Estate Planning - Patrick & Associates, PLLC

Should Digital Assets Be Part of Your Estate Plan?

Patrick & Associates, PLLC — Mon, 15 Mar 2021 04:12:51 GMT

Today, most of us use computers, phones, and tablets to send messages, check in with friends, carry out important financial transactions, watch TV and listen to music, and even to conduct business. Case in point? Odds are very good that you’re reading this post on a smartphone, tablet, or computer screen right now!

The more we all use technology in our everyday lives, the more digital assets we create. Have you ever thought about what might happen to your digital assets when you’re no longer around to manage them? What do you want to happen to your social media and email accounts? Who do you want having the log-in information for your online financial accounts? How will you ensure that your loved ones are able to download precious family photos and videos?

Just as it’s important to have a plan for your tangible property, real estate, and financial accounts, it is essential to consider what will happen to this ever-growing list of digital assets should you become incapacitated or pass way.

For this reason, it is crucial that you discuss a plan for your digital and hybrid assets with your estate planning attorney. A knowledgeable and savvy lawyer can assist you in identifying your most prominent digital assets, while also taking care to ensure that you maintain control over these important accounts and profiles after you’re gone — such as determining how these assets will be managed, and who will be able to access them.

Let’s dig into a few major FAQs about estate planning for digital assets:

“What Digital Assets Should Be Considered for Estate Planning Purposes?”

Today, nearly every facet of our day-to-day lives can be performed and managed online. As a result, a digital asset could refer to any number of things — ranging from media files to social networking accounts. You may also have some important estate planning assets that could be considered “hybrid” assets, such as an investment account that you generally access and manage online.

Curious what might fall into this broad and ever-expanding category? Here are a few of the common digital assets that you may already own:

Social media accounts
Email accounts
“Paperless” online banking and investment accounts
Online subscription accounts
Website domains
Cryptocurrencies (such as Bitcoin)
Digital photos, vidoes, and other files stored in the cloud or on Dropbox
Income-generating content published on the web (such as blog posts, written articles, or videos)
Digital copyrights and trademarks

If you do not make a plan for these assets, they could become incredibly difficult for your loved ones to access when you are gone. Issues like lost passwords, data encryption, and byzantine platform terms of service agreements can make accessing, closing, or transferring these common assets a nightmare.

“Does Michigan Have Any Laws Governing Access to a Decedent’s Digital Assets?”

Michigan is among the sizable group of states that has enacted a version of the Revised Uniform Fiduciary Digital Assets Act, which governs access to an individual’s digital assets when the account owner dies or becomes unable to manage them.

Enacted in 2016, Michigan’s Fiduciary Access to Digital Assets Act defines a digital asset as “an electronic record in which a user has a right or interest.” The person or company that “carries, maintains, processes, receives, or stores a digital asset of a user” is known as a digital custodian. This law provides for access to a decedent or protected individual’s digital assets by a fiduciary, such as a personal representative, trustee, conservator, or agent under power of attorney.

Broadly speaking, the Fiduciary Access to Digital Assets Act helps extend the power of a fiduciary to encompass the management of digital assets. While the act allows fiduciaries to manage digital property such as computer files, web domains, and cryptocurrencies, it largely restricts a fiduciary’s access to electronic communications unless the original user gives their fiduciary access through a will, trust, power of attorney, or other written mechanism. The act also specifies what information a fiduciary may need to present to a digital custodian in order to gain access to digital assets, as well the requirements and procedures for disclosure by a digital custodian.

If you are interested in how this act may affect you as a testator, personal representative, or trustee, do not hesitate to contact a shrewd and savvy estate planning attorney in your area. An estate planning lawyer can help you understand everything that goes into creating a functional estate plan that includes your digital assets.

If you are acting on behalf of an estate, an estates and probate attorney can provide informed professional advice to guide you through the legal process, explain your legal obligations as a fiduciary, and help you discharge your duties in an efficient and expedient manner to avoid personal liability.

“How Can I Make a Plan for My Digital Assets?”

So, what goes into addressing your digital assets within your comprehensive estate plan? Here are a few important steps to keep in mind as you move forward:

Inventory. One of the most important steps you can take is to thoughtfully and comprehensively list your digital assets. Create a list of online accounts and profiles that your loved ones need to know, as well as information for how to access them. Consider backing up cloud-based data on a physical hard drive, or using an online password manager to keep your records organized. Make sure your inventory is safely stored with your attorney or in a secure place — but take care to ensure that your fiduciaries will be able to access it when the time comes. Learn more about safeguarding your estate plan here.
Plan. Once you have gotten a handle on your digital assets, talk with your attorney about who you want to be able to have access, and what steps you want them to be able to take to manage, transfer, or close the accounts. For instance, you may want to have your social profiles deleted, or empower your fiduciary to change the passwords for your business accounts. Look into the terms of service and rules for the various online platforms you use, and consider looking into online tools that can streamline communication between your fiduciary and any digital custodians.
Execute. Work closely with your attorney to draw up will, trust, and power of attorney documents that thoughtfully address your estate’s digital needs. For instance, you may specify whether or not you want to grant your personal representative full or partial access to a specific account. An attorney can help assure that your language is clear, precise, actionable, and effective.

Have Any More Questions About Michigan Estate Planning and Probate? We Are Here For You

There is no reason to put off taking care of those you love and that which you have worked hard for.

Looking for guidance on the many moving pieces that go into successful estate and incapacity planning, including wills, trusts, powers of attorney, guardianship, and conservatorship? Your Michigan probate attorney Dean E. Patrick is here to help.

Mr. Patrick is a licensed Michigan lawyer specializing in estates and probate law. He has helped hundreds with their estate planning needs, giving him the necessary knowledge to provide unparalleled legal advice and assistance that can make your life a little easier.

If you have questions or are curious about how to move forward, contact our offices at (248) 663-2566 or reach out online to set up your initial consultation.

This post has been prepared for general information purposes only. The information you obtain here is not, nor is it intended to be, legal advice. You should consult an attorney for advice regarding your individual situation. We invite you to contact us and welcome your calls and electronic mail. Accessing the content of this site does not create an attorney-client relationship. Nor, does contacting us create an attorney-client relationship. Please do not send any confidential information to us until such time as an attorney-client relationship has been established.

What Is a No-Contest Clause in a Will or Trust?

Patrick & Associates, PLLC — Thu, 04 Mar 2021 05:47:59 GMT

Will and trust contests can often cause estate administration to drag on — while pitting family members against each other.

To minimize the likelihood of contests during probate, one action that you may take as part of your estate plan is to add a “no-contest clause” to your will and/or trust.

Also known as a “penalty clause,” “in terrorem clause,” or “terror clause,” this language is intended to deter beneficiaries from contesting the will — lest they lose their entire inheritance altogether.

Let’s explore the ins and outs of no-contest clauses in more depth:

What Is a No-Contest or Penalty Clause?

A no-contest clause is language inserted into a will or trust that is meant to discourage named beneficiaries from filing a contest or other proceeding against the validity of the will or trust. Broadly speaking, this clause generally states that any beneficiary who files a proceeding against the provisions of a will or trust will forfeit their right to receive any distribution at all from the estate.

These penalty clauses are often called “terror” clauses for that reason — because they are meant to strike true fear into the hearts of any disgruntled beneficiaries, and prevent them from taking action against the estate!

Below is a broad and general example of sample language that may be representative of a no-contest clause for a will, courtesy of the legal resources site NOLO. If you are considering implementing a no-contest clause to your will or trust, it is imperative that you consult with an experienced estate planning attorney in Michigan, who can help you understand the specific language that should be used based on your individual circumstances.

If any beneficiary under this will seeks to obtain in any proceeding in any court an adjudication that this will or any of its provisions is void, or seeks otherwise to void, nullify, or set aside this will or any of its provisions, then the right of that person to take any interest given to him or her by this will shall be determined as it would have been determined had such person predeceased the execution of this will without issue.

A no-contest clause may be worth considering if you are worried about a devisee or beneficiary contesting your will or trust. For instance, if you were to distribute your property in such a way that one child stood to inherit substantially more than his or her sibling, which could potentially be viewed as unfair, a penalty clause could be used to deter the sibling who inherited less from considering mounting a costly and time-consuming challenge.

With that said, there are limits to what a no-contest clause can achieve. Most importantly, penalty clauses are unenforceable if the court determines that “probable cause” for implementing proceedings exists (we will explore this in more depth below). What’s more, terror clauses are generally only applicable to named beneficiaries — meaning that omitted children, heirs, or other interested persons may still wish to pursue a contest. No-contest clauses may also fail to act as a deterrent against beneficiaries who receive so little from the estate that they feel as though they have nothing left to lose, so to speak.

While a no-contest clause can give your estate some protection, it is only one of many tools that you can use as part of your estate plan. It is important to discuss all of your options with a skilled and experienced Michigan attorney, who can help you create a comprehensive estate plan that takes appropriate steps to safeguard your assets, keep you in control, and ensure that you achieve all of your most pressing goals.

Will a No-Contest Clause Always Be Enforced?

Michigan law makes clear that a penalty clause in a will or trust is unenforceable “if probable cause exists” for instituting proceedings.

What does this mean? Broadly speaking, the court will determine if there is probable cause based on the specific circumstances and facts of the case. Michigan case law offers some clarity:

Probable cause exists when, at the time of instituting the proceeding, there was evidence that would lead a reasonable person, properly informed and advised, to conclude that there was a substantial likelihood that the challenge would be successful.

What Constitutes Probable Cause for a Will or Trust Contest?

Generally speaking, it is not enough to feel that the decedent was unfair in their choices. Instead, a will or trust challenge must be based on evidence. Typically, proceedings against the validity of a will or trust may be raised due to issues including:

Lack of Testamentary Intent or Capacity. In order for a will to be valid in Michigan, the testator must have sufficient mental capacity at the time of its creation.

Improper Execution or Revocation. An individual may have grounds to contest a will or trust if a significant mistake or error was made when the documents were being created. A will may also be contested and ultimately rendered invalid if it can be shown that there is another valid will or codicil executed on a later date, which would replace the terms of the earlier document.

Undue Influence or Duress. A contestant may have grounds for a dispute if they suspect that a will or trust was created under undue influence or duress — which might include physical abuse, threats of violence, blackmail, separating the decedent from their family, or even withholding food or medication.

Fraud, Forgery, or Misrepresentation. A contestant may have grounds if they believe that the testator or settlor was deliberately tricked into signing a document — for instance, if someone lied to the decedent, telling them they were signing another document instead of a will, or misrepresenting what the language in the document actually says. A contest on the grounds of forgery may apply if someone attempts to create documents under the testator’s name, or if signatures from witnesses have been falsified.

Get the Experienced Insight of a Michigan Estates and Probates Attorney

Whether you believe you have grounds to challenge the validity of a will or trust; you are put in the position of defending a decedent’s will or trust from contests; or you are interested in learning more about how to utilize no-contest clauses in your estate plan, it is important that you bring your questions to an experienced and knowledgeable local probates and estates attorney as quickly as possible.

The many steps involved with contesting or defending a will or trust in court can be complex and time-intensive. A lawyer skilled in probate litigation can help you understand all of your options and navigate through the probate courts with the guidance and advice your matter requires —from doing research and determining the validity of the contest, to filing all of the proper paperwork at the right time, to aggressively representing your interests in the courtroom should it become necessary.

Whether you are a spouse, child, beneficiary, creditor, or personal representative involved in a contested probate matter, you can rely on our firm to aggressively advocate for your position. Want to minimize the likelihood for family disagreements and contests when you’re gone? An estate planning attorney can ensure that you get answers to the questions you have concerning wills, trusts, and powers of attorney so that you can choose which tools are best suited for your individual circumstances.

About The Patrick & Associates, PLLC.

At The Patrick & Associates, PLLC., we put our legal experience and skills together with our commitment to excellence in representing your rights. You can depend on our law firm’s ability to listen to you and our talent for creative strategies. We will be flexible in order to accommodate your needs, and we work hard to discuss these difficult matters in terms that are easy to comprehend. With staff available 24 hours a day, we’re also never far from your questions and concerns.

If you have further questions or are looking for representation as you navigate no-contest clauses, will and trust disputes, or any other matter that forces you into Michigan’s tricky probate court system, we are here for you. Don’t hesitate to call our Southfield, Michigan office at (248) 663-2566 to set up your initial consultation. You may also click here to get in touch online.

7 Common Estate Planning Mistakes (and How to Avoid Them)

Patrick & Associates, PLLC — Mon, 01 Mar 2021 05:43:12 GMT

Estate planning is one of the most powerful and important steps you can take to prepare for the future — and it’s crucial to make sure that no critical step gets overlooked, forgotten, or misplaced along the way.

Unfortunately, many people end up committing one or mistakes or mishaps during the estate planning process, which could jeopardize or invalidate their entire plan — and end up making things a lot more difficult for themselves and their loved ones in the future.

Working with an experienced and professional estate planning attorney is one way to make sure you dot every “i” and cross every “t,” so that you can move forward with confidence. Here are seven all-too-common Michigan estate planning mistakes to discuss with your lawyer:

1.) Starting Too Late

The only things that go away with time are snowflakes, youth, and opportunities. With estate planning, you have an opportunity to plan for yourself and your loved ones — and it’s important that you don’t let it pass!

A 2020 poll cited by CNBC suggests that about 62% of Americans say that they do not have a will. A 2020 report from Caring.com, meanwhile, indicates that less than one-third of all Americans (32%) have any estate planning documents in place. What’s more, Caring.com data suggests that the number of older and middle-age adults with estate planning documents actually fell by 20% and 25% between 2019 and 2020.

When we pass on, the assets we have acquired throughout our lifetimes will remain, and they will be reallocated. The question is: Will you have a say in the matter?

If you do not have an estate plan in place, you are giving up control. If you do not make a plan, the state of Michigan will create one for you. Michigan’s rules of intestate succession are very strict, which could result in your assets being distributed in ways that you would not have wanted. Meanwhile, failing to make a plan could cause the estate administration process to be significantly longer, more costly, and more contentious for your surviving loved ones.

2.) Forgetting to Plan for Probate and Estate Administration

Probate is often used as a catch-all term to refer to the legal process a decedent’s estate must succumb to in the courts. Here in Michigan, the ins and outs of the estate administration process can be complex, costly, and time-intensive — particularly if a will contest or similar issue arises after your passing.

Fortunately, there are many important steps you can take proactively, to help ensure that you have made probate as smooth and simple as possible for your loved ones. For instance, you can utilize a number of different mechanisms to transfer many of your most important and valuable assets outside of probate, including:

Trusts. Trusts offer numerous estate planning advantages, including the capability to help many types of assets — such as investments and securities, tangible personal property, bank accounts, business interests, and real estate — bypass probate. The inter-vivos or revocable living trust is one of the most popular types of trusts in the United States, in part because it can help avoid probate and help families avoid court fees and stringent oversight. Learn more about using trusts as part of your estate plan here.

Beneficiary Designations. Retirement accounts, life insurance policies, bank accounts, annuities, pension plans, investment accounts, and securities can be set up with a designated beneficiary, known as a “pay on death” or “transfer on death” beneficiary. When executed properly, this designation allows for the assets in an account or proceeds of a policy to transfer directly to the named beneficiaries upon the death of the account owner or policy holder, outside of probate.

Jointly Owned Assets. Full ownership of real property owned through joint tenancy with rights of survivorship automatically transfers to the surviving co-owner upon the passing of the decedent, outside of the oversight of the probate courts. Property that is owned by married couples who share ownership as tenants by the entireties also transfers outside of probate. Joint tenancy designations can allow you to avoid probate without increasing your liability. Learn more about joint tenancy and tenancy by the entireties here.

Taking steps to help assets avoid probate can have numerous positive benefits for yourself, your estate, and your family and friends, including:

Peace of mind knowing you minimized the stress of your circumstances for your family
Assurance that your partner will the assets and control you want them to have
Allowing for immediate distribution of your assets
Maximizing the assets available to your beneficiaries when you have passed
Minimizing or eliminating the cost of probate fees

An experienced legal professional can help you coordinate the use of probate and nonprobate transfers as part of your estate plan.

3.) Failing to Properly Fund Your Revocable Living Trust

Funding a trust is just as important as creating it in the first place. Too often, though, people overlook this important step!

Once you have set up your trust, it is very important to re-title your chosen assets into the trust, or this incredibly useful mechanism will remain an empty vessel. Remember that assets not properly titled into the name of your living trust will be subject to probate as part of your estate.

An expert in estate planning and trust law like our own Dean E. Patrick can not only assist you with the creation of the trust, but also ensure that all legal formalities are addressed so that your trust is completed to your specifications. In addition to selecting and re-titling the assets you want to place into your trust, this might also include naming a successor trustee to assume responsibility for managing and distributing trust assets when you are no longer able to do so.

