Attorney - Patrick & Associates, PLLC

Important Considerations for Funding a Living Trust

Patrick & Associates, PLLC — Mon, 29 Mar 2021 04:41:17 GMT

A revocable living trust — also known as an inter-vivos trust — is a useful estate planning mechanism for many reasons. Living trusts can be used to help assets avoid probate, protecting your family’s privacy while helping them to avoid court fees and oversight. Living trusts also afford you a significant level of control, even after you become incapacitated or pass away.

With that being said, there are several common errors that can prevent your trust from reaching its full efficacy. One of the most common trust errors is to leave the trust as an “empty vessel” by not properly re-titling assets into it when you have the chance. Let’s explore some of the important considerations for funding a living trust to know during Michigan estate planning:

What Is a Living Trust? A Brief Overview

A trust is a written agreement created by the settlor or grantor, which names an individual who is responsible for managing trust property, as directed by the trust agreement. This person is known as the trustee. A revocable living trust allows the settlor to maintain control of their assets during their lifetime, and modify or revoke the trust at any time.

The revocable living trust is one of the most popular types of trusts in the United States, because it offers many benefits appealing to a range of individual circumstances.

For instance, placing assets into a living trust can allow them to pass to your beneficiaries without having to go through the oversight of the probate courts. This can save time, money, and stress for your loved ones during the estate administration process, and can help protect your family’s privacy. Crucially, establishing a trust can also offer you a great deal of control over your assets, both while you are living and after you have passed. A trust can be a straightforward way to set aside assets in order to care for a minor, or a dependent with special needs. Trusts can also enable you to set down rules, requirements, and restrictions for your beneficiaries, controlling conditions for if, how, and when they may receive their inheritance.

The creation of a trust can also help protect your estate from certain taxes and fees, which might ultimately allow you to provide more for your beneficiaries.

There are many important considerations to be addressed in the creation of a trust, so that it is designed to your specifications and in line with all necessary legal formalities. One of the practicalities involved in creating a trust, for example, is appointing the trustee, along with one or more successor trustees, who will take on the responsibilities of managing the trust if the primary trustee is unable to do so. Typically, the settlor will act as the trustee for as long as they are living, with a designated successor trustee stepping in after their death.

Another crucial yet frequently overlooked consideration is taking care to properly fund the trust with the assets that you choose; otherwise, it will remain an empty vessel, and may not provide any of the advantages or opportunities that we discussed above.

Don’t Leave an Empty Vessel: What Goes Into Funding a Trust?

Once the trust is created, it is essential to re-title your selected assets into the trust.

As you consider the ins and outs of properly funding a living trust, there are a few important considerations to discuss with your estate planning attorney — an important partner who can help ensure that your trust is complete, and designed to ensure that your wishes will be executed as you see fit.

One of the most important things to discuss with your estate planning attorney is which of your assets should be used to fund the living trust, and which should not.

Broadly speaking, many important assets can be transferred into a trust, including but not limited to:

Real estate (including property that is mortgaged)
Business interests
Investments and securities
Valuable personal property (such as artwork, antique furniture, precious metals and jewelry, or private collections)
Bank accounts and holdings

An attorney can help you assess and understand your unique circumstances, and take appropriate actions based on the specific variables of your situation.

For instance, if you have real estate that should be transferred into a trust, your attorney can help you execute the proper paperwork to ensure that you successfully transfer the property into the name of the trust. An attorney can help you understand which methods to use for your situation, and take steps to ensure that all paperwork is filed properly. An attorney can also offer keen insight into variables you might overlook on your own; for instance, if you own real property in multiple states, an attorney can help you take steps to prepare for the possibility of ancillary probate. An attorney can also offer their experienced perspective on next steps when it comes to taxes, title insurance, mortgages, and other important practicalities that go hand-in-hand with owning or transferring real estate in Michigan.

For property that may not be titled — such as valuable family heirlooms or an antiques collection — an attorney can help you draft documents that properly transfer the assets into your trust. An attorney may also help you consider whether to take advantage of a pour-over will, a mechanism that helps to “pour” all of the estate assets that pass through your will directly into a previously created trust at your death.

An attorney can also help you understand alternative mechanisms for transferring assets such as motor vehicles and financial accounts, such as naming a transfer on death or payable on death beneficiary for bank accounts and mutual funds, or utilizing joint tenancy with rights of survivorship for titled property — both of which can enable assets to be transferred outside of probate.

It is also important to understand the difference between transferring assets into a trust, and naming the trust as a beneficiary. A knowledgeable and savvy estates and probate attorney can help you consider the best course of action for your unique situation, based on your assets, your goals, and any specific individual challenges that you may be facing.

Looking for Assistance with Trust Creation, Administration, or Issues?

Similarly, if you are a trustee, personal representative, or otherwise involved in the administration of an estate, last will, or trust, you probably have questions. An experienced probate and trust 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.

