Exactly What is a Living Trust?

Since restarting the blog we have mentioned Trusts as part of estate planning but have not explained what a Trust is, how it works, and the different types of Trusts. Trusts are a useful tool in assembling an estate plan, and one we frequently recommend for a variety of reasons. Most of the time when discussing Trusts we are referring to Living (also known as Revocable) Trusts. In the context of Trusts, the terms “Living” and “Revocable” both mean that the Grantor (Signer) of the Trust may change the terms of the Trust after it is initially executed. We use Living Trusts in estate planning, because a Grantor can amend or restate their Living Trust as needed when the Grantor’s circumstances change. Under most circumstances, a Grantor can change a Living Trust at any time up to their death, at which time it becomes an Irrevocable Trust and the terms cannot be changed (Irrevocable Trusts are different from Living Trusts in many ways but we will discuss those at a later date when we write a blog on Irrevocable Trusts).

A Living Trust is a written document that establishes a legal entity, similar to a Corporation or L.L.C., which owns property on behalf of a person, which is the Grantor while alive and the Trust Beneficiary after the Grantor has died. The person responsible for managing the property the Trust owns is the Trustee. A simple way to look at a Living Trust is to imagine a large empty bucket that Mr. and Mrs. Jones (the Grantors of the Trust) create by signing the Trust document. The document provides that Mr. and Mrs. Jones are the Grantors of the Trust and name themselves as initial Trustees who get to control what goes into the bucket. As Grantors and Trustees they get to transfer assets into and out of the bucket at any time, and as the beneficiaries of the Trust during their lives they get to use the assets in the bucket however they wish. This collection of circumstances means that there is almost no difference between the Joneses owning the property and the Jones Living Trust owning the property. In both cases, the Joneses can do anything they want with the property.

During their lives the Joneses put all of their property in the bucket, including, homes, bank accounts, investments, and other personal property. They can also provide that assets with beneficiary designations, such as insurance policies and retirement accounts, can designate the Trust as the beneficiary. When the Joneses die, the Trust Document provides detailed instructions of how the assets in the bucket are to be administered. The first instruction is a list of people who can pick up the bucket (the Successor Trustees). The Successor Trustees then pick up the bucket and follow the rest of the Joneses instructions regarding how the property in the bucket is to be distributed.

A major advantage of a Living Trust in the context of estate planning is the ease with which a Successor Trustee can take over the management of the Trust. If you recall from our early posts, when a person owns property at their death, that property must pass through the Probate Court before anyone can do anything with the property. This is not true for a Living Trust, because a Living Trust is not a person and the Probate process only affects individuals. Instead, the named Successor Trustee (or Trustees if more than one person is named to act) sign an affidavit know as a Certification of Trust and present proof that the previous Trustees are unable to act (usually in the form of a Death Certificate). With those two documents, the successor Trustees can take over the administration of the Living Trust.

Now the successor Trustees still have a fiduciary duty to act in the best interests of the Beneficiaries, meaning that the Successor Trustee must administer the Trust in the best interest of the Beneficiaries and never for their own advantage. The successor Trustees need to take control of the Trust's assets, prepare an inventory of those assets, provide notice to creditors, pay outstanding bills, and handle tax related matters, all before making distributions to the Beneficiaries. However, unlike with a Will, a successor Trustee does all of these things without the supervision of the Probate Court.

While this improved ease of administration is great in general, it is even better when dealing with minor Beneficiaries or Beneficiaries suffering from a legal incapacity or financial immaturity. In cases such as this, a Trust allows the Trustee and the Guardians named to care for those Beneficiaries to work together to ensure there are sufficient assets available to care for the Beneficiaries without the need to report to the Probate Court on a regular basis. This eliminates much of the cost of administration and retains more assets for the care of the Beneficiaries. The Trust can also be used to distribute assets over time to those Beneficiaries who do not have the financial maturity or discipline to manage the assets themselves.

We hope that this simple explanation of Living Trusts helps you to understand how a Living Trust can fit into an estate plan. There is a great deal of information that we just cannot fit into a blog that is less than 1,000 words so please check back for further explanation on the subject. Also remember, a Trust is a complex legal document and must be drafted correctly to function as intended. It is always best to consult with an attorney experienced in estate planning before attempting to make use of a Trust, because as with most subjects, you can find as much bad information as good information about the supposed benefits and drawbacks of Trusts.