4.) Not Planning Ahead for Incapacity

While it is never pleasant to think about, the reality is that no one is immune from suffering an accident or falling victim to an unexpected illness. An important part of estate planning that many people forget about is making plans for incapacity, including naming the person you want making decisions for you when you are unable to do so for yourself.

If you do not take precautions when you have the chance, your loved ones could be subject to the arduous and costly process of living probate.

Even if you do not have many high value assets, it is important to plan ahead for the possibility of incapacity; the experiences of 2020 are a painful reminder of that fact. One of the most important steps you can take to prepare for incapacity is to utilize durable powers of attorney.

A durable power of attorney is a legal document that gives someone of your choice (known as your agent, advocate, or attorney-in-fact) the right to handle your decisions if you become incapacitated. With a durable power of attorney, you don’t give up any control as long as you are capable. In Michigan, you can name a power of attorney for health care, a power of attorney for mental health, and a power of attorney for financial matters.

5.) Forgetting to Review or Update Your Plan Over Time

The only constant in life is change. For this reason, it is important to remember that creating an estate plan is not a one-time, “set it and forget it” process. Instead, it is crucial to regularly reevaluate and, if needed, update or revise your estate plan over time.

The reality is that no one knows for sure what’s in store for the future. Your named beneficiaries might predecease you; you could go through a divorce or estrangement that changes your personal relationships with your family members; you might move to a new state, acquire valuable new assets, or make new investments. Things outside of your control with estate planning implications might change over time, as well, such as state and federal tax laws.

Depending on your circumstances, there are many steps you can take to stay on top of things, including:

Regularly reviewing your beneficiary designations
Naming contingent beneficiaries
Reviewing your will and trust paperwork and replacing documents, as needed
Reviewing your powers of attorney
Reviewing your guardianship, conservatorship nominations

A knowledgeable local attorney can make sure to keep things on track. A legal professional can help you to set a schedule to revisit your estate plan, while considering all the unique variables of your situation. When it’s necessary to make changes, an attorney’s shrewd guidance can help you to ensure that you update or replace your documents correctly, to make sure that things are as clear and direct as possible for your personal representative and trustee in the future.

6.) Failing to Plan for Minors or Beneficiaries WIth Disabilities

It is natural to want to make sure your loved ones are well cared-for when you are no longer around. But do you have a specific plan to make it happen? Estate planning is a powerful way to provide for the people who matter most to you. But it is important to be thorough and thoughtful, especially if you are planning ahead for minor children or adult beneficiaries who happen to be physically or mentally disabled.

One of the most important considerations when creating a will is nominating a guardian, who will become responsible for the care and custody of your minor children when you are no longer around. An attorney can help you consider your options and make the best selection for your circumstances.

Meanwhile, you can utilize your estate plan to help make sure your loved ones receive crucial assets and funds — while making sure that inheritance is not detrimental to your beneficiaries down the line. For instance, you can utilize trust provisions to help ensure that funds meant for your minor children are not squandered by a guardian, or that children are not able to access funds until a certain date. Similarly, a trust can help you provide for your loved ones with special needs, particularly if they are receiving government benefits that might be affected by receiving an inheritance. You can also include spendthrift provisions, to help prevent beneficiaries from wasting their trust assets from excessive spending.

7.) Not Working With an Experienced Professional

As we often say: When you have a foot problem, you go to the podiatrist. When you have a heart problem, you go to the cardiologist. When you are forced into the probate court or want to create a comprehensive estate plan that will take care of your assets and provide for your loved ones, you need to go to an established probate and estate planning attorney.

An attorney is uniquely qualified and capable to help you consider your specialized circumstances, and create the estate plan that will best suit your goals. A knowledgeable legal professional can help you understand how all of the important pieces of an estate plan may work together, while also getting a handle on the financial and tax implications of estate planning and inheritance, and how they might apply in your situation. As you create estate planning documents, an attorney can help ensure that the language is clear and concise, and that every formality is executed fully and properly — so that you can get some well-deserved peace of mind.

Have Any More Questions About Michigan Estate Planning?

At the Law Office of Dean E. Patrick, our goal is to provide you with only the best professional legal services available in Michigan. Work with us and you have our sincere promise to carefully plan and manage each and every step of your legal matter from start to finish.

When it is time to take care of your estate planning needs, get the answers, insight, and guidance you and your beneficiaries deserve. Whether you are trying to avoid probate with a trust, want to make sure your assets are protected and transferred according to your wishes, or want to plan for incapacity with powers of attorney, we can custom tailor a solution to suit your needs.

If you have questions or are curious about how to move forward, contact our offices at (248) 663-2566 or reach out online to set up your initial consultation.

Updating Your Estate Plan After a Divorce

Patrick & Associates, PLLC — Mon, 22 Feb 2021 05:31:31 GMT

Whatever stage of life’s journey you may currently be facing, estate planning is one of the most important ways to prepare for whatever the future may hold. An estate plan can empower you to keep control of your most important assets, and have a say in the matters that will directly impact you and the people you care about.

However, it’s important to remember that crafting your estate plan is not a one-time, “set-it-and-forget-it” proposition. You should regularly review and consider updating your estate planning documents — particularly in the face of a major life event, such as a marriage or divorce.

For Michigan families, divorce can be a particularly challenging situation, with many moving parts to address. In the shuffle, it is important to take some time to review your estate plan and execute new documents as needed — so that you can maintain control over the assets and decisions that matter most to you.

What Goes Into Estate Planning?

Over the course of a lifetime, we all acquire assets. When we pass on, those assets remain and they will be reallocated. The question is: will you have a say in the matter?

Estate planning is the process that gives you a say. If you become incapacitated, and even when you’re gone, estate planning keeps you in control.

Thoughtful and comprehensive estate planning can help make a difficult transition much easier for your loved ones. It can help ensure the swift distribution of your assets in a manner appropriate for your circumstances, minimize the potential for conflicts among your family members, and minimize or even eliminate the financial and time costs involved with probate.

There are a variety of estate planning tools that you can put in place to help ensure that you keep control even when you are unable to speak on your own behalf. The specific instruments that you may use will depend on the specifics of your circumstances. Some of the most important estate planning mechanisms to keep in mind include:

Wills: A will is a valuable estate planning tool that allows you to plan for the distribution of your estate and nominate someone you trust to handle your affairs in the probate court as your personal representative. If you do not take advantage of your ability to determine how your properties and assets will be handled in the event of your passing, the state will make these decisions for you.
Trusts: A trust is a written agreement created by a settlor or grantor that names an individual (known as the trustee) who is responsible for managing property as directed by the trust agreement. From an estate planning perspective, trusts can be used to direct the distribution of your property, help protect your estate from certain taxes and fees, and minimize the potential for lengthy probate issues.
Powers of Attorney: A power of attorney is a writing that gives legal authority to a third party (known as the agent) to act on the behalf of someone else (the principal). In estate planning, these tools are used to ensure someone you trust manages your financial and health care decisions when you can no longer do so on your own. For estate planning purposes, it is imperative that the power of attorney used can be classified as a “durable” power of attorney. In short, this classification allows your agent to act even if you become incapacitated.
Beneficiary Designations: Retirement accounts, life insurance policies, bank accounts, annuities, pension plans, investment accounts, and securities can be set up with a designated beneficiary, known as a “pay on death” or “transfer on death” beneficiary. When executed properly, this designation allows for the assets in an account or proceeds of a policy to transfer directly to the named beneficiaries upon the death of the account owner or policy holder, outside of probate.

Updating Your Estate Plan After a Divorce

Divorce will necessarily involve extricating your lifestyle and finances from those of your former spouse. This might include dividing up assets, as well as determining a plan for child custody and calculating child support and alimony payments.

Many people get started with estate planning after they get married, and set up their plan with the assumption that many of their valuable assets — and much of the decision-making power and responsibility — will go to their spouse. While Michigan’s probate law does build in some protections regarding the revocation of probate and nonprobate transfers after a divorce, it is still important to be proactive and take steps to ensure that your wishes will be carried out — and that your estate plan clearly and accurately reflects your most up-to-date goals.Taking time to clear up confusion or uncertainty now could make a significant difference during estate administration in the future.

During and after your divorce, it is important to consult with a knowledgeable local estate planning and probate attorney to discuss the best course of action based on your circumstances. Some important steps to take from an estate planning perspective include:

Revoking your current will and creating a new one

The Michigan statutory will notice puts it bluntly:

“You may make and sign a new will at any time. If you marry or divorce after you sign this will, you should make and sign a new will.”

Following a divorce, you will most likely want to update your will. This may include nominating a new personal representative and changing who you want to inherit certain assets.

The most effective way to amend your will is to work with an experienced estate planning attorney to revoke your current will and create an entirely new document that better reflects your current circumstances.

Reviewing and updating your trust documents.

The period after a divorce is an important time to review your trust documents.

If you have a revocable living trust, one common formality is that you will generally name yourself as the primary trustee, with a successor trustee named who will manage the trust when you pass away or become incapacitated. If your spouse is your successor trustee, it is important to name a new one.

You may also want to use this time to review and update the beneficiaries of your revocable trusts, if any of your personal relationships have changed as a result of your divorce. This might also be an opportune time to set up a new trust that better reflects your goals — for instance, establishing a trust for the protection of your minor children’s funds which an ex-spouse cannot access.

A knowledgeable trust and estates attorney can help you understand all your options and take the appropriate action for your situation.

Reviewing and updating your powers of attorney.

There are several types of power of attorney designations you may utilize as part of your estate plan, including a power of attorney for financial matters and a power of attorney for health care.

With a durable financial power of attorney, you can provide someone that you trust with the right to handle your financial affairs if you become incapacitated. A durable power of attorney for health care gives your chosen agent or advocate the ability to handle your health care decisions if you become incapacitated..

With each type of power of attorney, you do not give up control of your affairs while you still have the capability to manage them — but can sleep better knowing you have a plan in place in case you do not.

If you currently have documents in place that give your ex-spouse authority over your decision-making, an attorney can help you revoke your existing powers of attorney and create new documents. This is particularly important if you do not already have a successor agent named.

An attorney can help you weigh all of your options as you think about who to name as your new agent or advocate, while also helping you take care to ensure that your chosen agent will receive only the powers that you want them to have.

Updating your beneficiary designations

One of the most effective ways to set up a nonprobate transfer is to designate a beneficiary on certain assets, including life insurance policies, retirement accounts, bank accounts, and brokerage accounts. When you divorce or your personal circumstances change, it is important to work with the institution to update your beneficiary designations. Broadly speaking, if your former spouse is still named beneficiary on an account they will stand to inherit unless you take action to replace them. Do not assume that the financial institution will make changes for you, and be ready to act swiftly.

Start the Conversation with Metro Detroit’s Probate and Estate Planning Attorneys

Interested in learning more about estate planning and probate in Michigan? Ready to start preparing for the future, and make sure that you always have a say in what happens to your most important assets — and the people who matter most?

For all these important matters and more, it’s wise to have an intelligent and experienced lawyer at your side, fighting for your rights and the well-being of your loved ones. That’s where our attorney Dean E. Patrick comes in.

You can depend on our law firm’s ability to listen to you and our talent for creative strategies as we help you prepare your estate plan and navigate complicated probate matters.

Whenever you’re ready to get started, Mr. Patrick is here to listen and learn more about your circumstances, and start finding a solution to your desired outcome – with the expertise, empathy, intellect, and professionalism your situation requires at every step of the way.

Have any more questions regarding any estate planning or administration matters you may have? Ready to get started? Contact Dean E. Patrick at his Southfield office at (248) 663-2566 or click here to arrange your initial consultation. Our staff is available 24/7 to answer any questions and help you with your legal matters.

Organizing and Safeguarding Your Estate Plan

Patrick & Associates, PLLC — Tue, 02 Feb 2021 05:48:55 GMT

Estate planning is one of the most important steps you can take to prepare for the future and protect your family, even when you’re gone. This process involves using a variety of tools — including wills, trusts, and powers of attorney — to help ensure that you can maintain control even when you are unable to speak on your own behalf. The instruments you may use will depend on the specifics of your circumstances.

So, once you’ve worked with a local estate planning attorney to consider your circumstances and create your will, trust, and power of attorney documents — what comes next? One important thing to consider is how you will safeguard, protect, and share the paperwork associated with your estate plan.

It is incredibly important that you preserve this information, and keep your documents safe from displacement, damage, or theft. At the same time, it’s crucial that you create a plan for how your family or trusted advisors will be able to access these documents when you are unable to communicate for yourself.

The consequences of not properly storing your estate plan could be severe. Ultimately, if your documents cannot be located following your death, there may be a presumption that you did not have a will or trust in place. This could result in your estate being handled through Michigan’s intestate succession process — which means that your assets would be distributed according to state law, rather than at your direction. This could also lead to bitter conflicts and division among family members, and make an uncertain time even more difficult.

Fortunately, there are many key steps you can take to organize, protect, and safeguard your estate plan while you still have the chance. Here are some important ideas to keep in mind:

Consult with your attorney

Working with an estate planning attorney can help you understand all of the tools and techniques available based on your unique circumstances. An experienced attorney can help you make sure that the distribution of your assets will be in a manner appropriate for your situations; that you will be able to protect your beneficiaries from many different complications, and that someone you can rely on will be appointed to handle your assets and affairs.

An estate planning attorney can also lend their expertise and insight to the many other matters involved in this process, including offering recommendations and advice for how to keep your planning documents organized and safe.

Talk with your attorney to see if they can store your files in their office or through a secure digital system. Your attorney may also be able to offer guidance and recommendations for trustworthy service providers in your area, while also lending some perspective on how to communicate about your estate plan with people in your life. Moving forward, your attorney can also help you to confidently and effectively maintain and update your estate plan over time.

Store your paperwork safely and securely

You may wish to keep things more private or give yourself peace of mind by keeping your documents close at hand. If you ultimately decide to keep the original versions of your estate planning documents with you, it’s important to find a reliable place that is secure from fire, theft, water damage, and so on.

Some ideas to consider might include:

Safety deposit box. Safety deposit boxes are very secure, but they can be hard to access after you’re gone. This can create a tricky situation — particularly since, quite often, the documents that a personal representative or trustee must use to access the box are contained in the box themselves! If you go this route, it is important to plan ahead for this eventuality. You may wish to consider making a personal representative, trustee, child, or spouse, a joint holder on the safety deposit box, so they can access it easily.
Fire-proof Safe. A safe is a reliable option for storing valuable documents. One potential downside is that it could be taken in a robbery, unless it is secured to the wall or floor. More importantly, it is crucial to make sure that you know the password, and that you find a secure way to share it with relevant, trustworthy parties so that they can access the contents when the time comes.
Locked file cabinet or desk drawer. As with a safe, make sure you keep the keys on hand, or let trusted individuals know the passcode needed to get into the cabinet drawers.
Virtual storage solutions. There are more ways than ever to store files digitally — from cloud-based platforms such as DropBox, to simple portable USB devices and external hard drives. An experienced attorney can help you weigh all of the different options available, to see if any may work for you.

Meanwhile, as the financial information site The Balance notes, it is important to “resist the temptation to ‘hide’ your will:”

People have been known to place their estate planning documents under mattresses, inside books, and even wrapped in plastic in the refrigerator. If no one can find your will during your lifetime, it’s not likely they’re going to be able to do so after your death either.

It is important that you tell your personal representative, agent, and/or successor trustee where they can access the relevant documents; you may also consider giving them hard copies, so they have something on hand in case of an emergency.

Discuss with your attorney the best way to make copies of your documents, and how you should distribute them to the relevant parties. Make sure you create new copies and destroy the old ones every time you update or amend your estate plan, in order to avoid any confusion that could arise from having multiple versions of the same documents. Keep relevant information bundled together — for instance, you may wish to keep copies of your medical records, insurance information, recent bank account statements, and marriage certificates in with your estate planning files.

Be sure to carefully consider who should — or should not — be given copies. For instance, if you are not treating all of your children the same way in your will, it may be unwise to give copies to all members of your family. If you are concerned about family members prying into your finances, it may be best to only provide copies to your attorney and your successor trustee or personal representative.

While you have the opportunity, be sure to discuss matters with your personal representative, agent, or successor trustee. Make sure they are willing to serve, and that they will be up to the task when called upon.

Remember to keep your estate planning documents up-to-date

Remember that estate planning is a dynamic process, not a one-time “set it and forget it” event. It may be necessary to update your estate planning documents when your personal circumstances change over time (e.g., you experience a marriage or divorce, or face the death of a loved one named in your will or trust), or if your personal relationships develop in unexpected ways (for instance, you could have a falling out with a son or daughter, or reconcile with an estranged sibling).

Make time to review your documents with your legal professional on a regular basis, to make sure that all of your estate planning documents are still functional and reflective of your wishes.

When revising or updating estate planning documents, keep security and organization in mind. Work with your attorney to completely replace your old documents, rather than making changes by hand — as this can create lots of confusion and uncertainty.

