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Oakland County MI Estate Planning Law Blog

What is a power of attorney document for?

A power of attorney document can help older adults and their families deal with future care. But, knowing what these documents can accomplish and their restrictions and is an important part of estate planning. A power of attorney allows the person granting the power, the "principal," to decide whom they trust to act on their behalf when they become incapacitated or unable to make decisions. That person is referred to as an "agent."

A medical power of attorney grants the agent the ability to make decisions about the heath care that the principal receives. A financial power of attorney grants the agent the power to make business and financial decisions. The principal may grant both powers to the same agent. A health care agent may decide the hospital care, surgery, psychiatric treatment, home health care and other medical care that the principal receives, the doctors and health care providers providing care, what the principal eats and who bathes and provides other personal care to the principal. The agent also makes decisions on assisted living, memory care, nursing homes and other residential long-term care. These choices must be affordable, and the financial power of attorney must approve this expense.

Estate plans for Michigan residents without children

An estate plan is not restricted for people with children. Without a will or other estate documents, Michigan law will determine who inherits a person's assets regardless of that person's wishes. Estate planning is also needed to deal with other important issues that can cause disruption and expense for relatives.

A trust is one method that can manage assets during a person's lifetime and allocate an inheritance after death. This process is private and avoids probate litigation. Under this process, most assets are transferred to the trust during a person's lifetime and are allocated in a protected manner after death.

What invalidates a will?

There are very specific requirements in place to make a will valid in the state of Michigan. For example, two people must be present to witness the signing of the will. If only one person is a witness, then the court may have a valid reason to throw the document out. 

You have worked hard to craft your last will and testament, as well as other documents for after you pass away. You want to make sure everything is perfect, so there is no confusion about what your wishes were. Making even one mistake is enough to invalidate a will, and this creates a lot of confusion and heartache for your loved ones. Here are a few of the factors that make a court invalidate a will, in addition to not having enough witnesses. 

Estate planning entering digital world

Personal property, assets and other information is moving online. These include email accounts, cryptocurrency, credit card accounts and photos. Estate planning must address issues on access and disposition of these assets to help avoid problems for an estate's executor or any heir.

These assets are financially significant. The average American had digital assets worth more than $35,000 in 2013. People are routinely handling their transactions online, such as paying bills, dealing with their bank accounts and storing important information online.

Estate planning errors to avoid

A lifetime of success and earnings may not be enjoyed by heirs if wills, trusts and other important estate documents are not properly drafted and there was other poor planning. Effective estate planning can avoid mistakes and provide for the effective distribution of assets and property to heirs.

A person's business should be included in the estate plan. This is especially important if some children work in the family business and others do not. Inadequate planning can lead to the sale of the business to cover estate taxes at a loss. However, purchasing life insurance and equalizing distribution to siblings who do not work at the business can help avoid financial losses.

Wills may not be for everyone

A will may be the first thing that people think about when it comes to their estate planning. However, wills have some disadvantages. A will is a public court document that is used in a probate proceeding when a person died with their assets in their name. The probate process determines whether the will is valid and may be expensive and lengthy. Family members may also seek a larger share of the estate by engaging in a will contest, challenging its validity or allocation of assets.

A will does not provide disability protection. It takes effect and states the beneficiaries only when a person dies. Relying on a will without separate disability planning may result in a guardianship proceeding in which a judge appoints a legal guardian. This can be costly, lengthy and intrude into a person's privacy.

Do you know how to recognize lack of capacity?

If you are the adult child of elderly parents, you may be thinking about helping your parents with their long-term planning. Estate planning is not a topic just for the wealthy; everyone can benefit from advance planning about how to manage their assets after they pass away.

One factor that often comes into play in cases of estate planning, and especially power of attorney, is that of lack of capacity. If you help your parents with their estate planning, or if you are thinking about how to begin the conversation, lack of capacity is one factor you need to take into consideration.

Divorce old estate plans

A divorce often requires changes in relationships and finances. Ending a marriage should also include estate planning changes so that the estate is managed in accordance with a person's wishes after they die.

A will and trust will likely need to be revised to remove the former spouse as a recipient of assets, executor and trustee. Otherwise, the former spouse may receive assets after death and exercise control over the deceased's estate or trust.

Long-term care challenges for LGBTQ people

Long-term care should be addressed well before it is needed. While it may be a difficult issue for many families, long-term planning may present an additional obstacle to the LGBTQ community that needs addressed.

While not recommended, many people do not plan for this care until its too late. Their children then must assume responsibility for making these decisions. However, some LGBTQ individuals do not have this option because they do not have children.

Financial powers of attorney have limits

Estate planning requires preparation for the time that a person cannot handle their financial and health matters. A financial power of attorney is essential and can even address matters after its maker's death. However, these powers of attorney often face hurdles.

The power of attorney only identifies financial agents to act on behalf of the maker of the document, also known as the "principal." The power of attorney does not prevent the principal from acting and handling their finances, even when they are making bad decisions or depleting their funds.

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