Matt and Al

Pour-Over Wills 2.0

We’ve discussed how both Wills and Living Trusts can serve as important parts of an estate plan and how a Living Trust acts as a substitute for a Will, eliminating he Probate Court interference. With that knowledge, many clients wonder why they should bother to have a Will at all. In most cases, the inclusion of a Will in an estate plan is a form of insurance to protect against the unexpected.

It is important to remember that a Living Trust allows the avoidance of the Probate court because the Trust owns property instead of the individual, but the Trust does not automatically become the owner of property. Clients need to fund (“transfer”) their assets to the Trust (a process that we will discuss in detail in the coming weeks) in order for the Trustee of the Trust to control the assets. While we work with our clients and their advisors to assist with the funding, occasionally there will be an asset the client fails to fund to their Trust. The Will fills the gap in administering such an asset.

When a person has a Living Trust and still owns assets in their own name at death, the terms of their Will, commonly termed a Pour-Over Will, provides instructions to the Probate Court regarding the distribution of the person’s assets. In this case, the Will instructs the court to distribute all of the person’s assets to the successor Trustee of the person’s Living Trust, ensuring that the Trust remains the vehicle for controlling the final distribution of assets. Having a Will in place to give the Probate court these instructions simplifies the Probate process and assures that a person’s wishes for asset distribution are used instead of the intestate statute under Michigan law.

While Probate is never a desirable option for administering an estate, a Probate using a Pour-Over Will is much better than a Probate without any Will. In the absence of a Will, assets not funded to a Living Trust would be subject to the Michigan intestacy statutes, requiring a formal Probate proceeding and appointment of a Personal Representative who is required to distribute assets directly to the deceased’s heirs at law under the intestacy statute rather than what might be they specific desires of the deceased. In addition to distributing significant amounts of assets to heirs the deceased would not want to benefit, such distributions may be inefficient or undesirable if the heir is a minor or under some form of incapacity and unable to responsibly manage their own affairs. This type of situation could contradict the terms of the deceased’s Living Trust and require the ongoing supervision of a court appointed Conservator for many years.

Even when a client is meticulous with their funding, a Pour-Over Will can protect against the unexpected. The Pour-Over Will ensure that all of a person’s assets, even those they do not know exist, become part of the Trust assets. It also allows assets that only arise after a person’s death, such as the proceeds from a Wrongful Death Lawsuit, to become part of the Trust assets. 

A Pour-Over Will, coupled with a Living Trust, serves as a safety net to an estate plan. It makes sure that the Living Trust remains in control of asset distribution even when circumstances do not go as expected. In this way, it is just one of many forms of protection that make up a properly drafted estate plan designed to ease the difficulty of an already trying time for family and friends. There are other more complex methods of using a Will in conjunction with Trusts but we will discuss such things in future blogs.

Matt and Al

Thankful

We are thankful for the opportunity to make our living with a practice that focuses on helping others achieve their goals and protect their loved ones.
We also thankful for all the people who work with us to make that happen from the staff in our office to the planners, advisors, and other professionals with whom we work.
We hope you have a happy and safe holiday season. We'll be back on Monday with more information on Estate Planning.

Matt and Al

Why You Should Pay Attention to Net Neutrality

Today we are taking a break from estate planning to address another area of law that has been in the news a lot in the past year, Net Neutrality. The goals of the blog have not changed; we are still taking a complex topic and explaining it so that more people understand what Net Neutrality means and why it is important to your lives.

Net Neutrality is the principle that all content on the internet is equally accessible, which means that Internet Service Providers (ISPs) like Verizon, Comcast, and Time Warner Cable cannot favor a particular website over any other website. This has been the case since the inception of the internet. Customers pay an ISP for access to the internet, content providers (like Netflix, Amazon, and niche legal subject blog writers) pay an ISP to create a connection from their content to the internet, and then customers use the connections provided through the ISPs to go wherever they want online. Presently, every service provider, from ESPN.com to Plainly-Legal.com is equally accessible; and the “path” to every website is open and the same size.

