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Oakland County MI Estate Planning Law Blog

What is a living will?

End-of-life decisions are an unfortunate but necessary part of long-term planning. Like wills, these plans should be considered as early as possible. A living will is one mechanism used to declare these intentions.

A living will becomes effective after a doctor diagnoses a patient as being terminally ill, and the patient is unable to make or communicate decisions about their care. It usually contains directions on limiting care to making the patient comfortable, identify permissible medical interventions such as CPR and blood transfusions, contains directions on prolonging life, states whether experimental treatments are permissible and the use of specific drugs. The administration of food and water through tubes is a very important item.

Medicare reducing Social Security COLA

Medicare and Social Security is an important part of long term planning for seniors for payment of their medical and other important needs. Recent changes to Medicare premiums reveals the interrelationship between these programs.

Social Security benefits were supposed to raise by two percent at the beginning of this month. This would have raised monthly benefits by an average of $25 to $30 per month for most seniors. However, a new law concerning Medicare premiums led to the channeling of Social Security benefits into the payment of higher Medicare costs.

Consolidating finances

Almost everyone may face the possibility that they become unable to make financial decisions or take care of their daily needs. Experts claim that the ability to make financial decisions generally peak when a person becomes 53 and further decrease after 60. Long-term care planning should include jettisoning and consolidating finances, oddly referred to as death cleaning, which can help guard against financial scams, poor judgment and unethical financial advisors.

Consolidating financial accounts allows for better monitoring of suspicious activities and duplicate investments and saves account fees. Older 401(k) and IRA accounts may be transferred into current employer plans. Various accounts should also be consolidated but FDIC insurance only covers $250,000 per depositor for each financial institution.

Executors have serious responsibilities

The executor is a vital part of estate administration in Michigan. Their responsibilities are numerous, but their experience is often limited.

Right after the death of the decedent, the executor must undertake numerous tasks. These include finding the original will so probate can commence, cancelling the decedent's credit cards, protecting valuables, collecting mail, gaining access to the decedent's homestead, gathering prescriptions for destruction and obtaining several death certificates.

How do you know which will is real?

You have recently mourned the death of your last parent and now you are facing the task of making sure you execute your parents’ will according to their wishes. However, while going through their paperwork, you realize that your parents left two wills. Both appear at first glance to be valid, leaving you with some confusion as to which will is the one to go with. You worry that choosing one or the other could cause hard feelings within your family. This is an uncommon situation, but not one that is unknown for Michigan residents.

Typically, when there are two or more wills, the probate court accepts the most recent one. Your parents might have created more than one version of their will throughout their lifetime, especially if they made their first will while you and your siblings were young. As you might imagine, it becomes necessary for wills to evolve as a family grows and the estate changes.

Avoiding long-term care dilemma

There are many financial uncertainties in the future but there is one thing that most people know will happen. They will become old and ultimately need health care or assistance with performing their activities of daily living. While polls show that 64 percent of adults do not have a will, individuals should engage in long-term planning to finance their medical expenses and other future necessities.

Most individuals want to stay at their home or in a residence as long as possible. This contingency can include the possibility of an unpaid family member or friend assisting or moving in with relatives. Other options require money including visits by a nurse or home health care aide. Adult-day-care services can also assist during the day.

What if I lost my will or forgot where it is?

Wills are such important documents that it seems unlikely you could make one and then lose it or forget where it is. Yet it happens to many people. For example, they make a will, put it in a "secret" space in their home and move 10 years later, forgetting the will is there. Or they put it in furniture that is sold many years down the road.

So, what happens if you realize one day that you lost your will or have forgotten where it is?

Senate tax bill hits family business trusts

Considering and drafting documents for trusts should include tax planning. However, changes to the tax code passed by the U.S. Senate may place family-owned businesses at a disadvantage because trusts may be excluded from deductions and face higher tax rates.

Trusts are traditionally established to preserve a business for future generations or safeguard assets against taxes, a former spouse in a divorce or other claimants trying to seize part of them. Family-owned businesses often constitute pass-through companies such as partnerships, limited liability companies and S Corporations.

Pack up estate planning with move

Michigan residents who move to and even visit other states should not overlook updating their long-term planning and reviewing their estate planning documents. Other states will respect the validity of these documents and plans if they are legal in those states. However, there are important exceptions.

Most state laws are similar. Contracts governed by Michigan law are still enforceable in other states and still governed by the laws in Michigan.

Never too early for an estate plan

Anyone with substantial property must consider how their assets such as home, brokerage account, retirement plan or savings account will be distributed after their death. Heirs who squander their inheritance or court battles are more likely without solid estate planning.

Assets may be protected for future generations with the creation of valid trusts. These can be created with several protections such specifying that assets can pass to beneficiaries when they reach a certain age or restricting the use of money to certain necessities such as education or medical expenses.

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