Although the move to increase people's knowledge of the importance of estate planning seems to have picked up across the country in recent years, many people are probably still confused about the probate process. This is easily understandable. When a person says "probate," some people, even perhaps some of our Michigan readers, will say "what's that?" Conscious of the mystery that surrounds the needs and necessities included in estate planning and probate, the author of one recent article decided to approach the issue in a uniquely simple format: a Top-10 list.
Number one on the list deals with powers of attorney. These documents need to be included in order to appoint someone to make decisions on the planner's behalf in the unfortunate situation that the planner has become incapacitated and unable to make their own decisions. In Michigan, these documents are needed for both financial and medical decisions, and the appointee does not have to be the same person for both situations.
All of the other nine reasons on the list deal primarily with the drafting of a will and possibly trusts. A will or trust allows the planner to specifically designate the individuals or organizations who will receive that person's assets upon death. Without a will, state law makes that determination. For those with minor children, a will also includes a section to designate a guardian for those children in case both parents are deceased. Again, without this provision in a will state law will fill the role of deciding this issue.
A number of the items on the Top-10 list address the reality of the old saying "you can't take it with you." Certain assets, like retirement accounts and businesses, may need special attention to ensure that they are passed on to the appropriate beneficiary, and in the case of business ownership ensuring that the business stays in capable hands.
Why create an estate plan? The answer is different for everybody. However, some of the issues included in the recent article will apply to almost every situation.
Source: New Britain Herald, "Senior Signals: Ten reasons to create an estate plan," Daniel O. Tully, April 21, 2013