In 2015, the Federal Communications Commission (FCC) put in place strong rules that enforced the principle of Net Neutrality, maintaining decades of precedent, and creating an equal opportunity for two attorneys writing about estate planning equal access to anyone online as any other website. These rules prohibited ISPs from blocking websites or giving priority to certain websites. This means that an ISP cannot block their customers from reaching this blog, nor can an ISP redirect their customer to a different website when they attempt to come here. There is broad support for these rules from content providers, business founders, activists, investors, and the typical internet user who just wants to check their email.

On November 21st the FCC announced that it intends to reverse the existing Open Internet Order which protects the principle of Net Neutrality. This announcement comes despite the fact that millions of Americans have contacted the FCC to comment in support of Net Neutrality. Ajit Pai, Chairman of the FCC, has indicated that the opinions of Internet users are of little importance compared to the opinions of ISPs. It is Chairman Pai’s position that the companies who provide access to the internet should have the loudest voice when discussing what rules they should follow. Companies involved in an industry often have a larger voice than customers or users when it comes to the laws and regulations that govern their business, but in the context of ISPs it is especially troubling because many of these companies enjoy effective monopolies or duopolies over their customers. In a normal business environment if you do not agree with the actions of a company you can stop using that company. However, the United States the vast majority of people have two or fewer choices when it comes to access to high-speed internet, and if you do not like your ISP you might have no options if you want to access the internet

So what does all of this mean? It means that unless Congress acts to preserve access to the internet in its current form, the FCC will vote on December 14th to remove current protections for Net Neutrality. We know that these changes will occur because the opinions of the FCC Commissioners are publicly available. If you want to get involved there many resources available. As we noted there are a lot of people in favor of maintaining the internet in its current form. Here are just a few websites that have more information:

Electronic Frontier Foundation

Free Press

Battleforthenet.com

American Civil Liberties Union

Center for Media Justice

We hope that you will take the time to get involved with this important issue and help ensure that the internet will continue to be an open space where all websites, especially blogs on estate planning issues, continue to be available to anyone who wants access to information. 

Matt and Al

Estate Planning as a Process 2.0

We often refer to estate planning as a process, which confuses some people because they think that an estate plan is just a set of documents. The difference between those two philosophies is important because it gets to the core of how planning should work. When many people think of a plan they think about creating a set of instructions for dealing with a situation, with estate planning that means a set of instructions for addressing incapacity and death. The problem with this mindset, at least with respect to estate planning, is it does not address the changes that begin occurring in a person’s life immediately after signing their plan documents. While for some people those changes may be subtle and have little impact on their estate plan, for others it is important to make changes in the plan to address the changes in their lives. This is why estate planning needs to be an ongoing process.

For younger clients changes in employment, location, and relationship status are frequent motivations to update planning. Making sure clients properly fund new assets to Living Trusts is part of the regular review process. Assets to be funded can include everything from investment accounts to real estate, and consideration of beneficiary designations for IRAs, 401(k) accounts and life insurance policies is important. Events such as marriages and births of children require updates in planning to include these new important people as beneficiaries and designees.

As clients get older, the need for updates continues. A client's original designees for assisting in administrating estate planning documents also age and children become more mature. Many clients choose to update their planning to ensure their children are the primary decision makers. If children fail to mature as expected or encounter other problems, changes to distribution provisions allow the estate plan to evolve to protect those children in the event they need additional guidance.

As clients reach retirement, and beyond, regular review of a plan continues to be important to address the changes life brings. From periodically reviewing funding to ensure that all of the assets accumulated throughout life are titled correctly to ensuring that designees have the authority to address the unique challenges that come with aging, estate plan review can catch issues that become more pressing as a client gets older.

As you can see, no matter what stage of life a client may be in presently there are many changes that should cause them to update their planning. If an estate plan is just a set of documents they sign and put in a filing cabinet, those updates may not occur and cause problems in the event of an emergency. When estate planning is a process, where an experienced attorney works with you to review life events and update your plan accordingly, that plan becomes stronger with each review. Even if a review results in no immediate changes, open communication allows the attorney client relationship to grow and makes it easier on all involved to discuss some of the more challenging aspects of estate planning.