Get Answers From Trusted Michigan Estate Planning Attorneys

When it is time to take care of your estate planning needs, get the answers, insight, and guidance you and your beneficiaries deserve. Whether you are trying to avoid probate with a trust, want to make sure your assets are protected and transferred according to your wishes, or want to plan for incapacity with powers of attorney, our attorneys can help you custom tailor a solution to suit your needs.

Dean E. Patrick is a licensed Michigan lawyer specializing in estates and probate law. He has helped hundreds with their estate planning needs, giving him the necessary knowledge to provide unparalleled legal advice and assistance that can make your life a little easier.

If you have questions or are curious about how to move forward, our staff is available 24/7 to help you with your legal matters. Contact our offices at (248) 663-2566 or reach out online to set up your initial consultation.

How to Provide for Someone with Special Needs as Part of Your Estate Plan

Patrick & Associates, PLLC — Sun, 24 Jan 2021 05:39:50 GMT

If you are the parent or sibling of a loved one with special needs, you know the importance of making sure they’re protected and able to enjoy the best possible quality of life. These crucial and meaningful goals should also be considered as part of your estate plan.

A writing from the Special Needs Alliance sums it up effectively:

While planning considerations for such a child will vary depending upon the child’s age, competency, and other family considerations, the goal is always the same: parents want their estates utilized to enhance and enrich the life of their special needs child while maintaining the child’s enrollment in essential public benefits programs.

Let’s explore some of the important considerations to discuss with your estate planning attorney as you seek to provide for your loved one who has special needs, including guardianships, conservatorships, and specialized trusts:

Guardianships and Conservatorships

If your child currently has a guardianship or conservatorship in place, it is important to review those arrangements. In particular, if you are currently serving in the role of guardian or conservator to a person with special needs, it is important to plan ahead, and take steps to ensure that someone of your choosing will be in a position to succeed you when you are unable to serve.

Guardianship

A guardianship may be established when an individual cannot make or communicate informed general care decisions for themselves. In such circumstances, a guardian would act as a substitute decision maker for the individual (known as the “ward.”)

Broadly speaking, a guardian is responsible for providing for the general well-being and care of their ward. Depending on the specific needs of the ward, a guardian’s powers can be quite broad or fairly limited. Michigan law is designed to “encourage the development of maximum self-reliance and independence in the individual,” and allows for guardianships to be closely tailored to each individual’s unique situation.

Generally. depending on the powers granted by the court, a guardian is responsible for the individual’s care and comfort, including providing suitable food, clothing, and shelter; applying for and obtaining services on their behalf; and authorizing or refusing medical treatments.

As Michigan’s Handbook for Guardians of Adults explains, if you are currently serving as guardian for your child of any age, “you may in your will nominate a successor guardian,” who would “take over the guardianship when you die.” This may also be accomplished through another writing signed by the parent and attested by at least two witnesses.The individual in question or another interested person would have the opportunity to object to the appointment of the successor guardian in court.

Conservatorship

A conservator is appointed by the court to manage a protected individual’s estate and finances. Conservatorships are established when an individual can no longer effectively manage his or her own property and financial decisions, generally due to conditions including “mental illness, mental deficiency, physical illness or disability, chronic use of drugs, chronic intoxication, confinement, detention by a foreign power, or disappearance.” For a conservator to be appointed, the court must also find that

the individual has property that will be wasted or dissipated unless proper management is provided, or money is needed for the individual’s support, care, and welfare or for those entitled to the individual’s support, and that protection is necessary to obtain or provide money.

Whereas a guardian is broadly responsible for making medical, housing, and other personal decisions about the person, the conservator is responsible for the care and preservation of all the individual’s assets and property. The same individual can be appointed to serve as guardian and conservator, or these roles can be delegated to two different parties.

Conservatorships are important to consider as you begin the process of estate planning. Generally speaking, “a parent of the protected individual or a person nominated by the will of a deceased parent” has high priority to be appointed as conservator if necessary, behind only

A conservator, guardian of property, or similar fiduciary appointed or recognized by the appropriate court of another jurisdiction in which the protected individual resides
An individual or corporation nominated by the protected individual if he or she is 14 years of age or older and of sufficient mental capacity to make an intelligent choice, including a nomination made in a durable power of attorney.
The protected individual’s spouse
An adult child of the protected individual

Whether you are considering who to appoint as a successor guardian or conservator, or you are considering whether creating a guardianship or conservatorship will be necessary when you are no longer around, it is important to get guidance and insights from an experienced local probate attorney.

Guardianship and conservatorship matters are highly emotional, and the rules surrounding these proceedings can be confusing and difficult to parse. There are many steps that one has to take — and it is unwise to go into them without an intelligent and experienced lawyer at your side, fighting for your rights and the well-being of others.

Supplemental (Special) Needs Trust

A trust is a written agreement created by a settlor or grantor, which names an individual who is responsible for managing property transferred into the trust as directed by the trust agreement. Trusts are frequently used in Michigan to supplement estate plans, and can help avoid lengthy probate issues. With that said, it is important to note that there are several different types of trusts that suit different needs — including providing for your loved ones with special needs.

To help illustrate this, let’s consider a (fictional) married couple, Al and Michelle. Al and Michelle have a disabled child, Larry, who is receiving government benefits.

Unaware of the interaction between inheritance and government benefits, Al and Michelle create a simple will that distributes their assets equally among their two children, Larry and his brother Ronald. Michelle and Al eventually pass away within days of each other.

A subject of the probate process, Larry, now without his parents to care for him, receives a letter from the State of Michigan. Without compassion for his situation, the letter reads that the state will be making a claim against his inheritance for the past governmental benefits he had received.

This situation is more common than you might think — and could likely have been avoided with a supplemental (special) needs trust established for Larry’s benefit.

A supplemental (special) needs trust is designed to help your future beneficiaries who happen to be physically, mentally, or developmentally disabled and who are receiving — or are likely to receive — government benefits, such as Supplemental Security Income (SSI).

The structure of a special needs trust helps provide for the continuing care and maintaining quality of life for your loved ones with a disability, while increasing the probability that an inheritance will not disrupt their government benefits.

It is imperative that you create the trust and not leave it to your heirs to do so. These specialized trust structures can be set up through a revocable living trust while you are still alive, or incorporated into your will as an irrevocable testamentary trust.

Trusts are a popular estate planning tool, but it is often essential to receive guidance from an experienced, skillful, and knowledgeable attorney in order to ensure that they are properly established and maintained. You should not hesitate in contacting a professional and shrewd trust attorney, who can help you to assess your estate, find the right type of trust for your needs and goals, and gain a better understanding of the benefits that might result from establishing a trust — particularly if you have a loved one who receives or is likely to receive government benefits in the future.

Keep the Discussion Going with Michigan’s Probate Attorneys

Interested in learning more about the ins and outs of guardianships, conservatorships, and trusts in Michigan? Ready to start making plans for your future, tailored to the specifics of your unique circumstances?

Our skilled law firm is here and ready to assist with all of your estate planning and probate needs, including all of the specialized steps you may wish to consider to provide for and protect your loved ones who happen to be physically, mentally, or developmentally disabled.

If you require further legal advice or if you are looking for representation as you move forward with your estate planning goals, don’t hesitate to call our Southfield, Michigan office at (248) 663-2566 to set up your initial consultation. You may also click here to get in touch online.

At The estate planning attorneys at Patrick & Associates, PLLC, will work hard to accomplish your goals, while handling your matter with professionalism and expertise. Mr. Patrick and his team can help you navigate through all the legalities and formalities, so that you can rest assured that you and your loved ones will be taken care of, whatever life brings.

When to Consider Choosing a Professional Fiduciary

Patrick & Associates, PLLC — Tue, 19 Jan 2021 01:33:33 GMT

Setting up your estate plan isn’t always a pleasant thing to think about; however, it’s a very important step to take when you have the opportunity.

Often, taking time to plan for what will happen to the people who matter most and the assets you’ve spent a lifetime acquiring will include considering who you will entrust with important responsibilities when you are gone or unable to communicate on your own behalf — such as naming who you want to oversee the administration of your estate and any trusts, or who you want making your financial and healthcare decisions as a conservator or agent.

These are important decisions, which should not be taken lightly. There are a lot of important factors to weigh as you consider who to name as your personal representative, trustee, agent, or conservator — including whether or not you should consider choosing a trusted friend or family member or a professional fiduciary to act on your behalf.

What Is a Fiduciary? What Does It Mean for Your Michigan Estate Plan?

Black’s Law Dictionary defines a fiduciary as a person “invested with rights and powers to be exercised for the benefit of another person.” Generally, a fiduciary is entrusted with the care of property or funds, and is required to act with “scrupulous good faith and candor.”

In essence, a fiduciary is obligated to put the needs of the estate or person they are representing above their own. Under Michigan’s Estates and Protected Individuals Code, this includes acting with undivided loyalty; impartiality between heirs, devisees, and beneficiaries; and care and prudence in all actions. A fiduciary must also commit to the segregation of assets held in the fiduciary capacity, and abide by Michigan’s prudent investor rule when applicable.

As it applies to estate planning and probate law, a “fiduciary” might refer to one of any number of important roles, including but not limited to:

Personal Representative. This is the person tasked with guiding your estate through the probate courts, following any directions set down by your will. Their duties might typically include collecting, inventorying, managing, and protecting estate assets; handling creditors and resolving debts of the estate; providing regular reports and accountings; making distributions; and closing the estate.
Conservator. A conservator is a person appointed by a court to manage a protected individual’s estate and finances. Conservatorships are established when an individual can no longer effectively manage his or her own property and financial decisions. An individual can request the appointment of a conservator for themselves, if they recognize that they are unable to manage their property and affairs effectively due to age or physical infirmity.
Trustee. A trustee is the person responsible for managing and distributing any of the assets held in a trust, while also handling several important duties that may arise during the course of trust administration — including overseeing tax filings for the trust and communicating with beneficiaries of the trust. Generally, with a revocable living trust, the person who creates the trust (known as the settlor or grantor), will name themselves as trustee in order to maintain control of their assets for as long as possible, with a successor trustee in place to take over in the event that they can no longer perform the responsibilities for themselves.
Agent, advocate, or attorney-in-fact. A power of attorney (POA) is a written instrument that gives legal authority to a third party (known as the agent orattorney-in-fact) to act on the behalf of someone else (known as the principal). In estate planning, the durable power of attorney is a tool that can be used to ensure that someone you trust manages your financial and health care decisions when you can no longer do so. With powers of attorney, you can exert a great deal of control over your chosen agent, granting them broad power to make decisions on your behalf, or limiting their scope to only a few pressing matters.

Choosing a Personal Representative, Trustee, Conservator, or Agent

The individuals nominated to handle your financial and personal decisions will have a real and significant responsibility — and it is important to have someone in place who you trust fully to handle this obligation.

Often, if you’re married, your spouse is a common first choice to be your personal representative or agent. If you are not married, children or close family are often chosen to handle the responsibility.

Whomever you choose, it’s important to look for a fiduciary who can fulfill their duties efficiently and effectively. Important attributes for a good candidate include:

Trustworthiness
Previous experience making decisions similar to those they will be faced with
Being easy to communicate with, as necessary
Fiscally responsible, so as to handle your financial affairs appropriately
Living in close proximity to the probate court (depending on the goals of your will)
Being willing and able to serve.
Being willing to abide by the wishes and directions that you set forth in your trust, will, or other estate planning documents

What is most important is that the people you select are the best choices for your individual circumstances. This process is not about making people feel equal; it is about ensuring that your wishes will be followed when you no longer have a say in the matter.

When Might You Choose a Professional Fiduciary?

There are also many situations in which people can’t or do not want to rely on family and friends. Perhaps you have a particularly complex estate, and don’t want to burden your loved ones with the responsibility of seeing it through probate. Maybe you do not have strong relationships with your children, or do not have any nearby family members who would be willing or able to serve.

For those who can’t or won’t rely on family and friends, professional fiduciaries are an option worth discussing with your estate planning and probate attorney.

Opting for a professional to serve as personal representative, trustee, agent, or conservator may be a prudent consideration in situations where you hope to:

Simplify Things for Your Loved Ones

Losing a loved one is never easy — and it becomes even more difficult when faced with pressing and intricate legal matters at the same time. Estate and trust administration are not always simple and straightforward, and may become burdensome for your loved ones in an already difficult time. Having a trustworthy professional step in can help take some of the responsibilities off of their plate, allowing your loved ones to focus on moving forward, while also making sure your financial and personal matters get the time and attention they truly deserve.

Minimize the Risk for Family Conflicts

Estate and probate issues can often dredge up old arguments, or create bitter new conflicts among family members. This is a moment when tensions run high. In some cases, choosing one child over another to serve might lead to bitter disputes or lifelong disagreements. Similarly, if you choose two different people to serve as co-agents or co-trustees, they may disagree over key decisions — which could potentially cause the situation to drag out and become even more complex. Having a trusted and experienced professional fiduciary can help make sure that your affairs are handled in line with your wishes and directions, while leaving less room for family divisions.

Ensure That Matters Are Handled With Impartiality and Expertise

Compared with friends or family members who may have a personal, emotional, or financial investment in your affairs, a professional fiduciary can truly act with objectivity and impartiality — assuring that the actions that they take will be in the best interests of you and your estate, while minimizing the likelihood for harmful mistakes or errors.

A professional fiduciary will have training, experience, and expertise that may help make handling your financial affairs smoother and simpler, particularly when it comes to complex or unexpected obstacles that arise. At the same time, they will likely know how to communicate about these matters efficiently and effectively, giving your loved ones a steady and reliable resource that they can turn to with questions or concerns.

Maintain Control

What happens if the person who you nominated to serve as a personal representative or conservator predeceases you, or is otherwise unable to accept the responsibilities? In such circumstances, the court would then turn to other relatives, following a set order of priority. Ultimately, this could result in someone that you do not want assuming substantial control over your affairs.

Naming a professional firm helps minimize the risk of you having to give up control down the line. Similarly, it is extremely common for personal representatives and other fiduciaries to hire attorneys, financial professionals, or other experts to assist with their duties; appointing a professional may help ensure that someone you trust will be able to continue acting on behalf of yourself or your estate.

Get the Answers You’ve Been Searching for from Michigan’s Probate Experts

If you want to ensure your final wishes are carried out, legal help from our experienced probate and estates attorney Dean E. Patrick can make it happen. Getting guidance from an attorney is the first step in making sure your possessions and the people you care about are taken care of when you’re gone.

In addition to offering probate and estate planning guidance tailored to your unique circumstances, our firm can offer fiduciary services, including but not limited to:

Professional Trustee
Professional Conservator
Professional Agent

Whether you have decided it’s time to plan for your family’s future or you have any probate-related issue that has interrupted your life, you and your family can rest assured knowing that our office is handling your matter with the professionalism and expertise it deserves.

Our meeting schedules are flexible in order to accommodate your needs, and we work hard to discuss these difficult matters in terms that are easy to comprehend. Our office is conveniently located in Southfield, Michigan and our staff is available 24 hours a day, 7 days a week to receive phone calls and help you with your legal matters. Do not hesitate to give us a call at (248) 663-2566, or click here to arrange your initial consultation.

Can You Disinherit an Adult Child in Michigan?

Patrick & Associates, PLLC — Mon, 11 Jan 2021 01:23:25 GMT

When you pass away, what will happen to the assets you’ve spent a lifetime acquiring? Developing an estate plan is a process that keeps you in control if you become incapacitated, and even when you’re gone. For some people, this may mean taking action to deliberately exclude or disinherit certain individuals from their wills or trusts — including their own adult children.

It is certainly possible to disinherit a child from your will — provided that the will maker (known as the testator) takes care to use the correct mechanisms and follow all proper legal procedures at every step of the way. With that being said, this is not a decision to be made lightly, and it is one that could ultimately be challenged in court depending on the specifics of your circumstances. Similarly, if you are not careful and deliberate about your actions, the very people you are seeking to exclude may still stand to receive some of your estate through Michigan’s laws of intestate succession or through exempt property rights.

Why Would Someone Disinherit a Child in Michigan?

Everyone’s circumstances are different, and there are any number of personal reasons why someone may choose to disinherit a child from their will.

In some cases, it could be due to a poor personal relationship. The simple reality is that family members become estranged all the time, for any number of different reasons — whether because the parent and child have a contentious or difficult relationship, or because the child has deliberately isolated themselves from their family.

As Nathan R. Piwowarski once put it succinctly in an article for the Michigan Bar Journal, there may also be practical reasons to disinherit a child:

The child may have severe debts or problems with creditors, which could immediately impact any funds or property they receive
The child may have mental illness or addiction, and a distribution could be used to “fund self-destructive behaviors”
You may have already taken action to provide substantially for your child (or children) outside of probate — perhaps through beneficiary designations, trusts, or lifetime gifts
The child may be physically, mentally, or developmentally disabled and receiving government benefits; in such a situation, receiving an allowance or inheritance might actually disrupt their ability to access important programs like Medicaid or Supplemental Security Income

Disinheriting a Child in Michigan: Important Considerations

All told, if you are weighing the possibility of disinheriting a child from your estate in Michigan, there are a number of important considerations to keep in mind and explore with the insight and guidance of an experienced and knowledgeable probate and estates attorney.

