Careful estate planning helps the transfer of a person's assets to their beneficiaries with lower court costs and legal fees. Proper planning also avoids family disputes over an inheritance, or a protracted will contest.
Procrastination is among the biggest planning mistake. Putting off decisions may lead to delays and costs.
For example, a person may have to undergo a guardianship proceeding if they become incapacitated where the judge will decide financial and other important matters. Failure to decide the recipients of inheritances can lead to assets being left to unintended beneficiaries, extended probate proceedings, challenges to wills and family infighting.
Also, estate planning is not restricted to drafting wills. These are public documents that name beneficiaries if a person dies with assets only in their own name and may have to undergo probate litigation.
But living trusts avoid probate, save money and time and avoid legal fights among family members. Trusts are also private documents and provide disability planning because a trustee can manage affairs if a person becomes incapacitated.
Planning should also include other important documents such as a power of attorney which appoints agents who will make legal and financial decisions if a person becomes incapacitated. A health care power of attorney appoints people to make medical decisions if there is incapacity and a living will contains end of life medical instructions.
Trusts should also be created if there are any minors who are beneficiaries. Otherwise, their inheritance will likely undergo probate and a judge will appoint a guardian for them. Beneficiaries who receive their inherence when they are over 18-yers-old may still lack the knowledge and experience to spend it wisely or control it.
Finally, estate plans and documents should not be left in a strongbox and forgotten. It is important to periodically review plans and documents, preferably every three years, to deal with changes to health, wishes, financial situations and laws.
An attorney can help with this planning. They can also prepare documents that assure that a person's wishes are carried out in accordance with Michigan law.