With the holiday season approaching and the end of the year on the horizon, now is a good time to take a few minutes to review current planning and reach out to trusted advisors to discuss the need for updates. For those without a current estate plan, it is also a great time to put a plan in place for the first time. No need to wait for a New Year’s Resolution, start the process now.

Matt and Al

Making Choices 2.0

Since relaunching the blog, much of our focus has been on ability for an individual (the Principal) to choose other people (the Designees) to have the ability to make decisions in the event that the Principal becomes incapacitated. For almost every client this gives rise to the question, "who should I choose?" As with all of the decision-making aspects of estate planning, the answer to that question lies with the person who is creating the plan. As advisors and counselors, we can provide some insight into that decision, but ultimately it is one that must be made by the client.

Many of our clients struggle with choosing a single individual to name as a Designee, sometimes out of concern that the responsibility will create too heavy a burden for one person to handle. The good news in these circumstances is it is possible to appoint multiple Designees to work together to serve in any given role. This means that two or more people may be named to work together, either by unanimous consent, by majority rule, or each acting independently, in order to manage the responsibilities of serving under a Power of Attorney, Will, or Trust. While naming multiple Designees is always an option, it may not be the most efficient way of managing affairs, as naming multiple Designees normally requires those individuals to work together to achieve results. Further, with respect Designees named to make medical decisions under a Patient Advocate Designation, we generally recommend that our clients name a single person to serve as the Patient Advocate at any given time, in order to avoid creating a situation where multiple Designees cannot agree on a course of medical treatment, so doctors require that the Probate Court name a Guardian to remove uncertainty. The goal of implementing a Patient Advocate Designation seeks to avoid the Probate Court, not create a situation that requires it.

We make clients aware that they have the freedom to name anyone they desire to serve as a Designee, but all too often clients delay estate planning decisions due to concerns about their Designees. A common worry is someone who is not named will feel disappointment or even anger because of their omission. In those circumstances we find it helpful to remind our clients it is in their own best interest to choose the people that they believe have the capacity to fulfill the responsibilities of the role, especially as it pertains to them. If that means that a single child is named as the primary Designee in all of the documents because the child is more responsible, so be it, because that child has the ability to manage the responsibility. If the person named as the Designee in the Power of Attorney for making legal and financial decisions is different from the Designee in the Patient Advocate Designation for making medical decisions, that too is acceptable because the goal of naming Designees is to have the people best equipped make decisions making those decisions. Ultimately it is important to consider the consequences of naming someone less capable simply to avoid hurt feelings. Under those circumstances most people are able to trust their instincts, name the individuals who will do the best job and have enough peace of mind to set aside the worry that someone not named will be offended.

The bottom line in all of this is that the Designees named in an estate plan are essential to the success of that plan. While it is possible to name multiple individuals to work together, that is not always the most efficient way to administer a plan. The success of the plan is the result of naming the best people for the job. These decisions are not always easy and every planning situation is unique, which is one reason why it is especially useful to work with an attorney experienced in estate planning. That attorney should take the time to assist and guide you through the process of choosing Designees that meet the standard.

Matt and Al

Estate Planning Impact During Life 2.0

In our previous blog, we began unravelling the mystery that is Estate Planning by focusing on what happens when a person dies without a Will. Today’s blog focuses on how an Estate Plan can help avoid problems and complications during lifetime. While planning for an orderly transition at death is a major component of Estate Planning, a person is more likely to become disabled due to injury or illness rather than die, and planning can be critically important for these situations. Today’s blog discusses the “here” component of Estate Planning when someone becomes disabled but does not die.

When we discuss the “here” of Estate Planning we are talking about Powers of Attorney and Patient Advocate Designations that allow a person to designate who will have control of their lives in the event they are unable to control their lives. Each of these documents serves a different role, so it is important to understand what each does, when they work, and who should be named to handle the decision making responsibility. As you continue reading, keep in mind the person who signs and has these documents is known as the Principal and the person named to act on the Principal’s behalf is the Designee.

