Top 10 estate planning tips

GET A TRUST. A fully funded revocable grantor trust (commonly called a "Living Trust") avoids probate, protects children and those with special needs, and can help reduce or eliminate federal estate taxes. For many people, a trust is the centerpiece of their estate plan; for others, a Will is all you need. GET A WILL. A Will allows you to direct the persons and or charities that will receive your assets upon your death. If you do not have a Will, the State of Michigan will direct (by the intestacy laws) how your assets will be distributed. Even if you have a trust, you need to have a "pourover" Will just in case your trust is not fully funded at your death. A pourover Will transfers your probate assets to your trust so that there is only one document that controls the disposition of your assets at your death. GET A DURABLE POWER OF ATTORNEY FOR FINANCES. Having a Durable Power of Attorney for finances gives your designated Agent authority to handle your finances. This is very helpful if you become disabled or incompetent. Without a durable power of attorney, a Court-appointed Conservator may be needed to handle your financial affairs. GET A DURABLE POWER OF ATTORNEY FOR HEALTH CARE/DESIGNATE A PATIENT ADVOCATE. When you are unable to communicate your wishes regarding your own medical care, after 2 doctors certify this fact in writing, your patient advocate can act for you to make decisions regarding your medical and end of life care, hospice, dying at home, and pain relief. Designating your patient advocate may save your loved ones a trip to probate court to be appointed your guardian. PLAN FOR A POSSIBLE LAY-OFF OR LOSS OF A JOB. Create an emergency fund that will get you through 2-3 months of your financial needs in the event your family's major wage earner loses his or her job. OBTAIN DISABILITY INSURANCE. An accident or illness that leaves you unable to work can cause great financial difficulties, even if it is only a short-term disability. Long-term disabilities can be even more financially devastating. If your employer does not provide short- and long-term disability, investing in these products may provide needed income for your family when you are unable to do so. PLAN FOR YOUR MINOR AND DISABLED CHILDREN. If parents of minor children die without a will or trust, the probate court will set up a conservatorship to protect assets inherited by the children. At 18, the children will receive their inheritance outright. Most people prefer to set up a trust that will set aside money for their children's health, education and support, deferring ultimate distribution of funds until age 25, 30, 35, or later. If a child has special needs, a Special Needs Trust should be considered as part of the parents' estate plan; this can be part of a revocable trust or a standalone Special Needs Trust. Part of planning for your children often includes determining how much of your children's education you want to provide. Then, consult your financial advisor to assist you in making a plan to save money for college or other training/support for your child. Another major component of planning for minor children is to designate a guardian, the person who will care for them until they reach 18. This is a difficult issue for some families but a very important one that needs advance planning. If your children are over 18, don't forget that they should do planning of their own. Durable Powers of Attorney can often avoid the need for your child to have a guardian or conservator appointed. Consider that even college kids should have their own Durable Powers of Attorney for Finances and Health Care. PLAN FOR YOUR RETIREMENT. Work closely with your financial planner to adequately plan for your retirement. Check out a life expectancy tool at www.livingto100.com to see how long you can expect to live. If you have a long life expectancy, you may wish to save more money now, or work a few years longer to obtain higher Social Security benefits. Ask your attorney for a referral to a competent and trustworthy financial planner. PLAN FOR MEDICAID. Before going into a nursing home, and before applying for Medicaid, consult an attorney familiar with Medicaid's eligibility, divestment, and estate recovery rules. Getting proper advice at this time may save your family thousands of dollars. PLAN YOUR FUNERAL. Pre-planning, and possibly pre-paying, your funeral will take a burden off the shoulders of your loved ones. Decisions you make now will ease their load of decision-making during a difficult time. Consult your local funeral director for more details. ----- If you have any questions about these tips or need assistance with your estate plan, contact Marlaine Teahan at 517.377.0869 or by email at mteahan@fraserlawfirm.com. Published: Mon, Nov 30, 2015