Michigan law makes provisions for children born or adopted after the execution of the will

One important thing to remember is that Michigan law does make some provisions for omitted children. Specifically, pursuant to MCL 700.2302, if a testator fails to provide in his or her will for a child born or adopted after the execution of the will, then the omitted after-born or after-adopted child is entitled to receive a share unless:

It appears from the will that the omission was intentional
The testator provided for the omitted after-born or after-adopted child by transfer outside the will, and the parent’s intent for a substitute transfer can be established or reasonably inferred

In cases where the omitted child does stand to inherit, the share of the omitted after-born or after-adopted child would consist of:

An intestate share, if the decedent had no other living children
A reasonable share equal to that devised to the decedent’s other children. Under EPIC, in abating the devises of the other children, the court shall “preserve to the maximum extent possible the character of the testamentary plan adopted by the testator.”

What’s more, if a testator fails to provide for a living child in their will because they believe the child to be deceased, then the child is entitled to share in the estate as if they were an omitted after-born or after-adopted child.

It is important to remember that Michigan law makes allowances for spouses and children to hold onto some modest property, to help ensure that they do not become impoverished due to the passing of a loved one — even if it may mean somewhat limiting or overriding “testamentary consultationdom,” as the Michigan Bar Journal puts it.

One of the most important things to keep in mind for the issues we are discussing here is exempt property, as described in MCL 700.2404.

This provision states that a decedent’s surviving spouse is entitled to “household furniture, automobiles, furnishings, appliances, and personal effects from the estate up to a value not to exceed $10,000.00* more than the amount of any security interests to which the property is subject.”

*Adjusted to $16,000 as of 2020, as provided in MCL 700.1210; you can find a chart of relevant cost of living adjustments from 2001 through 2020 here, courtesy of the Wayne County Probate Court. An experienced and knowledgeable probate and estates attorney can also help you determine the most up-to-date figures.

If there is no surviving spouse, then the decedent’s children may be entitled jointly to the same value, unless they are specifically excluded.

Rights to exempt property and assets needed to make up a deficiency of exempt property have priority over all claims against the estate, except as necessary to permit payment of administration costs and expenses, reasonable funeral and burial expenses, the homestead allowance, and the family allowance. Exempt property rights are in addition to a benefit or share passing to the surviving spouse or children by the decedent’s will, unless otherwise provided, by intestate succession, or by elective share.

These provisions were famously challenged in the case In re Jajuga Estate, in which the Michigan Court of Appeals ultimately determined that the decedent’s children should receive exempt property from the estate, even though her will explicitly disinherited them.

This led to 2018 PA 143, additional language added to the statute making it clear that a decedent may exclude one or more of the their children from receiving exempt property or assets by:

Expressly stating by will that the child takes nothing, or the child takes an amount of $10.00 or less from the estate
Expressly stating by will that the child is not to receive exempt property under this section.

The Importance of Working With an Experienced Michigan Estate Planning and Probate Attorney

In short? As with so many other matters relating to estate planning and probate, attempting to exclude a child for any reason can become very complicated, very quickly.

As Piwowarski writes for the Michigan Bar Journal:

[W]hile 2018 PA 143 fixed what was broken, it did not eliminate the need for nuance and close familiarity with the EPIC when preparing, administering, and litigating wills and trusts.

It is important to have a thorough understanding of all of the elements that may go into a Michigan estate plan and how they may be used together — including both testamentary and nontestamentary transfers. It is also critical to receive insight and guidance tailored to the unique specifics of your situation.

A probate and estates attorney can help address your questions and navigate the process from beginning to end, so that you can secure the best possible outcome for your circumstances, whatever they may be.

If you’re based in Michigan, Attorney Dean E. Patrick can help you plan for the future through estate planning — while also gaining a better understanding of how your loved ones may be impacted throughout the probate and estate administration process.

Mr. Patrick is knowledgeable on all aspects of Michigan probate, with years of experience as a practicing attorney. Whenever you’re ready to get started, he is here to listen and learn more about your circumstances, and start finding a solution to your desired outcome, whether you are a testator, a personal representative, an heir, a creditor, a named beneficiary, an omitted child, or a widow/widower.

If you have any probate-related issue that has interrupted your life, our entire firm will work hard to accomplish your goals – with the expertise, empathy, intellect, and professionalism that your matter deserves at every step of the way.

Ready to keep the conversation going? The Patrick & Associates, PLLC.. is conveniently located in Southfield, Michigan, close to both Wayne and Oakland Counties. You may click here to arrange your initial consultation or call us at (248) 663-2566 today.

The Downsides of DIY Estate Planning

Patrick & Associates, PLLC — Mon, 14 Dec 2020 05:10:10 GMT

You may be familiar with the concept of “Do It Yourself,” or “DIY.” In short, this ethos is all about tackling important projects on your own, without having to involve professionals.

Most people associate DIY with homeowners researching solutions, buying their own tools, and getting to work making fixes and repairs around the house. Other people bring the DIY spirit to cooking and crafting, looking to recreate their favorite items at home or on a limited budget. Others still try to take the DIY spirit one step forward — into more complex matters like estate planning.

The Dangers of DIY Estate Planning

It’s easy to see the appeal of the “DIY” spirit. When you fly solo, you get the opportunity to do things your way, and potentially control your costs along the way. With that said, most people realize that there are crucial limits to what can actually be done via DIY methods. Around the home, for instance, most people acknowledge the importance of bringing on a professional to deal with a house’s electrical or HVAC systems.

Similarly, while some might be tempted by the allure of DIY estate planning, the reality is that going it alone will not be the most efficient, productive, or cost-effective path forward for the vast majority of people. The documents and processes involved in estate and incapacity planning are complex. Impersonal online tools and estate planning services will never be a substitute for the personable, hands-on expertise provided by an experienced estates and probate attorney.

As the American Bar Association (ABA) put it in a writing:

Those who seek to replace proper professional advice with a do-it-yourself online document in complex fields like estate planning should understand the effects of their actions. One should bear in mind that even those with fairly sophisticated skills think twice before venturing beyond their area of expertise.

What Is Estate Planning, and Why Is It Important?

Over the course of a lifetime, we all acquire assets. When we pass on, those assets remain and they will be reallocated. The question is: Will you have a say in the matter?

Estate planning is the process that gives you a say. If you become incapacitated, and even when you’re gone, estate planning keeps you in control, through any number of different tools and mechanisms — including wills, trusts, and powers of attorney.

Whether you are single, married, or cohabitating; just starting a family or moving into retirement, estate planning is a beneficial step you can take to prepare yourself and your loved ones for the future. Having a thorough and effective estate plan in place can help to:

Assure that your assets will be distributed in a manner appropriate for your circumstances
Ensure that someone you can rely on is appointed to handle your assets and affairs, and that your partner gets the assets and control you want them to have
Assure inheritance will not become a detriment to your beneficiaries
Minimize disagreements and conflicts among your family after you’re gone
Reduce or eliminate certain costs, including estate taxes and probate fees
Direct how you will be treated if you became incapacitated
Maximize the assets available to your beneficiaries when you have passed
Streamline the probate process, and allow for more immediate distribution of your assets
Assure your children will have a guardian of your choosing if you are unable to raise them
Provide you with peace of mind knowing you minimized the stress of your circumstances for your family.

The only things that go away with time are snowflakes, youth, and opportunities. By creating an estate plan now, you have an opportunity to plan for yourself and your loved ones in the future.

With that said, it’s also important to make sure that you approach estate planning with the right mindset — and the right level of attention and support.

As the ABA notes, some people consider DIY estate planning sites and forms because they want to avoid going to a lawyer, or because they wish to save money.

However, the long-term costs of turning to such a service could ultimately outweigh the short-term benefits — especially if your incomplete or inaccurate estate planning documents lead to bitter family conflicts, lengthy estate administration issues, or even complex and costly litigation.

Instead of simplifying the probate process and making things easier for your loved ones, a less-than-stellar estate plan could cause the process to drag on and become more complicated and time-intensive. Perhaps worst of all, your wishes may not actually be carried out — meaning that important decisions about the disposition of your assets could be left to Michigan’s laws of intestate succession.

As you weigh all of your options, here are a few more questions worth evaluating and considering for yourself:

Do you understand all of the pieces that go into a Michigan estate plan?

As author Frank Addessi put it in an article for SmartAsset:

Estate planning, whether DIY or professional, does not actually include an estate plan. As funny as that may sound, there is no such thing as an actual estate plan. Estate planning is about coordinating a collection of documents from wills to trusts.

When it comes to creating a plan that will protect your property and loved ones in the event of your incapacitation or death, there are many moving parts and instruments to understand — including wills, trusts, powers of attorney for health and finances, guardianships, and conservatorships. Which instruments to use (and how those instruments can be used) will ultimately depend on the unique specifics of your circumstances.

Unlike a fill-in-the-blanks form, an attorney can help you to truly understand all of your options; make sure that you’ve fully considered every decision that may apply based on your circumstances; and take care to ensure that all of the necessary documents are executed properly.

For example, working with an experienced attorney can help ensure that your will meets all of the requirements for probate, while minimizing the likelihood for disputes or contests from other parties; or that a trust is set up to achieve your specific goals, while making sure that all legal formalities have been addressed. Meanwhile, an attorney can also provide guidance when it comes to nonprobate assets that must still be considered as part of an overall estate plan, such as jointly owned assets, or financial accounts and securities with beneficiary designations.

Will your plan be able to stand the test of time?

The reality is that estate planning documents might not take effect for years and years. And ultimately, they will generally be executed when you no longer have an active voice in the matter. As the ABA puts it:

A person who drafts his own Will must bear in mind that the critical test of his efforts will occur after his death. At that point, his voice has been forever silenced. If he does prepare his Will on his own, it’s likely no one — or at least no person who is not seen as biased due to his financial interest in the outcome — will be able to explain his intentions.

A knowledgeable and skilled estate planning attorney can help ensure that your estate plan will stand up to the test of time. For instance, working with an attorney can provide some assurance that all of the language used in your will or trust documents is clear; as the ABA notes, the specific phrases and words used in a will could make a difference when it comes to making effective dispositions of your assets.

By the same token, it is also important to always remember that life can change in an instant. New children are born; treasured loved ones pass away; couples get married and divorced. An estate planning attorney can help you build contingencies for these major life events into your estate plan. An attorney can also offer invaluable perspective and assistance as you move forward in life, and help you reevaluate and update elements of your plan over time as your relationships and circumstances change.

Can you really deal with all of the complexities and challenges on your own?

Can an impersonal online editor or chatbot really ever truly understand what makes you, you? The reality is that people are not cookie cutter, and estate planning is not a “one-size-fits-all” process. As the ABA suggests, it’s important to take time to consider all of the unique circumstances that will impact your estate, such as…

Tax and financial considerations

Addressing taxes, creditors’ claims, and other financial matters is often one of the most complex parts of the probate process. An attorney can help you weigh many of the financial considerations that will come up down the line, including reducing estate taxes to help maximize the assets available to your beneficiaries

Loved ones with special needs

As the ABA puts it: “What if a child suffers from a learning disability, incapacity or is vulnerable to the influence of people seeking to grab his inheritance? What will happen to inherited funds if a child is disabled and requires governmental assistance such as Medicaid?” For parents or guardians of adults or minors with special needs, it may be important to take specialized action — such as setting up a supplemental trust or appointing a conservator.

Property ownership in multiple states

It’s common to have to deal with real estate in more than one state after a loved one dies. Here in Michigan, for instance, “snowbirds” may have a vacation home in Florida, or a lake house in Wisconsin. A separate probate proceeding, called an “ancillary” probate, must be opened to deal with out-of-state real estate in the state the property is located. An ancillary probate lawyer can help handle this process, no matter how complex it may seem.

Who will help you consider all of your options, and facilitate the process?

It’s important to remember that the estate planning process is not just about drafting documents, but making important decisions. Who do you trust to oversee the administration of your estate as a personal representative? Who will take on key responsibilities as a trustee? Who do you want to consider as the guardian for your children, taking on the responsibility of raising them if you cannot? Who do you trust to execute your wishes as an agent through a power of attorney for health care or a power of attorney for financial matters?

An estate planning attorney can help you weigh all of your options as you consider who to name in these important roles. Broadly speaking, it is important to find individuals who are trustworthy, easy to communicate with, and responsible. The most important thing is choosing someone who will be the best choice for your circumstances. Remember, this process is not about making people feel equal; it is about ensuring your wishes are respected and carried out when you no longer have a say in the matter.

As author Liz Weston puts it for NerdWallet, working with an experienced attorney provides an opportunity “to discuss your situation with an expert who has seen many estate plans in action and who knows what can go wrong.” An attorney can walk you through the process while being genuinely attentive and responsive. They can make sure you get answers that are tailored to your circumstances, in plain language that is easy to follow.

Over time, an attorney can help protect your estate planning documents, to minimize the risk of anything critical getting lost or misplaced. And when it is time for estate administration, having a a relationship with an attorney who is familiar with a decedent’s assets and personal circumstances may allow for a speedier administration of the estate, as the ABA notes.

Want to Discuss Any Element of Michigan Estate Planning and Probate?

There is no reason to put off taking care of those you love and that which you have worked hard for.

If you have questions or are curious about how to move forward, contact our offices at (248) 663-2566 or reach out online to set up your initial consultation.

Power of Attorney Abuse: What to Know and How to Prepare

Patrick & Associates, PLLC — Mon, 07 Dec 2020 05:52:54 GMT

Unfortunately, it’s inevitable for bad things to happen. Fortunately, it’s possible to take precautions to make bad situations easier to manage. If something happens that leaves you unable to make or communicate decisions for yourself, a durable power of attorney is a tool that can help ensure that someone you trust will be empowered to manage your financial and health care decisions.

Broadly speaking, a power of attorney (POA) is a written instrument that gives legal authority to a third party (known as the agent or attorney-in-fact) to act on the behalf of someone else (known as the principal).

In estate and incapacity planning, the most common type of power of attorney is the durable power of attorney. A durable power of attorney contains specific language that ensures your agent can act even if you become incapacitated, while keeping the power in your hands for as long you can make decisions for yourself. For the purposes of estate and incapacity planning, there are a few different types of durable powers of attorney to consider, including:

Durable power of attorney for health care. This durable POA gives someone of the principal’s choosing the right to handle health care decisions in they event that the principal becomes incapacitated. This might include seeking treatments and making end-of-life decisions.
Durable power of attorney for financial matters. This type of durable POA gives the agent the right to handle the principal’s financial affairs and transactions should they become incapacitated, including transferring assets into a trust, pursuing claims or actions on their behalf, managing business affairs, selling property, and more.

While no one wants to think about the possibility of suffering from an accident or succumbing to an illness, taking steps to put a power of attorney in place can help make sure that your wishes are respected and carried out. In addition to keeping you in control, this can make a difficult time easier to navigate for your loved ones — protecting their privacy while helping them avoid the costly and time-intensive living probate system. On a personal level, taking time to think about a power of attorney can help you attain your goals — and gain some well-deserved peace of mind.

With that said, there are many important considerations to factor in when contemplating a power of attorney — including the potential for power of attorney abuse.

What Is Power of Attorney Abuse?

We know that the reasons why someone would might to ensure they have an agent ready with durable power of attorney are scary. And it can be just as scary to think about what would happen if your agent or attorney-in-fact were to take advantage of their status.

In a writing, the National Center on Elder Abuse (NCEA) describes power of attorney abuse as

the misuse by the agent of the authority granted by the principal. It means making a decision or taking an action that is not in the principal’s best interest.

Under Michigan law, agents designated and acting under a durable power of attorney are subject to certain rights, restrictions, and responsibilities. First and foremost, agents are expected to act in accordance with the standards of care applicable to fiduciaries — meaning broadly that they are obligated to act in good faith, and put the best interests of the principal and the estate above their own.

The agent is expected to take reasonable steps to follow the instructions of the principal, and to be able to provide an accounting to the principal (or a court-appointed guardian or conservator) upon request. Agents are also expected to maintain records of their actions taken on behalf of the principal, including documenting transactions, receipts, disbursements, and investments.

Unless provided for in the power of attorney or by judicial order, the agent or attorney-in-fact cannot make a gift of all or any part of the principal’s assets. They are also barred from creating an account or other asset in joint tenancy with the principal, unless ordered to do so by the court or the POA.

Actions that constitute an abuse of power of attorney might include making decisions that are decidedly not in the principal’s best interest. For instance, an agent might take advantage of their position to spend the principal’s money for their own benefit — such as buying him- or herself expensive goods or supporting their private business interests, rather than using funds for the principal’s care. Similarly, the agent may attempt to give away some of the principal’s property as gifts, without having the proper authority to do so.