The Durable Power of Attorney is the document that gives the Designee the authority to make legal and/or financial decisions on behalf of the Principal. While Powers of Attorney can cover a wide variety of circumstances and specific powers, a Durable Power of Attorney for Estate Planning purposes gives much broader authority to make decisions on behalf of the Principal. The word “Durable” in relation to a Power of Attorney means the document is intended to be legally effective even if the Principal becomes incapacitated. Including a Durable Power of Attorney in your Estate Plan provides a tool to loved ones, allowing them a broad spectrum of powers, including, but not limited to, the ability to continue to pay bills, run a business, and even file lawsuits in the event that the Principal become incapacitated.

In the absence of a Durable Power of Attorney, a person wanting to make legal decisions on your behalf must file a Conservatorship Petition in the Probate Court. In addition to dealing with Estate Administration, the Probate Court is responsible for reviewing these petitions, appointing, and supervising those people named to make decisions on behalf of others in the absences of a Power of Attorney. The Probate Court process can be cumbersome and will include multiple hearings, documents, and meetings with attorneys. While it is important that this process exists to assist those who fail to plan, having a Durable Power of Attorney avoids these delays and additional stresses in what is likely already a very stressful time.

The Patient Advocate Designation is similar to a Power of Attorney (and is sometimes called a Medical Power of Attorney or Appointment of Healthcare Surrogate) but this document allows a Designee to make medical decisions on behalf of the Principal in the event the Principal does not have the capacity to make them. A well drafted Patient Advocate Designation grants the authority for the Designee to make a wide variety of decisions, including treatment options in emergency situations and long-term medical decisions such as recovery/rehabilitation alternatives. In the most extreme circumstances, a Patient Advocate Designation also allows the Designee to make decisions regarding end of life care, the so called “pull the plug” decision. These are important and serious powers to grant to another person, which is why we also include a Living Will as part of our Estate Plans. The Living Will (sometimes called an Advanced Medical Directive) articulates a Principal’s desires regarding their care, allowing them to communicate those wishes to their Patient Advocate, even when the Principal is unable to speak.

As the Conservatorship is the Probate Court equivalent of a Power of Attorney, a Guardianship is the Probate Court equivalent of a Patient Advocate Designation. This Probate Court process can determine who has the power to make medical decisions in the event another person cannot make their own decisions, but it is still a much more time consuming and stressful situation, requiring multiple meetings and hearings before decisions can be made. A Patient Advocate Designation ensures that the person you want making decisions about your care can make them promptly without waiting for the Probate Court to weigh in on the matter and select a person the Principal might not otherwise selected.

The Durable Power of Attorney and Patient Advocate Designation are important aspects of the Estate Plan. Choosing a Designee, and a successor Designee if necessary, is an important decision and we strongly recommend that the people chosen to be named in these documents be the people who our clients feel are the most likely to make the decisions that the client would want made. While it is true that many clients worry if children (or parents) will be hurt or offended if they are omitted, but we feel it is better to name those people you feel are able to handle the responsibilities than to include someone who cannot or will not make the decisions that are best for you.

As with much of what we write about, there is a great deal more to this topic. While we strive to provide you with good information, it is important to remember to consult with an attorney experienced in Estate Planning before taking any action in order to avoid potentially expensive mistakes.

Matt and Al

What's the Worst that Can Happen 2.0

"I need to take care of estate planning, but I keep putting it off. 

What's the worst that could happen?"

Estate planning is a mystery for many people, and they do not know where to start to unravel the mystery.  They are not sure what information they need to begin the estate planning process or what questions to ask. People have a vague understanding of what a Will is, and they have heard the terms Living Trust, Patient Advocate Designation or Power of Attorney, but do not understand what those documents do. They get the impression that having an estate plan is a good thing, but never truly understand how that plan can protect them and their loved ones. When those people speak with us, or other attorneys, and begin to learn more about the estate planning process, they are frequently relieved to discover that the process is neither as costly nor as time-consuming as they initially believed. But as they learn the benefits of an estate plan they also become curious about the consequences of not having a plan. Over the next two blogs we will review the consequences of failing to have an estate plan.  We can then move on to discuss the benefits of estate planning and specific strategies for various situations.

