney. A lot of times it might be spouse first and then the kids in some order.
Then we do what’s called a personal care plan. So if you were to need long-term care, we put together some guidance on what that would look like. Would you want to be kept at home as long as possible? Would you want to attend religious service? Would you want to visit family, certain foods you like or don’t like. So if your medical power of attorney gives you end-of-life decision-making, your personal care plan talks about long-term care decision-making.
Then next we need to do some type of deed. So if you own any real estate, we need to make sure that that avoids probate. I’d tell you to check out that video on what is a lady bird deed. It’s a type of deed we use quite often to avoid probate and get the real estate into a trust or get the real estate to beneficiaries.
Prepaying Final Expenses
The last thing we need to take look at, prepaying any final expenses. We don’t want to leave the kids holding the bag to pay for a funeral or cremation or anything like that.
So, in summary, how do you create your own rule book versus relying on the government’s rule book? Well, you probably should have a trust, a pour over will, a financial power of attorney, medical power of attorney, personal care plan, deed, and then final expenses. Having that in place, that’ll put your affairs in order. So if something were to happen to you, assuming that it’s funded properly, and there’s some other things that go into it, but those are the basics of creating your own rule book, creating your estate plan versus relying on the government’s rule book of probate, which is a core process. It’s time consuming. It takes over five months in Michigan and it’s costly. 3% to 5% of any assets going through probate typically get eaten up in costs.
So if you want to avoid that, and create your own rule book, then look at having that trust, the will, the financial power of attorney, the medical power of attorney, the personal care plan, the deed, sometimes a lady bird deed, and paying any final expenses. And if you want help with that, give our office a call. 844-885-4200. This has been another edition of Berry’s Bites. Hopefully you enjoyed it. Thank you.