Who Needs an Estate Plan?

Everyone needs an estate plan, regardless of the size of his or her estate. A person's estate consists of all property, both real and personal, that is accumulated during the person's lifetime. The estate plan allows a person to control the use of and distribution of his or her assets in the event of death or incapacity. If provisions are not made prior to death or incapacity, the state has a statutory provision for the control of and distribution assets that may or may not be in accordance with the wishes of the decedent.

Additionally, those with minor children need to have an estate plan in order to determine who will raise their children in the event that both parents die. If provisions are not made prior to death, then the courts will determine who will gain custody of any minor children.

Increasingly, people are coming to view pets as a part of the family, and under Michigan law have the ability to establish a pet trust to determine the custody and care of pets after their death. Without this trust, the pet is at the mercy of the family in determining its fate, which may include being placed in a shelter or even euthanized.

A good estate plan consists of a will, a durable power of attorney, a patient advocate designation, and in many cases, a revocable living trust, and are used for different purposes pertaining to the estate plan. Following is a brief outline of the purpose of each document.

Will: A will is a legal document that details where you want your estate's assets to go (after debts and taxes are paid) and who is going to oversee the execution of the will. It may also provide for the guardianship of any minor children.

Durable Power of Attorney: The durable power of attorney allows you to designate a representative to perform certain actions for you should you become ill, incapacitated or otherwise unable to manage your affairs and is revoked upon your death.

Patient Advocate Designation: The patient advocate designation allows you to appoint a person to make medical decisions on your behalf should you become unable to make any decisions on your own.

Revocable Living Trust: A trust is a document that allows you to provide for the management of assets solely for the benefit of the trust beneficiary. This may include, but not exclusively, managing money for a beneficiary who is a minor or incapacitated, providing for education expenses for children, protecting assets from creditors.

For legal advice on how to establish an estate plan, please consult an attorney.