First, the good news, it is impossible to die without an estate plan. An estate plan, at its core, is a set of directions regarding the distribution of a person's assets at their death. The Probate Court is the government body responsible for ensuring that a person's directions are carried out. The most common tool for articulating these directions to the Court is a Will. The Will tells the Court who the deceased wants to distribute assets to and who should be responsible for making those distributions (the "Personal Representative" or PR for short). 

When a person dies without a Will, the Probate Court defaults to Michigan's intestacy (legal speak for “dying without a Will”) laws which imposes a distribution plan on that person's assets. This default plan can be sufficient for some people, but in many cases the intestacy laws create unfavorable results because there is no flexibility to distribute other than to “family” members in relatively equal proportions. 

The Probate process, when using the intestacy laws, is lengthy, public and cumbersome because the Probate Court must act as a decision maker and supervisor throughout the whole process. The Probate Court has the responsibility for approving a Personal Representative and then supervising the PR as he or she navigates the process of locating all of the deceased's property, handling claims from creditors, determining who is entitled to distributions, and finally making distributions. Throughout this time there will be multiple hearings, filings, and Orders needed to finally resolve the process and allow the appointed PR to make distributions. 

In a best-case scenario, where all of the heirs are adults, creditors are known, and there are no substantial conflicts among heirs, probate may be completed within 8 to 16 months depending on the efficiency of the PR and the Probate Court. If there are any issues with the estate, the probate process can be ongoing for several years. During that time, each visit to the court will have both a financial and time cost for the estate. In a simple uncontested Probate Court costs are likely to add up to 3 to 5% of the estate's assets. The longer the probate process drags, on the greater the amount of assets consumed by court fees and expenses.

When a person dies with a Will, the Probate Court is still involved in the transfer of asset but unlike an intestacy situation, the Court has clear instructions from the contents of the Will as to whom the deceased wants to serve as the PR and to whom assets are to be distributed. Additionally, through the Will, the deceased can request an informal probate of the estate, which dramatically simplifies the process. The informal probate process limits the number of hearings and filings needed in the event of an uncontested estate. While the Probate Court is still involved in the administration of the estate, the involvement is limited to a more supervisory capacity thus limiting the costs in time and money for the PR and the estate. 

This is only a brief synopsis of the differences between dying with or without a Will, one that does not even begin to address the problems that can arise if everything does not move smoothly. Additionally we have not discussed yet some of the other documents that may make up an estate plan which can simplify the administration and distribution process to eliminate the involvement of the Probate Court completely. Further, today’s post only addresses events after a person dies, estate planning also includes preparing documents, such as Durable Powers of Attorney and Patient Advocate Designations that simplify decision-making in the event that a person becomes incapacitated and cannot make decisions for himself or herself, 

 With all this in mind, it is important to remember that the "worst that could happen" will have very little effect on a person who fails to plan because they will be gone. The cost in time, money, as well as the stress and problems, will all fall on the shoulders of their loved ones, who are already dealing with a loss. The worst that could happen to them is potentially devastating but with some relatively simple planning it is possible to greatly decrease the issues and problems loved ones will need to address. 

Matt and Al

Why You Need an Estate Plan 2.0

Congress is currently engaged in the task of revising tax law, including provisions relating to estate tax. The current proposal calls for raising the estate tax exclusion amount (the threshold over which a person incurs estate tax liability) from the current $5 million per person plus annual cost of living increases to $10 million per person plus annual cost of living increase. Additionally the estate tax would eliminated entirely in 2024. While we am personally skeptical that this is a “middle-class” tax cut, whether the current exclusion is retained, doubled, or entirely eliminated, it will have no effect on the estate planning for 99.98% of taxpayers or our clients. 

Over the last 40 years there has been an overemphasis on trying to avoid estate taxes when talking about estate planning. This has fueled the misconception that estate planning is only for the wealthy who want to control their fortunes from beyond the grave and minimize the amount of taxes their estate might have to pay. The reality is, as the estate tax exclusion has increased over time and eliminated the concern of estate taxes for most people, protecting one’s family and avoiding the state probate process has become much more important. Estate planning creates your blueprint for taking care of your loved ones in those hardest of times after your passing, and taking care of yourself and the ones you love if you are incapacitated because of illness or accident.. 