Our probate and trusts attorney Dean E. Patrick has years of valuable experience helping those in the Metro-Detroit area establish, administer, and litigate trust estates. If you have questions on trusts or other estate planning matters, contact Dean E. Patrick at his Southfield, Michigan office at (248) 663-2566 or click here to arrange your initial consultation.

Mr. Patrick is a licensed Michigan lawyer with a focus in probate law. He has the legal counseling skills, experience, and dedication that your legal matter deserves. Whether you are looking for a probate attorney, an estate planning attorney, or need legal advice when dealing with these emotional issues, you can trust our office to guide you through the process and deliver results.

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 Does “Protected Individual” Mean in the Michigan Probate Courts?

Patrick & Associates, PLLC — Mon, 22 Mar 2021 04:20:12 GMT

In a previous post for this site, we explored a bit of the history and context surrounding Michigan’s Estates and Protected individuals Code (EPIC). In this followup, our goal is to dive more into the definition of “protected individual” as it applies in probate court proceedings — and offer some broad overviews of important concepts to understand, including the distinction between guardianships and conservatorships.

What Does “Protected Individual” Mean in the Michigan Probate Courts?

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.

As explicated by EPIC, the Michigan Probate Courts have exclusive jurisdiction over matters pertaining to the administration of the estates of deceased and protected persons. But what exactly does it mean to be a protected person or protected individual? EPIC itself defines the term thusly;

“Protected individual” means a minor or other individual for whom a conservator has been appointed or other protective order has been made…

The State of Michigan offers more clarity in a consumer-oriented writing:

Protected individuals are persons who by reason of their age or physical impairment cannot manage their own affairs.

Thus, a protected individual might be an unmarried minor, who requires a guardian or conservator to oversee their care and custody or finances, property, and estate, respectively. An individual may also fall under the umbrella of “protected person” if they meet Michigan’s standards for incapacitation.

Speaking broadly, incapacitation refers to adults who have lost the ability to take care of themselves properly, or make and communicate informed decisions about their personal well-being.

More specifically, EPIC defines an incapacitated individual as:

an individual who is impaired by reason of mental illness, mental deficiency, physical illness or disability, chronic use of drugs, chronic intoxication, or other cause, not including minority, to the extent of lacking sufficient understanding or capacity to make or communicate informed decisions.

It’s crucial to understand that incapacity is a legal concept, which can only be determined by the courts after a thorough assessment — which may also include evaluations and recommendations from physicians or mental health professionals.

In Michigan, adults are broadly presumed to be competent and this presumption must be overcome by clear and convincing evidence. Incapacity is also often nuanced and task-specific. In other words, the court can closely tailor solutions to the specifics of an individual’s situation, as necessary.

Guardianships, Conservatorship, and Protected Individuals

If you have a protected individual in your life or you are planning for the potential of incapacity for yourself, it is important to understand two essential concepts — namely, guardianship and conservatorship.

A Brief Intro to Michigan Guardianship

Guardianship grants someone the legal authority to care for another person, often along with their personal property and assets. Generally speaking, an adult guardian’s responsibility is to look out for the overall well-being and care of a minor or an incapacitated individual, who is known as the ward.

A guardian acts as a substitute decision-maker for an incapacitated individual, and is generally charged with ensuring that all of their essential needs are met. This may include providing appropriate food, clothing, and shelter; protecting the individual’s property; and making medical decisions on their behalf, when necessary.

There are many different situations when guardianship may be necessary and this legal arrangement can come in several different forms. 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 the individual’s unique situation.

Accordingly, EPIC states that “the court shall grant a guardian only those powers and only for that period of time as is necessary to provide for the demonstrated need of the incapacitated individual.” A court order establishing a guardianship must also specify “any limitations on the guardian’s powers and any time limits on the guardianship.”

In order for a guardian to be appointed, a concerned individual — which could be the incapacitated individual, or any person interested in their welfare — must file a petition, explaining why the guardianship is needed. A hearing will subsequently be held to consider the request, and a judge will determine whether or not a guardianship is needed, who will serve as guardian, and what powers the guardian will have. A hearing can be contested if the incapacitated individual does not want or agree to the guardianship, or if there are concerns or disagreements about who should serve as guardian.

For more insight, check out our guardianship page, click here to explore common FAQs about guardianship, or peruse our article on the powers and duties of a guardian. You can also click here to begin the discussion with an experienced and knowledgeable Michigan probate attorney.

A Brief Intro to Michigan Conservatorships

As defined by EPIC, a conservator is a person appointed by a court to manage a protected individual’s estate.

A conservator may be appointed in situations where an individual can no longer effectively manage their own finances or property. In such instances, a conservator takes on the responsibility of helping to manage some or all of the income, savings, and property of the individual, collectively known as their estate.

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 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 people or parties.

As with guardians, conservators must be appointed through the courts. In order for a conservator to be appointed, a petitioner must file with the probate court. The court will then investigate the facts of the situation, and a hearing will be held to determine if a conservatorship will be necessary, and, if so, to select a suitable conservator who will be willing and able to serve.

