Frequently Asked Questions About Estate Planning
What is estate planning?
Estate planning is the process of creating legal documents to manage your assets and provide instructions for your care during your lifetime and after your passing. It typically includes a will, trusts, powers of attorney, healthcare directives, and beneficiary designations.
Do I need an estate plan if I don’t have a lot of assets?
You could! Estate planning is not just about wealth. It ensures your healthcare and financial decisions are handled according to your wishes and provides clarity for your loved ones. If you have children, naming a guardian is critical, regardless of your asset level.
What happens if I die without a will?
If you die without a will, your assets are distributed according to state intestacy laws, which prioritize close family members like spouses, children, or parents. This process may not align with your personal wishes or account for special circumstances.
What’s the difference between a will and a trust?
Generally speaking, a will outlines your wishes for distributing assets and appointing guardians for minor children. It must go through probate. A trust allows assets to pass directly to beneficiaries without probate, providing more privacy and control. Many people use both to create a comprehensive plan.
Why is having a will or trust important?
A will or trust ensures your wishes are respected, helps avoid family disputes, and streamlines the process of distributing your assets. Without one, state laws determine who inherits your property, which may not align with your preferences.
Do I need a power of attorney if I’m married?
You could! Being married does not automatically give your spouse the authority to make medical or financial decisions on your behalf. A power of attorney ensures that your spouse (or another trusted person) can act for you if you become incapacitated.
When is probate not necessary?
Probate can often be avoided if assets are:
Held in a trust.
Passed through beneficiary designations (e.g., life insurance, retirement accounts).
Owned jointly with rights of survivorship.
Considered part of a small estate under Michigan law.
How often should I update my estate plan?
You should review and update your estate plan:
After major life events (marriage, divorce, birth of a child, etc.).
If you move to another state with different laws.
Every 2–4 years to ensure it reflects your current wishes and legal requirements.
What is a Lady Bird Deed, and how can it help in Michigan?
A Lady Bird Deed allows you to retain control of your property during your lifetime and transfer it directly to a beneficiary upon your death, avoiding probate. It’s also helpful for Medicaid planning because the property may be protected from Medicaid recovery.