MICHIGAN, USA — The internet has made do-it-yourselfing easy as can be. But there are some things that are best left to the experts, and one of those things is planning for your future, creating a will or an estate plan.
Attorney Tim Alles joined us from Alles Law to answer some common planning questions and make the case for expert assistance.
1. What happens if I die without a plan? I have a will, is that enough? Probate is required. A common misconception is that a will helps you avoid probate. This is false. A will actually is legal instructions for the probate court to ensure that your estate is distributed as you wish.
2. What is a ladybird deed? Does one make sense for me?
Ladybird deeds can be great planning tools, but must be used with great caution. A ladybird deed is nothing more than a beneficiary designation for your house or any other real estate you own. Therefore, it avoids probate—most of the time.
Reasons you must proceed with caution: Alles shared an example. You have three children and after your death now all three own the property. What if one wants to live there and the other two want to sell? What if one refuses to pay his portion of the property taxes? What if one child has a lawsuit against him and the property is now at risk to paying off that claim?
Do NOT use a ladybird deed without discussing with an experienced estate attorney first. There are other very good ways to handle real estate.
3. What is a trust and what does it do in an estate plan?
- By placing assets in the trust, you can avoid probate. This may be beneficial in some states due to statutory probate fees, and depending upon state law, probate files may become public record.
- Trusts are private, where probate is public. If you have a trust, nobody will know what you had upon your death, which is important to many.
- By distributing the estate assets to an irrevocable trust for the benefit of a child, it is possible to shield estate assets from a child’s creditor, if done properly.
- By limiting and timing the distribution of trust assets to the children, the estate assets can be protected from a spendthrift child.
- Establishing a trust is especially important if a child has a disability.
4. Once I make a plan, am I set for life?
Life and laws change. You got divorced. Your old plans must change. You are now a blended family. Your old plan won’t work. You received an inheritance and now have more complexity in your estate. Your old plan won’t work.
Just be sure to review your plan regularly, every three to five years. Alles Law actually does estate plan audits to determine the best course of action for an old plan.
5. How does a lawyer add value?
The documents are easy, the information you put in them is what makes it personal. Experienced estate planning lawyers add value because they’ve seen problems and learned how best to address them.
Let the team at Alles Law help you with your planning. Visit www.AllesLaw.com or call 616-365-5055.
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