In order for a conservator to be appointed, the court must find that the individual is unable to manage property and business affairs effectively, and 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.”

Anyone interested in an individual’s estate, affairs, or welfare may petition for conservatorship, along with anyone who may be negatively affected by ineffective management of the individual’s property. An individual can also 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.

For a more comprehensive view, check out our conservatorship page, click here to explore common FAQs about Michigan conservatorships, or peruse our article on the powers and duties of a conservator. Or, you can also click here to begin the discussion with an experienced and knowledgeable Michigan probate attorney.

Keep the Conversation Going with Metro Detroit’s Guardianship and Conservatorship Attorneys

Even in the best of circumstances, the Michigan probate courts can be very complex, and matters involving protected individuals often get drawn out through endless court hearings. Because the appointment of a conservator or guardian is intrusive by nature, it is important to have legal counsel that will represent your interests and get aggressive if necessary.

Interested in learning more about guardianship and conservatorship in Michigan? Interested in taking steps to provide for and protect the most important people in your life? 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 planning and probate needs, including guardianships, conservatorships, comprehensive incapacity planning, and powers of attorney. Our experienced probate attorney Dean E. Patrick can assist you with many different services regarding conservatorships and conservatorships, including:

Establishing, terminating, modifying, or contesting a conservatorship or guardianship
Defending your current position as conservator or guardian
Removing an acting conservator or guardian who has failed in their duties
Filing conservatorship accounts
Any others matters that need to be settled in the Michigan probate court system.

If you require further legal perspective or if you 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.

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.

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.

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.

Can a Trustee Be Challenged or Removed?

Patrick & Associates, PLLC — Wed, 03 Mar 2021 05:37:08 GMT

A trustee has many important responsibilities and duties, including managing, controlling, and distributing trust property, while keeping beneficiaries and other relevant parties informed about the administration of the trust.

A trustee is a fiduciary, meaning that they are held to a very high standard for conduct. In executing his or her duties, a trustee is expected to put the needs of the trust and the trust beneficiaries above their own. Among other things, acting as a fiduciary means serving with “undivided loyalty,” remaining impartial, being careful and prudent in all actions, and keeping trust assets separate from your own.

Nominating a trustworthy and capable trustee or successor trustee is an important part of creating an estate plan. Unfortunately, it is not uncommon for issues with trustees to arise – such as conflicts between cotrustees, failure to meet important deadlines, self-dealing, or even trustees failing to distribute assets in compliance with the terms of the trust.

What are your options for challenging or removing a trustee who is not performing their responsibilities, hindering the administration of the trust, or actively working against the terms of the trust agreement?

One recourse is to petition the probate court for the removal of a trustee, particularly due to breach of trust. If you believe you have cause to petition for the removal of a trustee, it is extremely important that you consult with a knowledgeable trusts attorney as soon as possible to explore your options.

Petition for Removal of a Trustee

Under the Michigan Trust Code, certain parties – including the settlor (i.e., the creator of the trust), a cotrustee, or a qualified trust beneficiary – may request the court to remove a trustee. The court may also act to remove a trustee on its own initiative.

The court may remove a trustee in situations where one or more of the following occur:

The trustee commits a serious breach of trust (that is, a significant violation by a trustee of a duty the trustee owes to a trust beneficiary)
Lack of cooperation between cotrustees is substantially impairing the administration of the trustee
Because of unfitness, unwillingness, or persistent failure of the trustee to administer the trust effectively, the court determines that removal of the trustee best serves the purposes of the trust
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 and is not inconsistent with a material purpose of the trust, and a suitable cotrustee or successor trustee is available

Remedies for Breach of Trust

In lieu of or in addition to removing a trustee, the court may also order other relief it deems necessary to protect trust property or the interests of trust beneficiaries. Broadly speaking, the court may do any of the following to remedy a breach of trust that has occurred or may occur:

Compel the trustee to perform their duties
Enjoin the trustee from committing a breach of trust
Compel the trustee to redress a breach of trust by paying money, restoring property, or other means
Order a trustee to account
Appoint a special fiduciary to take possession of the trust property and administer the trust
Suspend the trustee
Remove the trustee
Reduce or deny compensation to the trustee
Void an act of the trustee, impose a lien or a constructive trust on trust property, or trace trust property wrongfully disposed of and recover the property or its proceeds
Order any other appropriate relief

When Can You Commence Proceedings?

The Michigan Trust Code also sets down some notable limitations on commencing proceedings against a trustee:

A trust beneficiary cannot commence a proceeding against a trustee for breach of trust more than one year after the date the trust beneficiary or a representative of the trust beneficiary was sent a report that adequately disclosed the existence of a potential claim for breach of trust and informed the trust beneficiary of the time allowed for commencing a proceeding
A trust beneficiary who has waived their right to receive reports cannot commence a proceeding for a breach of trust more than one year after the end of the calendar year in which the alleged breach occurred.
In other situations, a judicial proceeding by a trust beneficiary against a trustee for breach of trust must be commenced within five years after the first of the following to occur: the removal, resignation, or death of the trustee, the termination of the trust beneficiary’s interest in the trust, or the termination of the trust

Understanding a Trustee’s Rights and Liabilities

There are also some specific circumstances and conditions to keep in mind when it comes to a trustee’s liability – and the rights of other individuals who may be dealing with the trustee.

