How an estate plan may change throughout a lifetime

| Feb 5, 2020 | Powers Of Attorney |

All adults in Michigan should consider an estate plan, even when they are young and have few assets. At first, this may consist mainly of powers of attorney for finance and health care. These documents allow someone, often the parents, to make legal and financial decision on the person’s behalf if the person is incapacitated. Assets could be passed with a simple will or using other documents, such as beneficiary designations, depending on what kind they are.

Once the person marries or enters a serious relationship, the documents may be updated to reflect that. The person may also want to buy life insurance to protect the spouse. An advance directive or living will can outline the person’s wishes for medical care if incapacitated. When children come along, the person may want to increase the amount of life insurance and revise estate planning documents again. This includes the will, which can name someone as a guardian for the children.

People may also want to consider whether a will is the best choice as the main estate planning document or if a trust would be a better choice. Assets in a trust will not have to go through probate and will pass to beneficiaries immediately. This may also be a time for building a legacy, such as donating to a church or creating a scholarship.

Whatever their age, people may want to work with an attorney to create and revise their estate plan. An attorney may be able to explain what options are available based on the person’s individual situation. It is common for people to assume that trusts are only for wealthy people or to forget to ensure that beneficiary designations are consistent with the rest of the estate plan. Working with an attorney may help prevent errors and misconceptions.