In other situations, power of attorney abuse may occur if the POA itself is created through fraud, forgery, or coercion.

The reality is that agents and advocates can and do sometimes steal and attempt to take advantage of the principal. Part of the reason why, as the NCEA explains, is that powers of attorney:

usually are not subject to oversight by a court or third party. If the principal becomes incapacitated and can no longer monitor the agent’s actions, this lack of oversight for a broadly written legal document makes it very easy for an agent to abuse the authority granted by the principal.

For this reason, some cynical observers have been known to call powers of attorney “a license to steal.”

However, there are also remedies and solutions that can help protect the principal and their assets. As the Michigan Bar has put it in a writing, if an agent abuses their authority, anyone involved in the principal’s welfare

can ask the probate court to get involved, cancel the durable power of attorney, and either appoint a conservator to handle [the principal’s] affairs or enter some other protective order on [the principal’s] behalf.”

An experienced attorney can help you understand the specifics of your circumstances and consider appropriate action. This might include pursuing litigation against the agent for breach of fiduciary duty, including holding the agent liable for any damage or loss to the principal. Families or other interested parties faced with an abuse of power of attorney might also pursue other types of civil lawsuits, as well. A knowledgeable local attorney can also help you to understand if the matter constitutes elder abuse under Michigan law.

Depending on the circumstances, individuals may also be able to pursue criminal charges if the agent violated state or federal laws by committing crimes such as forgery, fraud, exploitation, or embezzlement, as the NCEA explains.

How Can You Avoid Abuse of Power of Attorney?

A Michigan estates and probate attorney can help you choose the tools and solutions that will be best suited for your individual circumstances. As you sit down with your legal professional, here are a few ideas to discuss that may help minimize the likelihood that someone will be able to abuse or take advantage of a power of attorney:

Be extremely selective when choosing an agent.

As when choosing a personal representative or trustee, it is important to be selective of who you entrust with the important responsibility of acting on your behalf as an agent or attorney-in-fact. Consider the character of the agent, and how well they fit with the responsibility you are giving them.

Do you trust them completely to make decisions in your place? Are they fiscally responsible, so as to be able to handle your financial or personal affairs appropriately? Are they responsive and capable? Do you trust them to communicate effectively with other members of your family, local financial institutions, or the courts? Remember, this process is not about making people feel equal. It is about ensuring your wishes are respected and carried out when you no longer have a say in the matter.

Take action to limit or restrict the agent’s powers.

The powers granted to an agent or attorney-in-fact can be quite broad, or fairly narrow. If you are a principal, an experienced and knowledgeable attorney can help you tailor a power of attorney that will suit your needs and goals. For example, you could grant your chosen agent the ability to make only certain financial transactions, such as paying bills. You can also use your power of attorney to impose certain requirements on your chosen agent — for instance, a requirement to provide regular accountings, or to stay in communication with your family.

Consider nominating co-agents.

When in doubt, you may wish to consider splitting up responsibilities. You can always grant powers of attorney to more than one individual; this can help provide a system of checks and balances, and help ensure that one person cannot take action alone.

Actively review your estate and incapacity planning documents on a regular basis.

Broadly speaking, a principal can revoke or replace a power of attorney at any time, as long as they have capacity and follow all proper protocols to do so. It is generally a good practice to review your estate and incapacity planning documents with your attorney every few years, in order to make sure that your plans still fully and accurately reflect your wishes.

Keep the Discussion Going with Metro Detroit’s Probate and Estates Attorneys

Interested in learning more about powers of attorney in Michigan? Ready to start preparing for the future, and take control over who will make important decisions in the event that you become incapacitated?

For all these important matters and more, it’s wise to have an intelligent and experienced lawyer at your side, fighting for your rights and the well-being of your loved ones.

Our skilled law firm is here and ready to assist with all of your incapacity and estate planning needs, including guardianships, conservatorships, and powers of attorney.

If you require further legal advice or if you are looking for representation as you navigate Michigan’s tricky court system, don’t hesitate to call our Southfield, Michigan office at (248) 663-2566 to set up your consultation initial consultation. You may also click here to get in touch online.

What Is a Holographic Will?

Patrick & Associates, PLLC — Thu, 03 Dec 2020 05:40:52 GMT

Here in Michigan, a will is an important estate planning tool — one that can allow you to maintain control over the distribution of your property and provide for your loved ones when you are gone. Under Michigan’s Estates and Protected Individuals Code (EPIC), there are several different methods that a testator may use to create a valid will, including the often-misunderstood holographic will.

What Is a Holographic Will?

Under Michigan law, a will is generally considered valid if it meets certain criteria. Namely, for a will to be valid:

It must be in writing.
It must be signed by the testator (or in the testator’s name by some other individual if done in the testator’s conscious presence and at their direction).
It must be signed by at least two witnesses.

In broad terms, a holographic will is an alternative way to create a last will that does not require witnesses, though it must generally still meet certain requirements in order to be considered valid — namely, that it is dated, signed, and that the testator’s signature and material portions of the document are in the testator’s handwriting. A writing may also be considered a valid will if intent that the document constitutes a testator’s will can be established by extrinsic evidence.

Generally speaking, for any will to be considered valid, the testator must be 18 years of age or older and have sufficient mental capacity, which includes:

Having the ability to understand that one is providing for the disposition of property after death.
Knowing the nature and extent of one’s property and “the natural objects of his or her bounty”
Having the ability to understand in a reasonable manner the general nature and effect of signing the will

A will must also be made without constraint or undue influence, such as coercion or manipulation from an outside party.

Michigan is one of a handful of states that permits and recognizes holographic wills. In fact, EPIC goes one step further, and notes that a writing intended as a will can be recognized if it can be established “by clear and convincing evidence” that the decedent intended the document or writing to constitute a will, a revocation of a will, an addition or alteration to a will, or a revival of a previously revoked will.

When and Why Are Holographic Wills Used?

There are any number of circumstances that might result in the production of a holographic will. Holographic wills may be used when someone is suffering from a terminal illness, or fears that their death is imminent. For example, someone who is trapped or stranded may write down their last wishes and requests in the form of a holographic will. In other cases, a holographic will in some form may be included as part of a suicide note.

More generally, some people will create holographic wills when they are unable or unwilling to seek out assistance from another party, such as an attorney. For example, some reclusive or housebound individuals may attempt to create a holographic will from home. In other events, it could be done in an attempt to keep personal decisions private from family members or witnesses, or simply out of a desire to go “DIY” and potentially save money upfront, rather than seeking out professional guidance.

The Challenges and Disadvantages of a Holographic Will

While some people may see a holographic will as an opportunity to get things done quickly, privately, and cheaply, the reality is that they often cause more confusion and difficulties for your estate and your loved ones down the line.

Holographic wills often face more disputes and contests to their validity than other types of wills. Without witnesses, interested parties may challenge a holographic will on the grounds of fraud or forgery. Ultimately, it may come down to a handwriting expert to prove whether or not the document was actually created and signed by the alleged testator. Similarly, a holographic will may leave other questions and ambiguities to parse, which could lead to will contests — for instance, over whether or not the holographic will was created under coercion or undue influence from an outside source, or whether the decedent had sufficient mental capacity.

A hastily prepared holographic will may also increase the likelihood for errors or accidents, which could affect the efficacy of the will and the amount of time it takes to administer the decedent’s estate. There could be other documents out there that conflict with the holographic will, such as a previous will or other handwritten alterations and amendments. Without the insights and guidance of an experienced professional, someone writing their own will may also commit simple errors and unintentional omissions — such as neglecting to name a guardian for their minor children, forgetting about important assets, or using unclear or inaccurate language which could cause confusion and leave room for interpretation and disagreements.

Finally, a holographic will may cause issues if the decedent owned property in multiple states, which would require ancillary probate. Because not all states recognize holographic wills, this situation could create some difficulties.

Ultimately, there are many situations in which a holographic will might create just as many questions as it resolves. In situations where you must defend or contest a holographic will in the probate court, it is important to work with an experienced legal professional who can help you understand the ins and outs of the situation and aggressively advocate for your position.

The Importance of Working With an Experienced Michigan Estate Planning and Probate Attorney

Whether you are taking care to plan for your family’s future or put in the position of defending or contesting a will in the Michigan probate courts, know that you do not have to go through these difficult circumstances alone.

Ready to create a will that will help you maintain control over your most important assets, and help take care of the people who matter most? Our firm has the experience and knowledge to walk you through the process of creating a last will that will protect your family.

Facing a will contest? Handling all of the steps involved can be complex and time-intensive. A lawyer skilled in probate litigation can help you understand all of your options and navigate through the probate courts with the guidance and advice your matter requires — from doing research and determining the validity of the contest, to filing the proper paperwork at the right time, to aggressively representing your interests in the courtroom should it become necessary.

At the Patrick & Associates, PLLC., we put our legal experience and skills together with our commitment to excellence in representing your rights. You can depend on our law firm’s ability to listen to you and our talent for creative strategies. We will be flexible in order to accommodate your needs, and we work hard to discuss these difficult matters in terms that are easy to comprehend. With staff available 24 hours a day, we’re also never far from your questions and concerns.

If you have further questions or are looking for representation as you navigate Michigan’s tricky probate court system, don’t hesitate to call our Southfield, Michigan office at (248) 663-2566 to set up your initial consultation. You may also click here to get in touch online.

Unpacking 7 Myths About Estate Planning and Probate

Patrick & Associates, PLLC — Mon, 16 Nov 2020 05:27:49 GMT

Estate planning is one of the most useful and important steps you can take to prepare for the future — but it is also one of the most commonly misunderstood.

There are plenty of myths and misconceptions out there about estate planning and probate, which hold people back from taking action when they have the chance.

Put simply, having an estate plan in place is a way to keep control of your most important assets, and have a say in the matters that will directly impact the people you care about even when you are unable to speak on your own behalf. There are a variety of tools that can be used as part of an estate plan, including wills, trusts, and powers of attorney. Which instruments to use will depend on the specifics of your circumstances.

Interested in learning more about estate planning and the probate process here in Michigan? Separating fact from fiction is an important way to get started. Let’s get to the bottom of seven all-too-common estate planning myths:

MYTH #1: “Only wealthy people need to think about estate planning.”

Estate planning is not just for the wealthy; it is for anyone who wants to be able to stay in control, no matter what the future has in store.

Regardless of how many assets you have acquired up to this point in your life, estate planning is an important step that gives you a say in how your property will be reallocated when you’re gone. Importantly, you can also use estate planning mechanisms, such as your will, to care for your loved ones when you cannot be there to provide for them yourself. Nominating a guardian for your minor children is an important piece of the typical estate plan, as is nominating a conservator to handle the financial affairs of your incapacitated loved ones. You can also use a trust to assure distribution of your assets in a manner appropriate for your circumstances, and maximize the assets available to your beneficiaries.

At a minimum, like it or not, we should also all have a plan for incapacity. While it’s never fun to think about what would happen if you were to sustain a major injury or succumb to illness, it is necessary to ensure your affairs are handled in the way you would want — and to keep your family out of the arduous and complicated process of living probate. In recent months, the coronavirus pandemic has served as a vital reminder of the importance of incapacity planning.

MYTH #2: “Estate planning isn’t something I have to think about until I’m much older.”

According to a recent poll cited by CNBC, about 62% of Americans say that they do not have a will. Taking it one step further, a report from Caring.com suggests that less than one-third of all Americans (32%) have any estate planning documents in place.

While many people believe that they only need to start thinking about estate planning later in life, the reality is that putting it off for too long could be disastrous for yourself and your loved ones.

Estate planning is a relevant and important concern if you have any property you want to distribute, or any loved ones you want to provide for when you’re gone. This makes it a critical consideration, no matter what stage of life’s journey you may currently be on. Whether you are recently married or divorced, a first-time homeowner or a retiree getting ready to downsize, there are estate planning tools and mechanisms that can make life easier for yourself and the people you care about. Importantly, you can also update and refine your estate plan over time, to ensure that it always aligns with your goals and expectations as your circumstances change.

In short? The only things that go away with time are snowflakes, youth, and opportunities. You have an opportunity to plan for you and your loved ones now. Why would you let that pass?

MYTH #3: “If I’m married, my spouse will inherit everything and get to bypass probate.”

Although your spouse is entitled to assets from your estate, if you have not put a plan in place, your spouse will likely be subject to the probate court and its control.

Without an estate plan, you leave things up to chance. If you do not make decisions about the allocation of your property and assets when you have the chance, you will end up leaving things to Michigan’s laws of intestate succession. These strict and complicated laws determine what happens to a decedent’s estate when they do not have a will. Ultimately, leaving things up to intestate succession could result in your assets being distributed in a manner that you would not want. While your spouse is entitled to some assets, other people in your life may also be able to claim a share of your intestate estate — such as an estranged child, or a parent you’ve broken off contact with.

What’s more, failing to leave a roadmap could open the door for bitter contests and disputes, including family arguments that turn into prolonged legal battles.

Having an estate plan in place can help assure that your partner gets the assets and control you want them to have. If nothing else, estate planning is a straightforward way to offer guidance and protection to your spouse, making a difficult and uncertain time far easier to navigate.

MYTH #4: “Having a will is enough to bypass probate.”

Having a will does not mean that your estate will avoid probate.

However, if you have assets in your name and want to control the distribution of those assets when you pass, a will can accomplish that goal. Having a will helps facilitate the probate process, and, when executed properly, can help to avoid or minimize the potential for contests.

Importantly, wills also offer you the ability to carry out any number of important tasks, including:

Nominating someone you trust to serve as personal representative, and handle your affairs in the probate court.
Nominating a conservator to handle the financial affairs of your minor or incapacitated adult children or loved ones.
Nominating a guardian to handle the care, custody, and control of your minor children to assure they grow up the way you intended.
Establishing a long-term distribution scheme for loved ones who are not as financially savvy as you would like, usually working in conjunction with other estate planning tools such as a trust.

MYTH #5: “I have a power of attorney in place. My agent can distribute my assets when I pass.”

A power of attorney is an important tool, which may be used in conjunction with a will or trust. However, it is limited in its scope — particularly once you’ve passed away.

Broadly speaking, a power of attorney is a written instrument that gives legal authority to a third party (known as the “agent” or “attorney in fact”) to act on the behalf of someone else (known as the “principal”). In estate planning, power of attorney (POA) is a tool that can be used to ensure that someone you trust manages your financial and health care decisions when you no longer can.

For estate planning purposes, it is imperative that the power of attorney used can be classified as a “durable” power of attorney. A durable POA contains specific language that ensures your agent can act even if you become incapacitated, while keeping the power in your hands for as long you can make decisions for yourself. However, when the principal on the power of attorney passes away, the agent’s power is dissolved.

Fortunately, there are other mechanisms that can be used to ensure that your wishes will be carried out after you’re gone — such as nominating a personal representative in your will, naming a successor trustee to oversee the management and administration of your trust, or nominating a conservator to manage the financial affairs of your minor children.

MYTH #6: “If I die without a will, all my assets will go to the government.”

Under Michigan’s laws of intestate succession, the contents of an intestate estate only escheat to the government in very limited circumstances — namely, if you are not survived by any legal heirs.

However, it is true that if you do not create a plan to determine how your properties and assets will be handled in the event of your passing, then the state will make many important decisions for you. This takes away your control. Having an up-to-date and thorough estate plan helps ensure that the people and properties you care about will be handled in the manner that you decide. Meanwhile, having a plan in place can help streamline and simplify things for your loved ones. The probate court is not a comfortable setting for handling an estate. Failing to create a plan can make this time even more long and arduous for your loved ones, who are already dealing with the emotions and stress of losing someone dear.

MYTH #7: “Setting up a trust means giving up control of my assets.”

Does creating a trust mean giving up control? Not if you don’t want it to. There are many different types of trusts that can be used here in Michigan, depending on your unique goals.

Generally speaking, with one of the most common and popular types of trusts, you will be able to maintain control of your assets for as long as possible.

In an inter-vivos or revocable living trust, the trustee controls the assets. One of the practicalities of creating such a trust is that you can typically assign yourself as the trustee. This way, you remain in complete control of your trust assets. In the event that you can no longer perform your duties, the responsibilities would legally be granted to the successor trustee you’ve named.

Get Real Answers from Michigan’s Probate and Estate Planning Attorneys

When it is time to take care of your estate planning needs, get the answers, insight, and guidance you and your beneficiaries deserve. Whether you are trying to avoid probate with a trust, want to make sure your assets are protected and transferred according to your wishes, or want to plan for incapacity with powers of attorney, our attorneys can help you custom tailor a solution to suit your needs.

At the Patrick & Associates, PLLC., we put our legal experience and skills together with our commitment to excellence in representing your rights. You can depend on our law firm’s ability to listen to you and our talent for creative strategies as we help you navigate estate planning and probate, including (but not limited to) general probate litigation, will and trust contests, beneficiary disputes, guardianships, and conservatorships.