There are four common documents that make up an estate plan, two of those documents address concerns about the "here" while the other two address what happens in the "hereafter." The "here" refers to a situation where a person becomes incapacitated and unable to make their own decisions while the "hereafter" documents address the administration of assets following a person's death. We will address each briefly in this blog and discuss each and more detailed in future blogs.

The "here" documents include the Durable Power of Attorney and the Patient Advocate Designation, which allow you to appoint others to make decisions for you in the event of sickness or incapacity. This ability is important because it allows a trusted family member or friend to make immediate financial, legal, and medical decisions if you become incapacitated, rather than having to go through a long and costly court process. 

The Durable Power of Attorney names a person who, usually upon your incapacity, has the authority to deal with your financial well-being, including arranging for payment of bills, filing insurance claims and lawsuits, and handling other business matters on your behalf. 

The Patient Advocate Designation appoints a person to make medical decisions on your behalf, up to and including “pull the plug decisions”. Anyone over the age of 18 should have these documents because absent the existence of these documents it becomes necessary to Petition the Probate Court for the authority to make financial, legal, or medical decisions on behalf of another person, this process can be time consuming and cumbersome especially when a loved one needs assistance immediately.

The “hereafter” documents, Wills and Trusts, are documents that serve to enforce your asset distribution wishes after your death. These documents create an organized distribution scheme for your assets that you can modify as your situation and assets change, and if funded properly, can avoid the cost and time delays of probate under state law. The similarities and differences between a Will and a Trust, as well as how they work together, will be discussed in greater detail in future blogs.

At this point, if your answer to any of the following questions is “yes”, you should consider estate planning: 

1. Do you have minor children? A Will and/or a Trust will allow you to name Guardians you are comfortable with to raise you children and ensure that any assets you can pass along to your children are used to their greatest advantage.
2. Do you have assets?  Whether the value of your assets is large or small, a properly drafted estate plan allows you to determine who will receive your assets and under what terms or conditions, rather than having your assets distributed pursuant to a state statute.
3. Do you want to determine who will be able to make legal and medical decisions on your behalf in the event you are incapacitated? Knowing who will make decisions on your behalf is very important because it allows you to guide those people with respect to the decisions you would want them to make. It also eliminates the stressful need to involve the Court when decisions need to be made promptly.

It should be clear that regardless of the size of one’s estate, proper planning is necessary for a number of reasons besides estate tax concerns. An attorney experienced in estate planning can answer your questions and help guide you in preparing a plan that fits your needs, being available to work with you to change your plan as your needs change, and being there to assist and guide your loved ones through those difficult times after your death.

Matt and Alan

Introduction to Plainly Legal 2.0

Estate planning is an area of law that is constantly evolving and adapting to a variety of influencing factors. While the impact of changes in the law are a significant driver of change in estate planning it is important not to underestimate the impact of judicial decisions and development of new technology on the field. Over the course of the last 20 years, we have seen a refinement of the law to address some of the issues that have arisen due to other societal changes during that time, but often it is the responsibility of estate planning professionals and their clients to attempt to resolve situations in the absence of clear statutory guidance. This ongoing evolution is one of the many reasons why we consider estate planning an ongoing process that requires a strong attorney-client relationship built over the course of many years. In the coming days and weeks we will be reviewing and revising many of our previous blog posts in order to update and improve the information contained on our blog and to begin addressing potential changes that could result from Congress's current push to reform the tax code.

We normally encourage our colleagues and clients to review their estate planning as the year comes to a close, this year is no different because, no matter what comes from the legislative efforts in Washington, changes in individual lives generally have a much greater impact on an estate plan than changes in the law. Regular review is essential to confirm that the terms of your estate plan still aligned with your goals for managing your affairs in the event of your incapacity or death. As often as a client contacts us to update a designee or beneficiary in their estate plan, we also hear from clients who need to make significant changes to their estate plan because the goals of their planning have changed over time. We hope that the information we provide to you through the end of the year will prove useful, answering your questions and concerns regarding estate planning and to assisting you in a review of the current state of her planning (or lack thereof).

As you read through our posts, if you find yourself stuck with questions that we have not answered or topics that you would like us to address, please do not hesitate to contact us directly and we will do our best to assist you.

Matt and Alan