For instance, the Michigan Trust Code makes clear that a trustee who acts “in reasonable reliance” on the terms of the trust as expressed in the trust instrument “is not liable to a trust beneficiary for a breach of trust to the extent the breach resulted from the reliance.”

Similarly, if an event occurs that affects the administration or distribution of a trust – including, but not limited to, marriage, divorce, performance of educational requirements, attainment of a specific age, or death – a trustee “who has exercised reasonable care to ascertain the happening of the event” is not liable for a loss resulting from their lack of knowledge or lack of notice.

In some trusts, you may find exculpatory language, relieving a trustee of liability for breach of trust. Such terms are unenforceable when the term “relieves the trustee of liability for breach of trust committed in bad faith or with reckless indifference to the purposes of the trust or the interests of the trust beneficiaries,” or if the term was inserted as the result of an abuse by the trustee. However, the terms of a trust relieving a trustee of liability for breach of trust for the acquisition or retention of a particular asset or asset class or failure to diversify investments are enforceable.

A trustee is generally not liable to a trust beneficiary for breach of trust if the trust beneficiary consented to the conduct constituting the breach, released the trustee from liability for the breach, or ratified the transaction constituting the breach – unless the consent or ratification was induced by improper conduct, or the trust beneficiary did not know of one or more material facts relating to the breach.

Finally, it is important to keep in mind that a person who assists or deals with a trustee in good faith without knowledge that the trustee is exceeding or improperly exercising their powers is protected from liability.

Potential Outcomes and Next Steps

The Michigan Trust Code states that a trustee who commits a breach of trust is liable to the trust beneficiaries affected for whichever of the following is larger:

The amount required to restore the value of the trust property and trust distributions to what they would have been had the breach not occurred, or
The profit the trustee made by reason of the breach

Even absent a breach, a trustee may be accountable to an affected trust beneficiary for any profit made arising from the administration of the trust. However, absent a breach of trust, a trustee is not liable to a trust beneficiary for a loss or depreciation in the value of trust property, for failure to generate income, or for not having made a profit.

In a proceeding involving the administration of a trust, the court may award costs and expenses, including reasonable attorney’s fees, to any party who enhances, preserves, or protects trust property, to be paid from the trust that is the subject of the proceeding.

If a trustee participates in a civil action or proceeding in good faith, whether successful or not, the trustee is entitled to receive from the trust property all expenses and disbursements including reasonable attorney fees that are incurred. With that said, a court may reduce or deny a trustee’s claim for compensation, expenses, or disbursements with respect to a breach of trust.

What happens if a vacancy in trusteeship occurs due to disqualification or removal? If one or more cotrustees remains in office, a vacancy in a trusteeship does need not to be filled. A vacancy in a trusteeship must be filled if the vacancy leaves either:

a trust that is not subject to a separate trustees provision as of the time of the vacancy without any remaining trustee
any of the several separate trusteeships governed by an operative separate trustees provision without any remaining trustee

If a vacancy in a trusteeship of a noncharitable trust is to be filled, the following order of priority is used:

In the manner designated by the terms of the trust
By a person appointed by the court

If a vacancy in a trusteeship of a charitable trust is to be filled, the vacancy must be filled in the following order of priority:

In the manner designated by the terms of the trust.
By a person selected by the charitable organizations expressly designated to receive distributions under the terms of the trust
By a person appointed by the court

Whether or not a vacancy in a trusteeship exists or is required to be filled, the court may appoint an additional trustee or special fiduciary upon the showing of good cause.

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

Probate Litigation Is Complex. You Don’t Have to Go Through It Alone

Coming to terms with a loved one’s passing is a difficult and emotional process – and one that is only made more fraught when you need to deal with intricate legal matters at the same time. Probate litigation can cause emotions to run high, and lead to intense family arguments. Litigation will also require an understanding of extremely complex legal matters, as well as the specific laws for your state and county, and how they may apply based on your unique situation.

Throughout this trying time, it’s important to have an experienced and professional advocate on your side, one who can patiently help you understand the ins and outs of the probate process in your area.

Whether you are a settlor, a trustee, or a named beneficiary, a probate litigation attorney in your area can help address your questions and navigate the entire process, so that you can secure the best possible outcome for your situation.

If you’re based in Michigan, Attorney Dean E. Patrick can help. Mr. Patrick is knowledgeable on all aspects of estate planning, trusts, and probate, with years of experience as a practicing attorney. Whenever you’re ready to get started, Dean is here to listen and learn more about your circumstances, and start finding a solution to your desired outcome.