Our goal is to provide you with only the best professional legal services available in Michigan. Work with us and you have our sincere promise to carefully plan and manage each and every step of your legal matter from start to finish.

Have any questions? Ready to get started? Our staff is available 24/7 to help you with your legal matters. Contact Dean E. Patrick at his Southfield office at (248) 663-2566, or click here to arrange your initial consultation.

FAQ: What Is the Estates and Protected Individuals Code, or Epic?

Patrick & Associates, PLLC — Thu, 12 Nov 2020 05:05:44 GMT

If you spend any time researching matters relating to guardianships, conservatorships, wills, trusts, and estate administration in Michigan, you’re bound to come across the phrase “EPIC.” Short for “Estates and Protected Individuals Code,” this refers to the act that governs matters relating to the administration of estates of deceased persons and protected individuals in our state. These are matters over which the probate court has exclusive jurisdiction.

Curious about all things EPIC? Let’s take a look at the history behind this important act — and what it means for Michigan probate matters in 2020 and beyond.

A Brief History of Michigan’s Estates and Protected Individuals Code (EPIC)

The early nineteenth century saw the beginnings of Michigan’s modern legal system. In its early days, Michigan’s legal system consisted of appointed justices, who served on courts including “The Court of Common Pleas” or “The Court of General Quarter Sessions.” The courts continued evolving from there, including the formation of the probate court system.

As the Probate Court of Kent County puts it in a writing, the probate court is:

a Court of statutory jurisdiction, primarily concerned with the protection of incapacitated or mentally ill individuals and their assets, and the proper transfer of assets at death.

Throughout its history, Michigan’s probate courts have been governed by several different codes, including the 1939 Probate Code, and the Revised Probate Code (RPC), which was enacted in 1978. Signed into law in 1998 and becoming effective in April of 2000, EPIC was devised to replace the RPC.

In a contemporaneous writing, the State Bar of Michigan heralded EPIC as “the most important piece of legislation affecting probate and trust administration in over 20 years.”

As the State Bar explains, EPIC retained some of the “unique and essential features” of Michigan law, while also serving as a true integration of the Uniform Probate Code (UPC) — an act meant to streamline and standardize matters relating to inheritance and decedents’ estates across the United States, which has been adopted in full or in part by 18 states.

Preparation of EPIC took more than seven years, and included input from legal practitioners, probate judges, probate registers, and financial professionals.

What Does The Estates and Protected Individuals Code (EPIC) Do?

As described in the act itself, EPIC is intended to:

revise, consolidate, and classify aspects of the law relating to wills and intestacy, relating to the administration and distribution of estates of certain individuals, relating to trusts, and relating to the affairs of certain individuals under legal incapacity.

By extension, EPIC also includes provisions governing many of the transfers, contracts, and deposits relating to these matters, including the facilitation of trusts.

EPIC also provides for the powers and procedures of the probate court, which has jurisdiction over these matters.

More specifically, EPIC’s primary purposes are to:

Simplify and clarify the law concerning the affairs of decedents, missing individuals, protected individuals, minors, and legally incapacitated individuals.
Discover and make effective a decedent’s intent in distribution of the decedent’s property.
Promote a speedy and efficient system for liquidating a decedent’s estate and making distribution to their successors.
Provide for a uniform law among various jurisdictions, both within and outside of the state.

EPIC applies to the affairs and estates of decedents, missing individuals, and protected individuals living in Michigan; as well as a nonresident’s property located in this state. EPIC also applies with regards to trusts subject to administration in Michigan, as well as survivorship and related accounts.

As the State of Michigan explains in a writing, protected individuals are “persons who by reason of their age or physical impairment cannot manage their own affairs,” including incapacitated individuals and minors.

EPIC and the Michigan Probate Court

Under EPIC, the court is granted “exclusive legal and equitable jurisdiction” of all of the following:

Matters relating to the settlement of a deceased individual’s estate.

This includes both testate and intestate estates subject to administration in Michigan. A testate estate is one that involves the probate of a decedent’s will, while intestate estates are those where there is no will. The court may be involved in proceedings relating to the internal affairs of the estate; estate administration, settlement, and distribution; the construction of a will; determination of heirs; determination of death; and the rights of devisees, heirs and fiduciaries connected to the estate.

Proceedings involving trusts.

EPIC grants the court exclusive jurisdiction over proceedings concerning the validity, settlement, administration, distribution, modification, reformation, or termination of a trust, as well as the rights and obligations of trustees and trust beneficiaries — including appointing or removing a trustee, ascertaining beneficiaries, and resolving questions stemming from the administration of a trust.

Proceedings that concern guardianships, conservatorships, and protective proceedings.

This includes matters relating to the protection of an individual under disability, and his or her property. As the Probate Court of Kent County explains:

If a conservator or guardian of the estate is appointed, the Court must then monitor the continuing proceedings to ensure that the required annual accounts are filed and approved, showing that the assets are being held and used for the benefit of the ward. The Court also conducts hearings regarding disputes that arise concerning conservatorships and petitions to terminate or modify conservatorships.

Proceedings to require, hear, or settle the accounts of a fiduciary.

This includes ordering instructions or directions to a fiduciary that concern an estate within the court’s jurisdiction, particularly upon the request of an interested person.

Interested In Learning More About Probate In Michigan?

When you have a foot problem, you go to the podiatrist. When you have a heart problem, you go to the cardiologist. When you want to estate plan or are forced into the probate court, you need to go to an established probate and estate planning attorney. That’s where we come in.

Attorney Dean E. Patrick focuses on:

Estate planning, including wills and trusts
Estate administration and settlement, including mediation
Incapacity planning, including powers of attorney for health care and finance
Guardianships, whether contested or uncontested
Conservatorships, whether contested or uncontested
Probate litigation, including will and trust contests
Fiduciary services, including trusteeships and conservatorships

You and your family can rest assured knowing that our office is handling your matter with professionalism and expertise. Our meeting schedules are flexible in order to accommodate your needs and we work hard to discuss these difficult matters in terms that are easy to comprehend. Our office is conveniently located in Southfield, Michigan and our staff is available 24 hours a day, 7 days a week to receive phone calls and help you with your legal matters.

Have any more questions? Ready to get started? Contact Dean E. Patrick at his Southfield office at (248) 663-2566, or click here to arrange your initial consultation.

Who Needs a Power of Attorney?

Patrick & Associates, PLLC — Tue, 27 Oct 2020 04:55:30 GMT

In estate planning, mechanisms such as wills and trusts can help guide and direct your assets after you pass away. What happens if you become incapacitated due to an accident or illness, and are unable to make or communicate about important decisions while you’re still alive? That’s where incapacity planning comes in.

It is never enjoyable to think about what would happen if you were to sustain a major injury or succumb to an illness. But while it may not be fun, it is necessary to take action while you still have the chance — and help ensure that your affairs will be handled in the way you would want. A power of attorney can empower you to do just that.

What Is a Power of Attorney — and Why Are They So Important?

Black’s Law Dictionary defines a power of attorney, broadly, as:

An instrument authorizing a person to act as the agent or attorney-in-fact of the person granting it.

Powers of attorney are most commonly used to ensure that someone you trust manages your financial and health care decisions when you can no longer do so on your own. A power of attorney that allows your agent to act even if you become incapacitated is known as a durable power of attorney.

This important mechanism is useful for anyone who:

Wishes to be proactive, and take precautions to make potentially difficult or uncertain situations easier
Wants to make sure that trustworthy and reliable individuals of their choosing are empowered to handle their financial, health care, and end of life decisions — rather than a court-appointed guardian or conservator
Wants assurance that their wishes will be followed when they are unable to carry them out for themselves
Seeks to provide comfort and peace of mind for themselves and their loved ones
Wants to minimize the risk for disagreements or conflicts among family members
Wishes to keep their financial, personal, and medical affairs private
Wants to keep themselves, and their loved ones, out of the complex and costly living probate system

Without a power of attorney, your loved ones’ hands may be tied in a difficult moment. They may not be able to sell property, make business decisions, gain access to funds, or manage investments — making an already tough moment even harder to navigate.

Broadly speaking, if you become incapacitated without a durable power of attorney or a similar mechanism in place, the courts will often be forced to step in and appoint someone to handle your financial and medical decisions — a process known as living probate. This process can be slow, uncomfortable, and expensive. It can also put different family members at odds with one another.

Meanwhile, it’s important to remember that without a power of attorney, you are giving up control over who will ultimately make important decisions on your behalf. Indeed, the court may appoint someone to act as your guardian or conservator that you would not have chosen for yourself. What if a family member you do not trust is appointed to this important role? What if you want different parties executing your medical and financial decisions?

Different Types of Power of Attorney

There are several types of power of attorney documents, each designed to give a chosen agent different levels of control over your medical and/or financial decisions.

Broadly speaking, the three types of power of attorney most frequently used in Michigan estate and incapacity planning include:

Durable power of attorney for financial matters.This is a legal document that gives the agent of your choice the right to handle your financial affairs if you become incapacitated, including transferring assets into a trust, pursuing claims or actions on your behalf, managing business affairs, selling property, and more.
Durable power of attorney for health care. This is a legal document that gives someone of your choosing the right to handle your health care decisions if you become incapacitated, including treatments and end-of-life decisions. This person is known as an agent or advocate.
Durable power of attorney for mental health matters. Similar to a power of attorney for health care, this names an advocate to handle your mental health care decisions if you become incapacitated. A patient advocate is obligated to act in your best interest and take reasonable steps to follow all of your expressed desires, preferences, and instructions relating to your care.

Among these types of powers of attorney, there are other important factors to keep in mind. First and foremost, there is the aforementioned question of whether or not a power of attorney is durable. A “durable” power of attorney is set up in such a way that someone may act on your behalf if you become incapacitated. Some types of power of attorney are set up to be non-durable, meaning that they cease to have an effect if the principal becomes incapacitated.

These tools are most often used in situations in which the principal needs someone to act on their behalf for a specific purpose — for example, if they are traveling and unable to attend an appointment, or if they need to authorize an attorney to sign paperwork for them during a transaction.

Meanwhile, it’s important to consider whether an agent’s powers will be broad, or more restricted. A general power of attorney typically grants the agent broad or extensive decision-making authority, while a limited or special power of attorney narrows their scope — perhaps to specific assets or legal decisions, depending on the circumstances.

The Importance of Talking With an Experienced Legal Professional

Powers of attorney are important tools, which can empower you to safeguard your assets, protect your privacy, and maintain control over pressing financial, health care, and end of life decisions. With that said, they can be complicated, and difficult to understand alone.

That’s why it’s so important to consult with an experienced estates and probate attorney, such as our very own Dean E. Patrick.

Dean can help you navigate this process from beginning to end, from understanding all of your options to nominating an agent to help you when you’re in need. If you currently have a power of attorney and are unsure if your document can be classified as durable, Mr. Patrick can help review your current situation during your consultation initial consultation.

While we all hope we don’t need to use the insurance we pay for, we are glad it’s there when we need it. There are no good excuses for an adult to be without financial and health care power of attorney.

Ready to put some protections in place? We are here for you. Our skilled law firm is here and ready to assist with all of your incapacity planning and probate needs, including powers of attorney.

At the Patrick & Associates, PLLC., we will work hard to accomplish your goals, while handling your matter with professionalism and expertise. Mr. Patrick can help you navigate through all the legalities and formalities, so that you can rest assured that you and your loved ones will be taken care of, whatever life brings. Don’t hesitate to call our Southfield, Michigan office at (248) 663-2566 to set up your initial consultation. You may also click here to get in touch online.

How to Start the Estate Planning Conversation with Your Loved Ones

Patrick & Associates, PLLC — Thu, 22 Oct 2020 04:17:39 GMT

Whether you are hoping to encourage a loved one to begin the estate planning process, or looking for the best ways to discuss your personal plans and expectations with your family, there is never a wrong time to get started. With that being said, many people in Michigan avoid talking about estate planning matters — often, because this heavy topic is simply too uncomfortable for them to think about and discuss.

Whatever stage of life’s journey you may be on, estate planning is one of the most important ways to prepare for whatever the future may hold. When executed properly, an estate plan can empower you to keep control of your most important assets, and have a say in the matters that will directly impact the people you care about.

Still, talking about estate planning will almost always mean broaching subjects that a lot of us would rather avoid, including our personal relationships, our finances, and our health. As a result, many families put off these crucial conversations — until it’s too late.

Indeed, a study from Independent Age suggests that nearly 7 million people aged 65+ have never talked with their family about estate planning or other end-of-life matters. While 79% of all people say that they consider these conversations important, less than 25% have actually begun having them. Similarly, a 2018 survey from The Conversation Project found that while 92% of Americans believe it’s important to discuss their end-of-life wishes, less than a third (32%) have actually had such a conversation.

In many cases, this breakdown in communication ultimately leads to more confusion and stress for everyone involved. As an example, a survey from the financial services firm Fidelity suggests that 92% of parents say that they expect one of their children to serve as the executor or personal representative for their estate — yet more than a quarter of the kids who are expected to fill the role don’t know about their parents’ goals or intentions.

How can you make it easier to broach this important subject? Here are five key steps you can take to help make talking about estate planning less intimidating — and significantly more productive:

1.) Explain the Importance of Planning Ahead, and Focus on the Positives

Talking about health concerns and end-of-life issues isn’t anyone’s idea of a good time. The same goes for discussing financial matters, or your personal relationships with friends and family. But while the various topics that go into estate planning don’t necessarily make for good dinner party conversation, they are incredibly important to consider — for the sake of your long-term comfort, financial stability, and peace of mind.

If you are dealing with a reluctant loved one, it may help to focus on the benefits of estate planning by emphasizing the upsides. Once you get over the initial hurdles, starting with estate planning is a powerful way to ensure that someone you trust is appointed to handle your assets and affairs; minimize or eliminate the cost of probate fees; assure that your loved ones get the assets and control you want them to have; assure your children will have a guardian of your choosing if you are unable to raise them; and give you peace of mind knowing that you minimized stress and uncertainty for your friends and family.

On the other hand, if you do not take action to keep control while you still can, this can make an already difficult transition even harder for the people who matter most to you — and leave many important decisions up to the control of the state.

Reiterate that estate planning is an opportunity for your loved ones to plan for themselves and the people they love — and that they shouldn’t let it pass.

2.) Know the Right Questions to Ask

As noted, talking about estate planning involves considering your health, your finances, and your personal relationships. What will happen to your most precious assets when you’re no longer around to manage them? Who will make decisions on your behalf when you can no longer do so on your own? These are weighty matters, and estate planning conversations can easily spin out in a million different directions.

To make things easier early on, it may be most effective to focus the conversation on a few core, concrete topics that you can actually address. This starts with understanding what goes into a comprehensive Michigan estate plan, including wills, trusts, and powers of attorney. There a variety of tools that assure you keep control even when you are unable to speak on your own behalf. Which instruments are used depend on the specifics of your circumstances.

As you sit down with your loved ones, it may help to ask meaningful questions about these estate planning tools, which can lead to actionable information and next steps. Depending on the specifics of your situation, some potential questions to ask might include:

Do you have a will?
What assets and accounts mean the most to you?Do you have a plan in place to make sure they are handled or distributed in line with your wishes?
When was the last time you made meaningful updates to your will or trust documents?
Have you thought about what would happen if you got seriously sick or became incapacitated?
Have you named a durable power of attorney for finances? A durable power of attorney for health care? Have you made any other plans for incapacity, such as nominating a guardian or conservator?
What steps have you taken to prepare for probate?
Do you know what a personal representative does? Have you thought about who you would want to act as your personal representative?

Looking to gain a better understanding of all of these estate planning mechanisms — and what they may mean for you? An experienced probate and estate planning attorney can help you to understand what to expect, and guide this conversation forward while discussing these difficult matters in terms that are easy to comprehend.

3.) Have The Estate Planning Conversation Early and Often

To make these important discussions more helpful and productive for everyone involved, start before there’s a crisis or emergency situation that needs to be addressed. In a difficult moment, everyone’s attention is going to be pulled in many different directions at once. There may be a significant time crunch, and emotions are almost certainly going to be running high.

When you start early, you can help assure that there is ample time to talk without distractions. Everyone will be in a better position to focus in together, and all parties involved are likely to be more receptive and open to talking.

To help get the conversation underway, you may wish to look for icebreakers. As writer Jessica L. Anderson puts it for Kiplinger, “you could use recent news or a friend’s story as a way into the conversation.” Consider bringing up a story you heard on local or national news; talk through a family story that your loved ones experienced firsthand; or consider browsing our website for some all-too-common scenarios that are worth considering.

Be patient, and be ready to start and stop these conversations multiple times. Don’t expect to handle everything in one sitting. Instead, focus on starting a dialogue that you can pick up as needed in the weeks, months, and years to come.

