May 26, 2020
What is Estate Planning in Michigan | Brighton, Michigan Estate Planning and Elder Law Attorney
In today’s episode of Berry’s Bites. We talk about what goes into basic Estate Planning with Michigan Elder Law Attorney, Christopher J. Berry, Esq., CELA
Here is the auto-generated transcript:
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 longterm 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 an 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 a state 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 it 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. And 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 in your head, who’s going to make the decisions for you?
And 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 ever every trust is the same as every other one. And that’s why it’s important to work with a certified elder law attorney. But there’s some key legal documents that you need to have. And 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.
And so typically what that involves is setting up a trust and there’s different types of trusts. There’s basic revocable living trust, there’s legacy trust, there’s castle trust. And I should do a whole new video on just the differences in those trusts, but understand there’s different types of trusts out there. But think of a trust, kind of like a suitcase. While you’re alive and while you’re holding onto the suitcase, God forbid, something happens to you, you pass that suitcase on to your successor, trustee, who then distributes the assets wherever they’re supposed to go, thereby avoiding probate. And so that’s how typically we pass assets upon death is through a trust, not always, but a lot of 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.
So if any assets do end up in probate, the will knocks them into the trust so it follows the distribution terms of the trust. Then if the asset doesn’t pass through, or if we have the trust, we have the will, and then next, what happens if you get a knock in your head? Well, 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. And then we do what’s called a personal care plan. So if you’re to need longterm 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 services? Would you want us 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 longterm care decision making. And the next we need to do some type of deed. So if you own any real estate, we need to make sure that avoids probate. I’d tell you to check out that video on “What is a Ladybird 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. And the last thing we need to take a 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 makes 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 state plan versus relying on the government’s rule book of probate, which is a poor process, it’s time consuming. It takes over five months in Michigan and it’s costly three to 5% of any assets going through probate typically get eaten up in costs.
So if you want to avoid that, increase 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 the lady bird deed, and paying off or paying any final expenses. And if you want help with that and give our office a call (844) 885-4200. This has been another edition of Berry’s bites. Hopefully you enjoyed it. Thank you.