If you have any trust-related issue that has interrupted your life, you can count on our firm to work hard to accomplish your goals — with the expertise, empathy, intellect, and professionalism 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. Contact Dean E. Patrick at his Southfield, Michigan office at (248) 663-2566 or click here to arrange your initial consultation.

What Is a Testamentary Trust?

Patrick & Associates, PLLC — Tue, 02 Mar 2021 05:23:52 GMT

When you’re gone, your most important assets will remain — and they will be reallocated. Estate planning is a process that keeps you in control of the most important things in your life. Depending on the specifics of your circumstances, there are numerous estate planning mechanisms and tools to discuss with your estate planning attorney, including the testamentary trust.

A testamentary trust is a useful estate planning tool which can allow you to maintain control over some of your most important assets and help protect your beneficiaries in the months and years to come — particularly minor children, loved ones who happen to have a disability, and family members who may require some level of financial oversight and guidance to manage their inheritance.

What Is a Testamentary Trust?

In most basic terms, a testamentary trust is a trust that is contained in a will. Generally speaking, a testamentary trust is created through instructions set down in a decedent’s last will and testament.

Specifically, the testator (will-maker) may use their will to set down instructions for establishing a trust, specifying the assets that should be transferred into the trust, naming a trustee and beneficiaries of the trust, and leaving instructions for how the trustee should manage the trust contents on behalf of the beneficiaries. One example of an asset often used to fund a testamentary trust is the proceeds of a life insurance policy owned by the testator.

You can create multiple testamentary trusts in your will — for instance, you could create one trust for the benefit of your spouse, and another for your children or grandchildren.

Because it is established upon the death of the settlor, a testamentary trust is an irrevocable trust. With that said, you can make modifications or adjustments to the terms of the trust for as long as you are alive by amending or replacing your will with the help of a knowledgeable and thoughtful estates and trusts attorney. A testamentary trust can be used in conjunction with other estate planning mechanisms, including a revocable living trust. You can also still choose to make distributions of property or other assets through your will, and only transfer some assets into your testamentary trust.

How Do Testamentary Trusts Work?

Like all trusts, a testamentary 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, known as the trustee. Anyone who receives assets out of the trust is known as a beneficiary.

As we noted earlier, a testamentary trust is established through your written will. After the testator passes away, their will must be submitted for probate. It is then the responsibility of the decedent’s personal representative to see that the testamentary trust is opened and funded with the appropriate assets, following the instructions set down in the will. The trustee is then responsible for managing and distributing trust assets until the trust expires or the contents are fully distributed to the trust beneficiaries.

Often, a trust may be set up to expire on completion of a certain event — such as a beneficiary reaching a predetermined age or completing a milestone like graduating from college.

It is worth reiterating that the assets you want placed into your testamentary trust will not avoid probate. All wills are subject to probate in the Michigan courts. Funds and assets can only be transferred into the newly created trust after they have been probated. The trustee may also need to provide regular reports and accountings to the probate court, to prove that the trust is being properly managed.

The probate process can become expensive and time-intensive, particularly without proper planning. If probate avoidance is one of your main estate planning goals, you may wish to discuss the benefits of creating a revocable living trust with your estate planning attorney. Unlike a testamentary trust, a revocable living trust is funded with assets while the settlor is still alive, which means that these assets can be transferred outside of probate. Revocable living trusts also tend to offer greater privacy, since they do not become a matter of public record.

As you consider the upsides and limits of any trust, it is important to consider who you will name as trustee. It is important to find someone who will be up to the important task of managing your trust assets and distributing them appropriately. The most important thing about choosing a trustee is that they are the best choice for your circumstances. 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.

Why Use a Testamentary Trust?

Testamentary trusts are often used to help ensure that you are able to maximize the assets available to your beneficiaries, while ensuring that receiving an inheritance does not become a detriment.

Testamentary trusts are often used to hold funds for the ongoing or future education of minor children, or to allocate funds in set increments so that they cannot be squandered by a profligate beneficiary who is irresponsible with money. Testamentary trusts can also be supplemental or special needs trusts, which are designed to provide an inheritance to beneficiaries who happen to be physically, mentally, or developmentally disabled without interrupting government benefits.

For an example, consider the fictional couple Steve and Sandra, who have two 18 year old boys, Ricky and Spencer. When Steve and Sandra die suddenly in a car accident, the balance of their estate is transferred to the boys.

Always the less responsible son, Spencer immediately spends his inheritance on a sports car and a new home, rather than using the money for school as his parents might have wanted. While Ricky tries to be responsible and spend his inheritance on college expenses, unexpected car repairs and a turbulent stock market affect him financially, forcing him to take on a full-time job in addition to school.

In both cases, Spencer and Ricky might have benefitted had Steve and Sandra set up testamentary trusts, nominating a responsible trustee to manage the finances for their children and helping to ensure that their health, education, maintenance, and support would be taken care of.