4.) Talk Face-to-Face In a Comfortable Environment

These daunting discussions may be a lot easier when you can be together in-person — though in these unusual times, talking over Zoom or FaceTime may be an acceptable substitution.

Try to create a safe, open, and comfortable environment where everyone can focus on the matter at hand, rather than all the other little distractions that may get in the way. If necessary, consider working with your loved ones to lay down some simple “ground rules” for courtesy — such as “no one speaks over each other” or “what is said in this room stays here.”

Know that emotions may run high. Try to be as patient, empathetic, and willing to listen as you can. Recognize when people are hitting their limits, and be ready to let things go. If it helps, you may wish to take some time ahead of stressful conversations to refresh yourself on breathing exercises, stretches, and other methods that can help you manage stress, anger, or anxiety.

5.) Bring In a Local Estate Planning Expert to Make Things Easier

Having a mediator on hand may help keep the conversation moving forward and allow discussions to be truly productive. While a family friend, a religious leader, or another trusted and impartial third party can help with the early conversations, an experienced local attorney is one of the most effective partners for helping to guide the process forward. A probate and estates attorney can help you understand all of the tools and considerations that go into estate planning, while taking into account the unique variables of your situation and helping to ensure that all legal formalities are addressed.

Start the Conversation with Metro Detroit’s Probate and Estate Planning Attorneys

You can depend on our law firm’s ability to listen to you and our talent for creative strategies as we help you prepare your estate plan and navigate probate matters, including (but not limited to) general probate litigation, wills and trusts contests, beneficiary disputes, guardianships, and conservatorships.

Closing and Reopening a Decedent Estate in Michigan

Patrick & Associates, PLLC — Mon, 07 Sep 2020 05:50:44 GMT

If you are currently facing the legal aftermath following the passing of a loved one, you are sure to have questions. Whether you are an heir, a beneficiary, or have been named as a personal representative, it’s important to understand the ins and outs of the process that the deceased’s estate succumbs to in the Michigan courts — including what it takes to close or reopen a decedent estate.

Broadly speaking, the process of estate administration involves filing the deceased’s will, if there is one, with the courts. After this, a personal representative will be appointed to oversee the handling and distribution of the estate, including:

Gathering the assets of the estate and determining their value
Paying the decedent’s debts and final expenses from the estate
Distributing any remaining assets to the appropriate parties, in line with the decedent’s wishes and all relevant laws

In Michigan, there are a few different ways for estate administration to proceed. “Formal” probate proceedings are those that occur in front of a judge, with notice served to interested persons; “informal” proceedings mean that the probating of a will or the appointment of a personal representative are conducted by the probate register, without notice to interested persons.

Generally speaking, formal proceedings are desirable in situations where the estate administration process will be confusing, unclear, or contentious — particularly if there is a conflict among interested parties. Informal proceedings are used in situations where the probate process is expected to be somewhat simpler or more straightforward. Informal proceedings typically take less time to complete, and generally afford the personal representative more consultationdom to make decisions on behalf of the estate without having to receive approval from the courts.

Estate administration may also be “supervised,” in some cases. Supervised administration refers to a single, comprehensive formal proceeding to secure complete administration and settlement of the decedent’s estate under the court’s continuing authority — extending until the entry of an order approving estate distribution and discharging the personal representative, or another order terminating the proceeding.

Once the core responsibilities of the personal representative have been completed, and any legal issues and complications have been resolved, the estate can be closed. If previously unknown assets are discovered or an unforeseen new circumstance arises down the line, the estate may be reopened by the personal representative, or another interested person.

Closing a Decedent Estate in Michigan

In Michigan, there are a few specific processes that can be used to close a decedent’s estate, depending on the unique circumstances of the situation — such as whether the administration of the estate was supervised or unsupervised by the courts, or if the estate was testate or intestate (that is, whether or not the deceased left a valid will, or if he or she left the distribution of their assets up to Michigan’s rules for intestate succession).

Broadly speaking, the two primary ways to close a decedent’s estate are through a petition or a sworn statement.

Petition for Complete Estate Settlement

If an estate is being administered as a supervised estate, it must be closed by a petition for an order of complete estate settlement. An unsupervised estate may also be closed by petition, whether it was originally opened formally or informally.

A petition for estate settlement may include an adjudication of testacy, meaning that the petitioner is requesting the court to determine testacy, if it has not previously done so.

Either a personal representative or an interested person may petition for an order of complete estate settlement. The personal representative may petition at any time, though the petition may only be accepted after the window for presenting a claim has expired. An interested person may petition after one year from the original personal representative’s appointment.

This petition may compel the court to consider the final account; to compel or approve the personal representative’s accounting and distribution of the estate; to construe a will (or determine heirs, in the case of intestacy); and to adjudicate the estate’s final settlement and distribution. After providing notice to all interested persons and holding a hearing, the court may enter an order to determine the persons entitled to distribution of the estate; approve settlement; direct or approve estate distribution; and discharge the personal representative from further claim or demands.

Sworn Statement

A personal representative may also close an estate through a sworn statement in unsupervised proceedings, unless prohibited by court order. This statement can be filed beginning five months after the date of the general personal representative’s original appointment, to allow time for presentation of claims.

In order to close the estate, this sworn statement must state that the personal representative (or a previous personal representative) has:

Determined that notice was published and that the time limited for presentation of creditors’ claims has expired
Fully administered the decedent’s estate by distributing the estate property to the persons entitled, and paying or settling all claims; administration and estate expenses; and taxes (such as inheritance and estate taxes). If a claim remains undischarged, the sworn statement should detail any arrangements that have been made to accommodate outstanding liabilities
Sent a copy of the statement to all estate distributees and to all creditors or other claimants of whom the personal representative is aware
Furnished a full account, in writing, of the personal representative’s administration to the distributees whose interests are affected by the administration — including the amount paid out of the estate in fiduciary fees, attorney’s fees, and other professional fees

A sworn statement can also be used to close a small estate administered through summary administration, any time after disbursement and distribution of the estate. This statement must state that:

The value of the entire estate, less liens and encumbrances, did not exceed administration costs and expenses, reasonable funeral and burial expenses, homestead allowance, family allowance, exempt property, and reasonable, necessary medical and hospital expenses, to the best knowledge of the personal representative
The personal representative has fully administered the estate by disbursing and distributing it to the persons entitled
The personal representative has sent a copy of the closing statement to all estate distributees and to all creditors or other claimants of whom the personal representative is aware, and has furnished a full account in writing of the estate administration to the distributees whose interests are affected

If an objection to the sworn statement is not filed within 28 days after the filing date, the register will issue a certificate of completion, stating that the personal representative appears to have fully administered the estate in question. However, it’s important to understand that this does not necessarily preclude further actions and proceedings against estate distributees or the personal representative, though actions must be taken with an appropriate window of time.

If you have any questions about closing an estate or attempting to recover from a personal representative or distributee — particularly on the grounds of fraud, misrepresentation, or inadequate disclosure — it is important to consult with an experienced probate litigation attorney, who can help you understand all of your options and take the appropriate steps based on your circumstances.

Reopening a Closed Estate

Michigan law makes allowances for “subsequent administration” — that is to say, the reopening of a previously closed estate.

Broadly speaking, an estate may be reopened after the personal representative has been discharged, or if one year has passed since a closing statement was filed. An estate may be reopened if new estate property is discovered after settlement, or if there is “other good cause” to reopen the previously administered estate — for example, if it is discovered that the estate was improperly closed or administration was left incomplete, for one reason or another.

Any interested person, including the prior personal representative, may seek to reopen a previously closed estate. There are two methods by which an interested person can seek to have an estate reopened: by petition, or by application. Generally speaking, a petition will require a court hearing, while an application will not. If the estate was administratively closed as a supervised estate, the case can only be reopened by a petition requesting supervised administration.

The court may appoint the same personal representative or a successor to administer the reopened estate. Generally speaking, the personal representative has the same duties for a reopened estate as they would for any other estate — determining if the decedent had a will that was not offered for probate in the previous administration; gathering estate assets, determining their value, and filing an inventory; determining if there are taxes that must be paid; preserving and distributing estate assets to the appropriate parties; keeping a close record of income and disbursements from the estate; and closing the estate through the appropriate methods.

It is also worth noting that any previously barred claims cannot be asserted in a subsequent administration.

Have Any More Questions About Guiding an Estate Through the Michigan Probate Courts?

Seeking assistance and support as you navigate through the Michigan probate courts? Our probate and estate attorney Dean E. Patrick is ready to stand with you.

Mr. Patrick has years of experience as a practicing attorney and is ready to aggressively fight for you — with the skills, experience, and dedication that your legal matter deserves.

At every step of the way, Mr. Patrick can provide reliable professional advice tailored to the specifics of your situation, whether you are a personal representative, an heir, a creditor, a named beneficiary, or a person who knows the deceased was taken advantage of before their death.

The Patrick & Associates, PLLC. is available 24/7. Whatever your situation, Mr. Patrick is keen on hearing your circumstance and even keener in finding a solution to a desired outcome.

Interested in getting the conversation started? Contact Dean E. Patrick at his Southfield, Michigan office at (248) 663-2566 or click here to arrange your initial consultation.

What Are the Differences Between Heirs, Beneficiaries, and Devisees?

Patrick & Associates, PLLC — Mon, 31 Aug 2020 14:11:49 GMT

What’s the difference between an heir and a devisee? Do you know what it means to be the beneficiary of a trust? Whether you are getting started with estate planning or facing the legal aftermath following a loved one’s passing, you’re sure to encounter many unfamiliar terms and concepts along the way.

One area where there is often some confusion? In Michigan, you may come across a few different terms to refer to people who inherit or receive property from a deceased person — including heir, devisee, and beneficiary.

While they may have some overlap depending on the unique circumstances of your situation, these three categories refer to three different ways that someone may receive property from a decedent:

“Heir” generally refers to a person who is entitled to receive the decedent’s property under the statutes of intestate succession, the distribution process that occurs when someone passes away without a will.
A “devisee” is any person designated to receive real or personal property in a decedent’s will.
“Beneficiary” is a broad term, and may refer to a person who receives property from a trust, or anyone who receives the proceeds of an insurance or annuity policy, pension, financial account, or security with a designated “transfer on death” or “pay on death” beneficiary. This generic term also encompasses devisees, as well as donees, appointees, and any person “in whose favor a power of attorney or power held in an individual, fiduciary, or representative capacity is exercised.”

Let’s explore each of these important concepts in a bit more depth, and examine how they may come into play during estate estate planning and administration:

Heirs

Broadly speaking, an heir is going to be related to the decedent through blood, marriage, or adoption.

An heir is anyone who would stand to inherit from the estate of the decedent if they were to pass away without a valid or complete will. In such a situation, Michigan’s statutes for intestate succession apply.

Under Michigan law, there is a particular order of succession by which heirs stand to inherit when an individual dies intestate — as well as guidelines for how much each party might ultimately receive from the decedent’s estate.

Generally speaking, Michigan law gives highest priority to the surviving spouse of the decedent, followed by their children and grandchildren; then their parents, siblings, nieces and nephews; and then more distant relatives. If the decedent is not survived by any heirs, then the contents of the estate will ultimately pass to the state.

The rules for intestate succession are complex, and the process can be long and difficult — particularly if there needs to be a determination of heirs. A probate attorney can help you understand the nuances of intestate succession, and how Michigan statutes may apply in your circumstances.

Want to control the distribution of your assets and streamline things for your loved ones down the line? Whatever stage of life you’re currently experiencing, an experienced estate planning attorney can help you take action to maintain control. Setting down a plan for your most important assets can help ensure that they will be distributed in a manner appropriate for your circumstances, while minimizing the risk for disagreements and confusion among family members after you’re gone.

Devisees

A “devisee” means a person designated in a will to receive a devise, which is defined as “a testamentary disposition of real or personal property.”

Whereas heirs will always be family to the deceased, anyone named in a decedent’s will is considered a devisee — including friends, co-workers, and so on.

A will is a powerful way to help you maintain control, even when you’re gone. For example? Let’s say Pat is unmarried and has no children, but has two siblings, Alex and Sam. Pat is close with Alex, but broke off contact with Sam decades ago due to a bitter personal conflict. Under the statutes of intestate succession, Alex and Sam would both receive an equal amount of Pat’s estate. A properly executed will can help Pat ensure that Alex receives a larger share, in line with her wishes, while disinheriting Sam.

In addition, a will can help assure that someone you can rely on is appointed to handle your assets and affairs, while also ensuring that your children will have a guardian of your choosing if you are unable to raise them. Along with other estate planning mechanisms, a will is also a way to help make sure that your partner has the assets and control you want them to have.

Keep in mind that a will is subject to jurisdiction by the probate court, and a will, if there is one, must be admitted to court for estate administration to begin. A will can be contested by any interested person — including, but not limited to, an heir, a devisee named in the will, a spouse, or a child of the decedent. Grounds for contesting a will include undue influence, fraud, incapacity, improper execution, or forgery.

If you are facing the possibility of having to defend or contest a will in the Michigan probate courts, it’s important to bring on an experienced legal professional, who can help you understand your options and aggressively advocate for your position in any contested probate matter.

Beneficiaries

“Beneficiary” is a very broad and general term. While it can be used to refer to any devisee or distributee, there are a few circumstances where “beneficiary” takes on a more significant and unique meaning — particularly in relation to nonprobate assets, such as trusts and beneficiary designations.

Probate assets are those that are included as part of the decedent’s estate, subject to court proceedings when he or she dies. Most typically, this refers to property and assets that are owned solely by the decedent, without any co-owners or designated beneficiaries. Nonprobate assets are those that experience a nontestamentary transfer on death. Most commonly, this category includes assets with a co-owner who is legally entitled to the property; assets with a beneficiary or payable-on-death designation; and assets held in a revocable living trust.

Assets with that are set up with a designated beneficiary — typically known as a “pay on death” (POD) or “transfer on death” (TOD) beneficiary — are transferred directly to the named beneficiary (or beneficiaries) upon the death of the account owner or policy holder, outside of probate. Common examples of assets with beneficiary designations include retirement accounts, life insurance policies, bank accounts, investment accounts, pension plans, and other securities.

A trust beneficiary is a person who has a present or future beneficial interest in a trust, vested or contingent. A person may also be considered a trust beneficiary if they hold “power of appointment” over trust property in a capacity other than as trustee or trust director.

Trusts and beneficiary designations are important components of the estate planning process to keep in mind. There are many different types of trusts that can be utilized to help you meet your goals. Consulting with an experienced estate planning attorney about trusts, beneficiary designations, and other types of nonprobate transfers can help you to maximize the assets available to your beneficiaries when you have passed, minimize or eliminate the cost of probate fees, allow for immediate distribution of your assets, and help ensure that inheritance does not become a detriment to your beneficiaries.

Like wills, trusts and beneficiary designations can be contested, under certain circumstances. For example, an interested party can pursue litigation in order to terminate, modify, or reform a trust, or dispute the actions of a trustee.

If you are facing the need to contest or defend the validity of a trust or the actions of a trustee, do not hesitate to get in touch with an experienced probate litigation attorney to get the expert guidance your matter deserves.

Want to Discuss Any Element of Michigan Estate Planning and Probate?

Interested in learning more about the differences between heirs, beneficiaries, and devisees, and how each of these important concepts may affect you? Curious about any aspect of estate planning, or the legal process your estate may succumb to in court during probate?

Whether you are currently dealing with the legal aftermath following the passing of a loved one, or are ready to find ways to make estate administration more efficient for your friends and family down the line, our firm is here and ready to help.

At the Patrick & Associates, PLLC., we put our legal experience and skills together with our commitment to excellence in representing your rights. You can depend on our law firm’s ability to listen to you and our talent for creative strategies as we help you navigate estate planning and probate, including (but not limited to) general probate litigation, wills and trusts contests, beneficiary disputes, guardianships, and conservatorships.

Have any more questions? Ready to get started? Our staff is available 24/7 to answer any questions and help you with your legal matters. Contact Dean E. Patrick at his Southfield office at (248) 663-2566, or click here to arrange your initial consultation.

Can You Contest the Beneficiary Designation on a Life Insurance Policy or Retirement Account?

Patrick & Associates, PLLC — Mon, 24 Aug 2020 04:17:15 GMT

Here in Michigan, many people use beneficiary designations as a way to transfer some of their most important assets outside of probate — including retirement accounts, life insurance policies, annuities, brokerage accounts, bank accounts, and other securities.

Indeed, for many estates, these nonprobate assets can constitute a large portion of what the decedent distributes to their loved ones.

Accounts with a beneficiary designation can have many advantages. They can help to streamline the probate administration process, and make it easier and quicker for your loved ones to start accessing necessary funds during a difficult transition. However, it’s important to keep in mind that transferring assets to a beneficiary through a “pay on death” or “transfer on death” designation is not always going to be seamless. There is certainly room for issues to arise — including disputes and contests to the beneficiary designation.

