Wills and Powers of Attorney

The vast majority of Americans are familiar with the concept of a Will, and while the majority of Americans understand the need for a Will, a large percentage never make one or consult a wills lawyer to draft one for them.

Wills can take a variety of forms and can be used for a variety of purposes in Michigan. In general, however, a Will is used to spell out how a person wants their assets divided at the time of their death. It may also address the payment of debts, conditions upon certain gifts to certain individuals, etc. The Will should be drafted as part of an overall estate plan for the person or married couple considering the Will. Please refer to the Estate Planning section of this website for more information about a complete Estate Plan.

At its core, a Will has traditionally been the foundation of any estate plan. In addition to the Will, someone should consider powers of attorney, living Wills, trusts, life insurance, non-probate assets, etc. in their overall estate plan. As has been discussed in the Estate Planning section of this website, all of these elements of the estate plan should be carefully coordinated to provide the maximum benefit.

The person who creates a Will is generally known as the “Testator.”

Simple Wills. A simple Will contains basic provisions related to the disposition of a person’s estate upon their death. The Will also appoints someone to handle the Testator’s final affairs after death. Although the simple Will does not address estate tax concerns, it is the most appropriate option for someone whose estate does not present estate tax concerns.

Wills with Tax Planning. In some cases, the Testator’s assets are great enough that they require consideration of various alternatives to avoid estate taxes at death. In these cases, the use of a Will that incorporates tax-planning provisions is most appropriate. These provisions allow the Testator to use the assets during their lifetime, but upon death, the assets are distributed in a manner consistent with the tax-savings goal of the tax provisions in the Will. Although a Will with tax planning provisions is obviously more complex than a Simple Will, it is appropriate for someone who has tax concerns.

Powers of Attorney. Anytime that someone is looking at their estate plan, they should consider the creation of powers of attorney to appoint someone to act for them in the event of their incapacity. In Michigan, powers of attorney are created for both medical and financial concerns, and they are very important should something happen requiring that someone step in and make decisions for you.

Living Will or Physician’s Directive. In the wake of the Terry Schiavo controversy, the concept of Living Wills (more appropriately called a Physician’s Directive) has become very important to many people. The Living Will addresses your desires regarding life-support treatment in the event that you are not able to communicate these decisions to a doctor.

Handwritten Wills. Not surprisingly, many people have questions about whether or not a handwritten Will can be upheld as valid. Although they can, handwritten Wills require very specific elements. Without them, the handwritten Will is not considered effective and will not be used to dispose of the Testator’s assets at death.

We have found that many of our prospective clients frequently have questions and misconceptions about Wills and the disposition of their estates. If you have questions that we have not addressed in this section, please feel free to Contact Us with your questions, and we will be glad to answer them.

What Happens if You Die Without a Will

Many clients ask the attorneys at Channelle Kizy Law Firm about what happens if someone dies without a Will. We routinely advise clients that the probate process when someone dies without a Will is much more complex and expensive. Instead of the assets being divided according to the provisions of the Testator’s Will, the assets are divided according to the provisions of Michigan law. Even if the Testator had expressed desires prior to their death about the division of their assets, those desires are not followed unless they are contained within a well-drafted Will. The costs associated with creating a Will pales in comparison to the problems and cost that can arise from not having a Will. We highly recommend that every adult in the United States should consider a Will, and we advise our clients and prospective clients to seek competent advice from a lawyer who practices in this area before creating a Will.

Trusts

A trend has developed which encourages the use of Trusts as a part, or in place of, traditional estate planning. While attorney drafted trusts can be utilized effectively in a variety of situations, many questions exist for most clients about the nature of trusts, how they are used effectively, or when they may not be appropriate, etc.

This Trust section of our website is designed to answer some of these questions for you if you are seeking counsel from a trust lawyer in Farmington Hills, Michigan or anywhere in Michigan. We provide information about Education Trusts, Testamentary Trusts, Revocable Living Trusts, Spendthrift Trust provisions, Crummey Trusts and Irrevocable Life Insurance Trusts. Each of these trusts has different uses and benefits, but an understanding of each is important before you consider creating a trust.

However, before you explore the different types of trusts, it is extremely important that you understand some basic terminology and definitions used widely when talking about trusts. Those definitions are as follows:

Trustee: The person designated in the Trust Agreement to take possession of the trust assets and manage those assets. He must also preserve and manage the assets according to the provisions in the Trust agreement.

Trust Agreement: The Trust Agreement is the document that creates the Trust and sets out the provisions related to the Trust. For instance, it will generally designate the trustee, the beneficiaries, and the purposes of the Trust. It will also typically include provisions designed to guide the trustee in fulfilling his duties.

Grantor: The person(s) who creates the Trust Agreement. In order for the Grantor to create a valid trust, he must designate a trustee and a beneficiary. He must also transfer assets into the Trust.

Beneficiary: The Trust Beneficiary is the person(s) who receives the benefit of the assets in the Trust.

With this brief explanation of the terms most commonly used when referring to Trusts, you are ready to explore the various types of trusts included on our site. Following is a brief explanation of each trust covered. Please click on the link for each to obtain more complete information.

General Information Related to Trusts: In this section, we provide you with a general overview of the concepts related to trusts. We recognize that many of our clients and potential clients often have misconceptions related to what a trust actually is, its proper use, etc. This section should help to provide a background on these issues so that you can then understand the specific types of trusts explained elsewhere in this site.

Testamentary Trusts: The concepts of Wills and trusts combine when you consider the creation of a Testamentary Trust. Theses trusts are created under your Will and will control the management of your assets after your death. These trusts have a wide array of uses, but they are very often used to provide for the management of assets for minors and young children in the event they might become entitled to receive property under a Will.

Revocable Living Trusts: In recent years, the use of Revocable Living Trusts as a substitute to traditional estate planning has exploded in many states. In Michigan, however, the uses of these trusts as effective estate planning alternatives have limited usefulness. The effective use of these trusts is discussed, but also we discuss many of the myths and misconceptions related to the uses of these Trusts.

Educational Trusts: One of the primary concerns that many parents and grandparents have is setting aside money to provide for education for their children and grandchildren. In spite of this desire, those same parents and grandparents recognize that the best interests of their children is not served by giving large sums of money to minors or young adults who might rather buy a car than pay for an education. As a result, the use of an Educational Trust becomes a very appropriate option for providing money for education while ensuring a mechanism to make sure the money is used appropriately.

Spendthrift Trusts: Another concern of people creating trusts is that they want the assets of the trust to be protected from the attacks of potential creditors of either the Grantors or the Beneficiaries of the Trust. Spendthrift provisions can be incorporated into a Trust, which will then protect the trust assets from attack.

Crummey Trusts: People making gifts into Trusts generally make those gifts for a variety of reasons. However, regardless of the reason, they do not want to give up their money and pay gift taxes on top of giving away their money. The Crummeytrust provisions make it possible to make gifts to a trust while excluding some portion or all of the gift from potential gift tax complications.

Irrevocable Life Insurance Trusts: Life insurance policies can very often present estate tax problems for the person who owns the policy. To combat the estate tax complications, the Irrevocable Life Insurance Trust provides an alternative to own a life insurance policy while completely excluding the proceeds from the estate for tax purposes.

We hope that all of the information contained in this Trust Information Center will provide you with a background of information to understand decisions that you might consider related to Trust options. In addition to any education that you receive as a result of the information provided on this site, you should always consult an attorney to fully understand your legal options. The attorneys at Channelle Kizy LLPC are always glad to discuss your Trust options, as well as all of your estate planning options.

Contact us:  info@kizylaw.com