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 or trust in the Michigan probate courts, know that you do not have to go through these difficult circumstances alone.

Ready to create a plan 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 an estate plan that will protect your family.

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.

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.

Can You Challenge or Remove a Personal Representative in Michigan?

Patrick & Associates, PLLC — Wed, 10 Feb 2021 05:21:52 GMT

When someone passes away, their assets must be collected and distributed and their estate must be guided through Michigan’s probate courts. The personal representative is the person tasked with this important responsibility, which typically includes:

Marshalling the assets of the estate and determining their value
Paying charges from the estate (including the decedent’s debts and final expenses, including taxes and amounts owed to creditors)
Distributing the remaining assets to the appropriate estate beneficiaries, in line with the decedent’s wishes and all relevant local laws

As they discharge their duties, a personal representative is held to a very high standard of conduct. They are expected to be impartial and fair, executing a number of tasks at a very high level while putting the needs of the estate above their own.

With all this being said, it can be frustrating and frightening to watch as an appointed personal representative fails to execute their duties properly and efficiently.

What options are available to an heir, devisee, child, or creditor when they notice a personal representative delaying the estate administration process, mismanaging estate assets, committing an act of self-dealing, or, worst of all, taking an action that actively goes against the best interests of the estate?

Michigan law offers several avenues for recourse – from restraining the personal representative from taking a specific action, to having their appointment terminated by the court.

If you are in a position where you are considering challenging or removing a personal representative, one of the most important steps you can take is to consult with an experienced probate and estates attorney. If you suspect wrongdoing or need to act quickly, do not hesitate to contact our office at (248) 663-2566 to discuss your circumstances in more detail.

Let’s explore three avenues that an “interested person” may use to challenge or remove a personal representative in Michigan:

Demanding a Bond

One step that a person with a significant financial interest in the estate may take is to make a written demand that a personal representative give bond.

The demand must be filed with the register, and a copy must be sent to the personal representative if they have already been appointed. Bond is required when such a demand is filed, but the requirement ceases if the person demanding bond ceases to be interested in the estate, or if the bond can be excused for another valid reason.

After receipt of notice and until the filing of the bond or cessation of the requirement of bond, the personal representative must refrain from exercising any powers of their fiduciary office, except as necessary to preserve the estate. If the personal representative fails to meet a requirement of their bond, this is cause for removal and a successor personal representative may be appointed.

Petitioning for an Order Restraining Personal Representative

An interested person may petition the court to file a temporary order restraining a personal representative from performing a specified act of administration, disbursement, or distribution, or from exercising a power or discharging a duty of their office. An interested person may also ask the court to make another order to secure proper performance of the personal representative’s duty. In either situation, it must appear to the court that the personal representative otherwise may take some action that would unreasonably jeopardize the interests of the petitioner, or of another person interested in the estate.

For any petition for an order restraining a personal representative, the court shall set a hearing date no more than 14 days after the date of the issuance of the temporary order, unless the parties agree otherwise. Notice shall be given as the court directs to the personal representative, to the personal representative’s attorney of record, and to any parties named defendant in the petition.

Petitioning for Termination of Appointment

An interested person may petition for the removal of a personal representative for cause at any time. When such a petition is filed, the court will fix a time and place for a hearing, and notice must be given to the personal representative and any other parties as ordered by the court.

Broadly speaking, the court may choose to remove a personal representative under any of the following circumstances:

Removal will be in the best interests of the estate
It is shown that the personal representative or the person who sought the personal representative’s appointment intentionally misrepresented material facts in a proceeding leading to the appointment
The personal representative disregarded a court order; became incapable of discharging the duties of office; mismanaged the estate; or failed to perform a duty pertaining to the office

Upon receipt of notice of removal proceedings, the personal representative cannot act except to account, to correct maladministration, or preserve the estate. If removal is ultimately ordered, the court shall also direct by order the disposition of the property remaining in the name of, or under the control of, the personal representative being removed.

If the exercise or failure to exercise a power concerning the estate is deemed improper, the personal representative may be liable to interested persons for damage or loss resulting from breach of fiduciary duty.

Importantly, however, if a personal representative defends or prosecutes a proceeding in good faith, whether successful or not, the personal representative is entitled to receive from the estate necessary expenses and disbursements including reasonable attorney fees incurred.

Probate Litigation Is Complex. You Don’t Have to Go Through It Alone

Coming to terms with a loved one’s passing is a difficult and emotional process – and one that is only made more fraught when you need to deal with intricate legal matters at the same time.

Probate litigation can cause emotions to run high, and lead to intense family arguments. Litigation will also require an understanding of extremely complex legal matters, as well as the specific laws for your state and county, and how they may apply based on your unique situation.

Whether you are a personal representative, an heir, a creditor, a named beneficiary, an omitted child, or a widow/widower, a probate litigation attorney in your area can help address your questions and navigate the entire process, so that you can secure the best possible outcome for your situation.