Individuals may seek to contest a beneficiary designation on an IRA, life insurance policy, or other account for any number of reasons. However, while it is possible to contest a beneficiary designation, it’s crucial to note that this process isn’t always cut-and-dry. This will be a legal matter, and will require working with an experienced attorney who can help you get a handle on the situation, understand all of your options, and represent your interests in court should it become necessary.

Beneficiary Designations and Nonprobate Transfers

When executed properly, a beneficiary designation allows for the assets in an account or the proceeds of a policy to transfer directly to any named beneficiaries upon the death of the account owner or policy holder. Such a transfer is non testamentary, meaning that it can occur outside of probate.

The designation of a POD or TOD beneficiary does not affect the ownership of the asset until the owner’s death. While still living, the account or policy owner may usually change or cancel the registration of a security in beneficiary at any time, without needing the consent of the beneficiary.

Broadly speaking, many registration forms will allow the policy holder to name both primary and contingent beneficiaries, while also planning ahead for substitution (meaning that a deceased beneficiary’s descendants will divide their share, in accordance with Michigan’s laws of intestate succession). If the account owner names multiple beneficiaries, they will also generally be able to select what percentage of the asset each designated beneficiary should receive.

Upon the death of the sole owner (or the last to die of all multiple owners), the ownership of securities registered in beneficiary form passes to the designated beneficiary or beneficiaries. Generally speaking, in order to transfer the assets, the beneficiary must present proof of death and act in compliance with any applicable requirements of the registering entity (e.g., the insurance company or financial institution).

Importantly, Michigan’s Estates and Protected Individuals Code (EPIC) makes clear that registrations in beneficiary form are largely governed by the terms and conditions set down by the financial company. Michigan statutes state that a registering entity,

may establish the terms and conditions under which it will receive requests for registrations in beneficiary form or for implementation of registrations in beneficiary form, including requests for cancellation of previously registered TOD beneficiary designations and requests for preregistration to effect a change of beneficiary. The terms and conditions so established may provide for proving death, avoiding or resolving a problem concerning fractional shares, designating primary and contingent beneficiaries, and substituting a named beneficiary’s descendants to take in the place of the named beneficiary in the event of the beneficiary’s death.

Challenging a Beneficiary Designation

When an account owner or policy holder passes away and their beneficiary designations are revealed, it is not uncommon for some complicated questions to come up — and with them, the potential for significant disputes and disagreements.

What if the policy holder’s beneficiary designation for a life insurance policy is an ex-spouse, whom they haven’t spoken with in years?

What if a life insurance policy is changed in the last few months of an elderly person’s life, to significantly benefit a new caretaker or significant other they’ve only known for a very short period of time?

What if the actual beneficiary on a securities account doesn’t match up with the wishes that your dad stated multiple times in person?

What if one child benefits from a parent’s substantial CD or brokerage account, while their siblings are all but forgotten?

These situations are more common than you might think — and they reveal the potential pitfalls involved in executing beneficiary designations. To add fuel to the fire, remember that these designations broadly rely on terms agreed upon between the account holder and their financial institution. The types of documentation used and the levels of formal oversight required are not necessarily going to be standardized from place to place.

In some cases, issues may arise from simple human error. Many people do not give beneficiary designation decisions the appropriate weight they deserve when opening an account or creating a new policy. Others may be lax about updating their designations when their personal circumstances change, or fail to consider how their beneficiary designations will fit in as part of their overall estate plan.

Generally speaking, in order to contest a beneficiary designation, the individual must have a valid legal claim to do so. People with standing may include an heir who would benefit under intestate succession, a trust beneficiary, or a fiduciary acting on behalf of the decedent, such as a trustee or personal representative.

In order to challenge a beneficiary designation, the claimant must be able to prove that the designation does not accurately reflect the decedent’s wishes. A beneficiary designation may be contested under some of the same grounds as a will or trust contest, including:

Improper execution (e.g., errors, omissions, and mistakes on forms)
Lack of capacity (e.g., the account owner did have sufficient mental capacity to understand their actions when executing a beneficiary designation)
Undue influence or duress (e.g, the account owner or policyholder was manipulated or coerced into signing against their wishes)
Fraud (e.g., the individual was deliberately tricked or misled into signing a document due to misrepresentation)
Forgery (e.g., falsified signatures or documents)

If you believe that there are grounds to challenge a beneficiary designation, it’s important to act quickly — while bearing in mind that contesting such a matter can be complex and time-intensive to wade through. Ultimately, disputing a beneficiary designation is a legal matter, requiring the specialized skills and knowledge of legal counsel who can help you to determine the validity of your claim and advocate for your position, whether you seek to resolve the matter through negotiation and mediation, or by taking the matter to court.

The Importance of Working With an Experienced Probate Attorney

When you have a foot problem, you go to the podiatrist. When you have a heart problem, you go to the cardiologist. When you need to create an estate plan or are facing a situation that will involve the Michigan probate courts, you need to go to an established probate and estate planning attorney.

In Michigan, an experienced and knowledgeable attorney can assist…

When You Need to Challenge or Contest a Beneficiary Designation

If you believe that you have standing and are considering disputing a registration in beneficiary form, an attorney can carefully evaluate the details of your case and explain the best course of action. An experienced legal professional can help you gather the facts, perform due diligence, and understand the unique variables of your situation — including if you do indeed have a valid claim. Moving forward, an attorney can hone a strategy to work toward the best possible outcome in your situation.

Whatever your circumstances, remember that contesting a beneficiary designation can be complex and trying. It’s easy to feel overwhelmed. Working with an experienced probate litigation attorney can make this process easier, giving you the guidance, insight, and legal support you need to move forward with confidence and peace of mind at every step of the way.

Avoiding Issues Through Meaningful Estate Planning

Want to maintain control of your most important assets, make things simpler for your loved ones, and minimize the risk for family arguments and disagreements when you’re no longer around? An experienced estate planning attorney can help you achieve these important goals.

In many cases, you can reduce the likelihood that a beneficiary designation will be challenged through comprehensive and mindful planning. Your estate planning attorney can help you take all steps needed to ensure that you keep control, even when you are unable to speak on your own behalf. Which instruments are used will depend on the specifics of your circumstances.

Whether you are just getting started with estate planning or wish to assess the plans you already have in place, an attorney can help you review and update the beneficiary designations on your policies and accounts, to help make sure that your most important assets will be distributed in a manner appropriate for your circumstances. Keeping your estate plan current and accurate can help ensure that an inheritance won’t become a detriment to your beneficiaries. Thoughtful planning can maximize the assets available to your beneficiaries when you have passed and allow for immediate distribution of your assets, while minimizing or eliminating the cost of probate fees — and granting you peace of mind knowing that you lessened the stress of your circumstances for your family.

Looking for Answers About Michigan Beneficiary Disputes? Ready to Keep the Conversation Going?

We know these situations can be stressful; with the right legal representation, you can get through it. Our attorney Dean E. Patrick has experience handling beneficiary disputes and will act on your behalf to work toward the best possible outcome in your situation. Our law office can help you to resolve your dispute in a professional, timely manner and give you outstanding support along the way.

Interested in taking steps to make this process more efficient for your loved ones down the line? Mr. Patrick can also help you set a plan for you and your loved ones. His knowledge of Michigan probate law ensures you will get the legal help you need when it’s time to take care of your estate planning, including wills, trusts, beneficiary designations, and powers of attorney.

At the Patrick & Associates, PLLC., we put our legal experience and skills together with our commitment to excellence in representing your rights. You can depend on our law firm’s ability to listen to you and our talent for creative strategies as we help you navigate probate, including (but not limited to) general probate litigation, will and trusts contests, beneficiary disputes, guardianships, and conservatorships.

Have any more questions? Ready to get started? Contact Dean E. Patrick at his Southfield office at (248) 663-2566, or click here to arrange your initial consultation.

Understanding the Important Responsibilities of a Trustee

Patrick & Associates, PLLC — Tue, 09 Jun 2020 04:20:41 GMT

Dealing with the legal aftermath of a loved one’s passing can become complex, emotional, and time-consuming — particularly if you are named to serve as a trustee during the administration of your loved one’s estate.

Put simply, a trustee is the person responsible for managing and distributing any of the assets held in a trust, while also handling several important duties that may arise during the course of trust administration — including overseeing tax filings for the trust and communicating with beneficiaries of the trust.

A trustee is a fiduciary, meaning that they are held to a high legal standard of conduct. In executing his or her duties, a trustee is expected to put the needs of the trust and its beneficiaries above their own. To be a fiduciary means serving with “undivided loyalty,” remaining impartial, being careful and prudent in their actions (including making investments on behalf of the trust), and keeping trust assets separate from their own.

Interested in learning more about this important role? Let’s explore some important FAQs about trustees in Michigan:

What Is a Trust?

A trust is a written agreement created by a settlor or grantor that names an individual who is responsible for managing property as directed by the trust agreement. This person is the trustee. The settlor may also add successor trustees, who would take on the responsibilities of the trustee should the original choice be unable to do so.

Trusts are a popular estate planning tool because they can allow certain assets to bypass administration in the courts —which can help simplify and streamline the probate process, while also helping shield the privacy and finances of the decedent and their family. Trusts are also growing in popularity because they are dynamic, and can help give the decedent a high level of control over their assets and beneficiaries, even after they’re gone — from determining when and how a beneficiary may receive their inheritance, to designating what funds should be set aside for charity or even the care of a pet.

There are many different types of trusts which can be used to suit your needs. An experienced probate attorney can assist you on choosing what option is the best fit for your circumstances, estate, and beneficiaries.

Broadly speaking, the most popular type of trust in the U.S. is known as the inter-vivos or revocable living trust. One of the practicalities of creating such a trust is that you would typically assign yourself as the trustee. This way, you remain in complete control of your trust assets for as long as possible. In the event that you can no longer perform your duties, the responsibilities would legally be granted to your successor trustee.

For this reason, it’s important to nominate a successor trustee who can handle the responsibilities, abide by your wishes, and follow the directions set down by the structure of your trust. Many people choose a spouse or a trusted family member to serve as trustee; you may also name a professional, such as an attorney or financial consultant.

What Are the Responsibilities and Duties of a Trustee?

The Michigan trust code states that upon acceptance of a trusteeship, the trustee shall “administer the trust in good faith, expeditiously, in accordance with its terms and purposes, for the benefit of the trust beneficiaries, and in accordance” with the law.

More specifically, a trustee has several important duties and legal obligations to execute, including:

The Duty of Loyalty

The duty of loyalty states that a trustee shall administer the trust solely in the interests of the trust beneficiaries, and avoid conflicts between the trustee’s fiduciary and personal interests — particularly involving the investment and management of trust property. Crucially, a sale, encumbrance, or other transaction involving the trust property may be presumed to be affected by a conflict if it involves the trustee’s spouse or another family member, an agent or attorney of the trustee, or a corporation or enterprise in which the trustee owns a significant interest that might affect their best judgment.

Managing, Controlling, and Distributing Trust Property

A trustee has many key responsibilities involving trust property, including:

Taking reasonable steps to control and protect the trust property — using general powers that are appropriate to achieve its proper investment, management, and distribution
Following the standards of Michigan’s prudent investor rule
If the trustee has special skills or is named trustee on the basis of their skills or expertise, the have a duty to use those skills for the benefit of the trust
Keeping adequate records of the administration of the trust
Keeping trust property separate from their own property
Taking reasonable steps to enforce claims of the trust (and defend claims against the trust)
Taking reasonable steps to locate trust property, including compelling another person to deliver property to the trustee
Responding to tax matters affecting the trust
Following proper procedures for terminating the trust and making distributions

Duty to Inform and Report

A trustee is obligated to keep qualified trust beneficiaries reasonably informed about the administration of the trust, and any material facts that are necessary for them to protect their interests. Broadly speaking, trustees must respond promptly to a trust beneficiary’s requests for information. If requested by a beneficiary, a trustee should also be able to promptly furnish a copy of the terms of the trust that describe or affect the beneficiary’s interest, and relevant information about the trust property.

Trustees are also required to send out notices when they accept the trusteeship, or if there are any changes to their rate or methods of compensation.

At least once per year and at the termination of the trust, the trustee must also send a thorough report of the trust property, liabilities, receipts, and disbursements, including details of their compensation as a trustee, and a list of all trust property and its market value.

Can More Than One Person Act as a Trustee?

Yes, a settlor may nominate more than one person to serve as trustee. These parties may act as cotrustees or as separate trustees. Broadly speaking, cotrustees oversee the administration of the entire trust together, and act by majority decision. A separate trustees provision causes trusteeship of the aggregate trust to be divided into multiple sets of fiduciary responsibilities, each allocated to a separate trustee. An example may be having one trustee who oversees investments, and another who manages distributions.

Do I Have to Accept the Position?

A person appointed as a trustee or successor trustee has the option of accepting or rejecting the role.

Under the Michigan trust code, a person designated as trustee accepts the position by either

substantially complying with a method of acceptance provided in the terms of the trust, or
accepting delivery of the trust property, exercising powers or performing duties as trustee, or otherwise taking action indicating acceptance of the trusteeship

A person designated as a trustee who has not yet accepted the trusteeship may reject the responsibility. A person who is serving as trustee may also resign from the position, provided that they provide at least 28 days’ notice to qualified trust beneficiaries, the holders of powers of appointment,and all cotrustees, and have the approval of the court.

If a trustee rejects or resigns from the trusteeship, this leaves a vacancy which is typically filled in order of priority — first in the manner designated by the terms of the trust, and then by a person appointed by the court, if necessary.

Can a Trustee Be Removed?

There may be times when beneficiaries may need to contest the actions of a trustee, which can include having them removed from the trusteeship. Broadly speaking, a settlor, a cotrustee, or a qualified trust beneficiary may request the court to remove a trustee, or a trustee may be removed by the court on its own initiative.

There may be grounds for removal of a trustee if:

The trustee commits a serious breach of fiduciary duty
Lack of cooperation among cotrustees substantially impairs the administration of the trust.
The court determines that removing the trustee would be in the trust’s best interest, generally because of their unfitness, unwillingness, or persistent failure to administer the trust effectively
There has been a substantial change of circumstances, and the court finds that removal of the trustee best serves the interests of the trust beneficiaries, is not inconsistent with a material purpose of the trust, and a suitable cotrustee or successor trustee is available

A trustee who has resigned or been removed must proceed to promptly deliver the trust property in their possession to the cotrustee, successor trustee, or another person entitled to it.

Before removing the trustee, the court may take other steps to remedy a breach of trust that has occurred or may occur, including (but not limited to):

Compelling the trustee to perform their duties
Compelling the trustee to redress a breach of trust by paying money or restoring property
Ordering a trustee to account
Appointing a special fiduciary to take possession of the trust property
Suspending the trustee
Reducing or denying compensation to the trustee

If you suspect that a fiduciary has committed a breach of fiduciary duty, it is imperative to consult with an experienced probate litigation attorney who can help you understand what steps you may take, and aggressively advocate for your position in a contested probate matter.

Can a Trustee Be Compensated?

A trustee is entitled to be compensated. If the terms of a trust do not specify the trustee’s compensation, a trustee is entitled to compensation that is reasonable under the circumstances. If the terms of the trust do specify the trustee’s compensation, the court may allow more or less if the duties of the trustee are substantially different that what would have been expected when the trust was created, or if the compensation specified would be unreasonably low or high.

A trustee may also be entitled to be reimbursed out of the trust property, with interest as appropriate, for expenses that were properly incurred in the administration of the trust, or to the extent necessary to prevent unjust enrichment of the trust (for expenses not properly incurred in the creation of the trust).

Probate and Estate Administration Can Be Complex. You Don’t Have to Go Through It All Alone

Whether you are thinking ahead to the creation of your estate plan or have been named to serve as a successor trustee for a family member, you probably have questions.

If you have accepted the responsibilities of administering a trust, our experienced trust attorney Dean E. Patrick can provide informed professional advice to guide you through the legal process, explain your obligations as a fiduciary, and help you discharge your duties in an efficient and expedient manner to avoid personal liability. And if a contest should ever arise, Mr. Patrick can help right the ship, drawing from his extensive experience with litigating contested probate matters. Mr. Patrick has years of experience as a practicing attorney and is ready to aggressively fight for you.

If you are considering a trust as part of your overall estate plan, Mr. Patrick can help you dot the “i’s” and cross the “t’s.” Mr. Patrick would be happy to help you consider the potential benefits of different types of trusts, and assist in the creation of a trust that works for your unique situation — while ensuring that all legal formalities are addressed.

Have any more questions about the role of the trustee in Michigan? The Patrick & Associates, PLLC. is available 24/7. Whatever your situation, Mr. Patrick is keen on hearing your circumstance and even keener in finding a solution to a desired outcome. Contact Dean E. Patrick at his Southfield, Michigan office at (248) 663-2566 or click here to arrange your initial consultation.

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