What is probate?
Before the terms of your will can be carried out the court must accept the document. Probate is the name for the acceptance process.
What documents are needed for probate?
The court needs a copy of the will and a death certificate. Once the process is underway, an inventory of all assets and debts owned by the deceased is also required.
Can you avoid the process of probate?
One option is to create a revocable living trust and title your assets in the name of your trust; this is called funding your trust. It is now the record owner of your assets and there is no need for probate. However, any assets outside your trust at the time of death will need to be probated unless they have a beneficiary designation or owned with rights of survivorship with someone who survives you.
The bottom line
When it comes to estate planning, what works for you will depend on your own unique family and financial situation. By using one or more estate planning tools you can create peace of mind for yourself and your loved ones.
In our practice, Elder Law refers to planning for the health and economic well being of older adults or people with disabilities. This includes dealing with issues related to long term nursing care, guardianship, retirement, Social Security, Medicare/Medicaid and more. At the heart of this legal work is asset protection and advanced planning. The aging process is a unique journey for all of us, which makes discussing your options important. Too often we find well intended, but uninformed, decisions have been made which cause undue financial stress or hardship.
For over 150 years, Michigan law held that a ‘married woman’ had a dower interest in any real estate owned by her husband. The law dictated that a husband could not sell any of his real estate without the signature and consent of his spouse.
The justification of these dower rights dates back to when women could not legally own property. Dower rights provide that a man’s wife was automatically entitled to one-third ownership of any of her spouse’s property.
Earlier this year Michigan Governor Snyder signed legislation abolishing these rights. Married couples can now own property individually and sell it individually as well.Michigan was the only state that exclusively applied dower rights to women married to men.
The conflicts and inconsistencies for dower rights that were created by the mandated recognition of same sex marriage ultimately motivated the Michigan legislature to pass the package of bills to abolish dower rights.The elimination of dower rights will simplify the legal process for wives who do not appear on a deed or when a married man wishes to transfer property he sole owns.
It should be noted the elimination of dower rights is NOT retroactive. So any property owned, or couples married prior to April 7th when the bill was passed, will still be grandfathered in under the old Dower Rights.
Michigan recently became the 17th state to allow citizens to form – domestic asset protections trusts –that can shield assets from future creditors and lawsuits.
Candidates for this type of trust are those facing liability concerns, high-risk professionals and those with a large net worth.
It’s best to set up this kind of trust far in advance of any creditor problem. In fact Michigan rules state you must provide an affidavit of solvency before creating this trust. While is may seem like an additional hurdle it actually works for your benefit by confirming;
- You have authority to transfer property to the trust
- Transfers will not make you insolvent
- You do not intend to defraud any creditor
- You are not aware of any pending creditor action against you
The asset protections trust is also useful for a person planning to marry, but wanting to protect premarital wealth in the event of a divorce. In this instance all transfer of assets must be made at least 30 days prior to the marriage.
It’s important to note that when setting up an asset protection trust you become the beneficiary and must name someone else to be a trustee. Yet as the beneficiary you can:
- Direct trust investment decisions;
- Remove and replace trustees;
- Veto distributions from the trust;
- Receive discretionary distributions of income and/or principal;
- Receive the income from the trust;
- Direct how the assets are to be distributed on the transferor’s death
Asset protection trusts are irrevocable and there is two year waiting period that must be completed before assets in the trust are legally shielded from creditors.
While not for everyone the domestic asset protection trust becomes another important tool for tailoring estate planning to your individual needs.
Yes, your power of attorney may go stale.
Banks and other financial institutions are reluctant to accept a power of attorney over five years old. This reluctance has a valid basis, as powers of attorney can be used to commit fraud. An up-to-date document reassures those granting access to financial information the intentions of the person creating the document.
Refreshing your documents with us is easy. Our clients can call or stop by anytime to update us on life events that require changes to their documents. If our clients forget to call us, as a courtesy, we reach out to them by sending timely reminders for document review sessions. We enjoy these sessions with our clients and feel lucky to be a helpful part of their life.
You’re at the rental car center wondering should I purchase rental car insurance? What happens if I say no and have an accident?
Here’s what to do
Before you leave on vacation find out if you have rental car coverage through your personal auto insurance company. Many polices include this but it’s worth a call to your agent to confirm. Also check with your credit card company many offer this as a perk. If you are not covered for rental cars buy the insurance.
More tips for the road
Should you run out of gas or get a flat tire on your vacation and need roadside assistance you can save a lot of money by using your own service such as AAA. Finally take a moment to inspect your rental car at the time of pickup. Take pictures of any damage and discuss it with the agents in order to avoid false charges when you return the car.
Do you keep your documents in one spot and is everything up-to-date?
These documents need updating; passports, estate planning papers, insurance policies, financial records, property deeds, and passwords, to name a few. Choose a day to review your documents. Do you have a new address or beneficiary to add to a life insurance policy? Want to change the executor of your estate or name new guardians for your children?
When you’re satisfied everything is in order, tell someone you trust where you’ve put these important papers. All too often when clients (or their heirs) need to find these documents and can’t. This is aggravating and can even create legal headaches. Our office provides clients a Letter of Final Instruction at no charge to help with this important paper organization. Give us a call if you need one.
It’s not easy dealing with the many possessions of a loved one after they pass away. In some cases it can even create family conflict. But you can make things considerably easier for your family and beneficiaries by giving away your prized possessions before you die.
Only you know and understand the value and sentiment attached to your possessions. By giving them away during your lifetime you can be sure they are in good hands and that they will be appreciated by the new owners. In the process of giving, you will also have had the pleasure of making your loved ones feel special.
Consider too that some of your most valued possessions are not physical items, rather stories, songs or perhaps a favorite recipe. Be sure to pass these on as well as you give away your treasured belongings.
Giving consideration to how to pass on your belongings is just one part of completing an estate plan. For more information about estate plans and wills please call our office. We offer an estate planning worksheet to help you get started creating your own unique plan.
Many parents find talking about money with their children as difficult as talking about sex.It may be awkward, but talking to your children about their inheritance benefits everyone.
If kept in the dark, children may think their parents are “loaded” and expect a significant windfall upon their passing. They may worry about the cost of nursing home care and wonder if there are enough funds to cover this expense.
When talking about inheritance, parents can explain their success in accumulating assets, be that many or a few. Children can learn first hand financial lessons from their parent’s experience.
In addition to discussing amounts, it’s also important to talk about how the inheritance will be distributed. In many estate plans, distribution is delayed or paid out over time even when adult children are involved. When parents can explain their thought process, hurt feelings and family discord can be avoided ahead of time.
Finally, it’s important to remind children not to count on the money. Investments can rise and fall, unexpected health issues or family emergencies may dramatically affect a parent’s net worth. An important part of the estate planning process is to have a candid family discussion about money and inheritance. This helps everyone prepare for the future.
Anyone involved in a real estate transactions should be aware of all applicable flood zones. Recent changes in the National Flood Insurance Program and new updated flood maps will have an impact land values.
The recent updates, on which flood insurance is based, have moved many properties to new hazard levels. Some properties for the first time are now considered to be in a floodplain. This will require owners to purchase flood insurance. Because of the new rate structures for flood insurance there has been a significant increase in flood insurance premiums for homeowners.
Sellers need to be aware of the flood zone in which their property is located and disclose the information to purchasers. Failing to advise a purchaser could be considered fraudulent in some circumstances. For more information check out the Flood Insurance Rate Maps at www.msc.fema.gov. You can see actual flood maps are available at www.floodmaps.fema.gov