If you’re based in Michigan, Attorney Dean E. Patrick can help. Mr. Patrick is knowledgeable on all aspects of probate, with years of experience as a practicing attorney. Whenever you’re ready to get started, Dean is here to listen and learn more about your circumstances, and start finding a solution to your desired outcome.

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

What Is a Pour-Over Will?

Patrick & Associates, PLLC — Mon, 08 Feb 2021 06:14:32 GMT

Over the course of a lifetime, we 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 a process that gives you a say, and there are many important tools and mechanisms to consider with your attorney as you move forward, including the pour-over will.

What Is a Pour-Over Will?

Black’s Law Dictionary defines a “pour over will” as:

A will giving money or property to a trust.

In other words, a pour-over will is a will written to “pour” all of the estate assets that pass through it directly into a previously created trust at your death. It is a way to make sure that all of your assets, no matter how large or small, are able to be transferred into a trust when you are no longer around to fund the trust yourself.

A pour-over will must satisfy all of the other legal requirements needed to be considered valid under Michigan law. Typically, the “pour-over” mechanism is activated by a written provision which transfers property into an existing trust. A pour-over will is typically used in conjunction with a revocable living trust, also known as an inter vivos trust. You can learn more about the different types of trusts commonly used in Michigan estate planning by clicking here.

A pour-over will can offer a few unique benefits, depending on your specific circumstances. Above all, a pour-over will acts like a safety net or backboard, helping to ensure that your assets will be funneled into your trust — and, by extension, managed and distributed in line with the terms set down in the trust agreement.

Estate planning can be a complex and multifaceted process, and it is not unheard of for things to “slip through the cracks.” Perhaps you simply forgot or overlooked a valuable piece of property that you would have wanted to title into your trust; maybe you acquired a new asset but never got around to adding it into your trust during your lifetime. In such cases, a pour-over will can help provide you with peace of mind, and ensure that your assets will be handled in a manner appropriate for your circumstances. If you do not make any plan to deal with these assets, they may ultimately be subject to Michigan’s strict laws of intestate succession.

At the same time, a pour-over will is a mechanism that can empower you to maintain control. Most commonly, wills are used to distribute assets to your chosen devisees outright; with a trust, you can set up spendthrift provisions, delay distributions, and otherwise manage when and how the trust assets are to be used.

Another potential advantage is that pour-over wills can be used to help protect your privacy. Wills subject to probate are a matter of public record, and pour-over wills are no exception. However, with a pour-over will, you may be able to state that all solely owned assets should be distributed into your trust, rather than detailing specific assets or intended recipients within the will itself. Because trusts are not public record, you can keep a lot of information about your family history and finances a lot closer to the chest.

Finally, pour-over wills can offer a measure of clarity and simplicity in some circumstances. Ultimately, managing and distributing your estate assets may be easier and more straightforward when all decisions are controlled by the trust agreement, rather than multiple mechanisms; this arrangement may also help simplify things for your personal representative in the short-term.

Important Considerations About Pour-Over Wills and Your Michigan Estate Plan

One of the biggest advantages of creating a revocable living trust is that the assets you place into it during your lifetime are able to bypass probate, simplifying the estate administration process and potentially sparing your estate from taxes and fees. However, it is important to note that assets that pass through a pour-over will do not avoid probate, and must be subject to this process before they can be distributed through the trust.

Pour-over wills are subject to probate proceedings; with that said, they can be used to streamline probate as part of a thoughtful and comprehensive estate plan.

Specifically, in most cases a pour-over will works best as a safety net or last resort, to catch any assets that haven’t already been accounted for. If you take action to sufficiently fund your trust during your lifetime, and take advantage of the nontestamentary transfers available to you (such as adding beneficiary designations to your financial accounts or owning property as joint tenants). This way, you can have some peace of mind that your most valuable and important assets will be transferred smoothly and efficiently — lessening the financial and personal costs of probate for your beneficiaries.

Another important thing to note is that pour-over wills are different than testamentary trusts. A pour-over will is used to funnel assets into a trust that has already been established during your lifetime. In contrast, a testamentary trust is created through your will, and only takes effect after your death.

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.

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.

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.

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.

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.

Understanding Michigan’s Homestead Allowance, Family Allowance, and Exempt Property

Patrick & Associates, PLLC — Thu, 10 Dec 2020 05:12:37 GMT

Losing a loved one is always difficult and emotionally trying. The loss of a family member can take on a new dimension when the decedent was the head of the household, or one of the primary income earners in the family. In Michigan, there are a number of rights belonging to the surviving spouse and children of the decedent that can help make this daunting loss somewhat easier to manage — and which are important for the personal representative and surviving family members of the decedent to understand.

As described in Michigan’s Estates and Protected Individuals Code (EPIC), the priority allowances to which a decedent’s surviving spouse and dependent children are entitled are the homestead allowance; the family allowance; and exempt property.

