Our own mortality is a very difficult reality for many to face, but there are steps we can take to protect our family and finances before and after we pass away. Estate planning is how these steps are taken, but there are multiple paths one can take. Lawyers that practice estate planning help their clients find the path that will best suit their individual needs. Wills, probates, trusts, medical directives (durable power of attorney for health care, DPOAHC) and powers of attorney are some of the main tools utilized in this process.
A Will provides the instructions on what assets will be distributed to who once an individual passes away, but these assets must individually go through a probate process before they can be allocated to the heir(s). The courts control the probate process, which is why it can be so expensive and time consuming. Therefore, many individuals and families prefer a living trust. Trusts can do the same thing as wills, but they completely avoid probate at death and prevent the courts from controlling an individual’s assets if disability occurs. However, it is still recommended to have a will in addition to a trust to “catch” any assets that were not properly funded into the trust.
Medical directives (DPOAHC) and a power of attorney are essential in estate planning because they allow for medical and financial decisions to be made on an individual’s behalf if they ever become incapacitated, or otherwise unable to make those decisions for themselves. Many people consider the durable power of attorney (POA) as the most important tool in estate planning because it allows an appointed individual to act in place of the appointer if they find themselves unable. When setting up a POA one needs to make sure that their financial firms and their lawyer are on the same page with the appointee being an accepted POA. Medical directives are the same concept as POA, but they are for medical decisions instead of financial.
Understanding the basics of wills, probates, trusts, medical directives and powers of attorney provides a rough sketch of what makes up estate planning. However, there are many variables to consider regarding what estate plan will best fit an individual and the family they wish to protect. David McCleary, a lawyer in Grand Blanc, Michigan, explains, “Every individual and every family faces unique circumstances regarding wills and trusts. For some people, a simple will is enough to properly address their needs; others will require a more comprehensive strategy.” He emphasizes that one thing everyone must do is come up with their overall goals. Doing so helps hone in on the tools needed to build the best estate plan for each individual. David has been working with clients throughout Genesee County for over 25 years and can be reached at (810) 652-5115.
Author - Megan Carry
Guest Blogger for McCleary & Associates P.C.
For More Information
7 Big Estate Planning Mistakes