It is important to note that these allowances and rights to exempt property are only available in situations where an individual dies while domiciled in Michigan; for a decedent who dies domiciled outside of this state, rights to homestead allowance, family allowance, and exempt property are governed by the law of the state where they were domiciled at the time of their death.

*An important note on adjustments: The dollar amounts used below are adjusted annually for inflation, pursuant to MCL 700.1210. When you see a dollar amount noted with an asterisk (*), keep in mind that this specific dollar amount shall be multiplied by the cost-of-living adjustment factor for the calendar year in which the decedent dies. 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.

Homestead Allowance

A surviving spouse of the decedent is entitled to a homestead allowance of $15,000* (adjusted to $24,000 as of 2020, as provided in section 1210). If there is no surviving spouse, the decedent’s minor and dependent adult children may share the amount of the allowance, divided equally.

The homestead allowance is exempt from and has priority of other claims against the estate, except administration costs and expenses and reasonable funeral and burial expenses. Broadly speaking, the homestead allowance is payable in addition to any share of the estate that passes to the surviving spouse or minor or dependent children by the will of the decedent, intestate succession, or elective share.

Family Allowance

The family allowance is intended to provide support for the decedent’s family during the administration of the estate — a period of time which may be quite speedy or slow and drawn out, depending on the unique circumstances of the decedent and their estate.

Under EPIC, a “reasonable” family allowance is payable to the decedent’s surviving spouse and minor children whom the decedent was obligated to support, as well as children of the decedent or another who were being supported by the decedent.

If the estate is inadequate to discharge allowed claims, allowance shall not continue for longer than one year; the amount of the family allowance may be paid in a lump sum or in periodic installments. The amount is payable to the surviving spouse, and is meant to go to their use and to care for their minor and dependent children. Otherwise, this amount may be paid to the decedent’s children or anyone having their care and custody; if a minor child or another dependent is not living with the surviving spouse, the allowance may be paid partially to the child or to a fiduciary or another person in charge of their care and custody, and partially to the surviving spouse.

The family allowance is exempt from and has priority over all claims except administration costs and expenses, reasonable funeral and burial expenses, and the homestead allowance. This allowance is generally payable in addition to any share passing to the spouse or children by will, intestate succession, or elective share. A recipient’s right to unpaid allowances is terminated upon the death of the individual.

Exempt Property

The decedent’s surviving spouse is also entitled to household furniture, automobiles, furnishings, appliances, and personal effects from the estate up to a value not to exceed $10,000* more than the amount of any security interests to which the property is subject (adjusted to $16,000 as of 2020, as provided in section 1210). If there is no surviving spouse, the decedent’s children are entitled jointly to the same value (unless they are excluded, as we’ll explore shortly).

If encumbered assets are selected and the value in excess of security interests, plus that of other exempt property, is less than $10,000* or if there is not $10,000* worth of exempt property in the estate, the spouse or children are entitled to other assets of the estate to the extent necessary to make up the value.

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 for the payment of all of the following in the following order:

Administration costs and expenses
Reasonable funeral and burial expenses.
Homestead allowance.
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, intestate succession, or elective share. The decedent may choose to exclude one or more of their children from receiving exempt property (or assets to make up a deficiency) 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

Selection, Determination, and Documentation

If the estate is otherwise sufficient, property specifically devised shall not be used to satisfy the homestead allowance or exempt property. Subject to this restriction, the surviving spouse, fiduciaries or others that have the care and custody of minor children, or children who are adults, may select property of the estate to satisfy the homestead allowance and exempt property.

If they fail to do so within a reasonable time, the personal representative may make those selections. The personal representative may execute a deed of distribution or other instrument to establish the ownership of property taken as homestead allowance or exempt property.

The personal representative may also determine the amount of the family allowance to be paid in a lump sum not exceeding $18,000* ($29,000 as of 2020, adjusted as provided in section 1210), or periodic installments not exceeding 1/12 of that amount per month for one year. The personal representative may disburse funds of the estate in payment of the family allowance and any part of the homestead allowance payable in cash.

The personal representative or any interested person aggrieved by a selection, determination, payment, proposed payment, or failure to act under this section may petition the court for appropriate relief, which may include a family allowance other than that which the personal representative determined or could have determined.

Have Any More Questions About Michigan Probate or Estate Administration?

Coming to terms with a loved one’s passing is a difficult and emotional process – and one that is only made more fraught when you need to deal with intricate legal and financial matters at the same time.

Throughout this trying time, it’s important to have an experienced and professional advocate on your side, one who can patiently help you understand the ins and outs of probate and estate administration in your area.

Whether you are a personal representative, an heir, a creditor, a named beneficiary, an omitted child, or a widow/widower, 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 situation.

If you’re based in Michigan, Attorney Dean E. Patrick can help you gain a better understanding of probate and estate administration. Mr. Patrick is knowledgeable on all aspects of 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.

If you have any probate-related issue that has interrupted your life, our entire firm will work hard to accomplish your goals – with expertise, empathy, intellect, and professionalism 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.

What Can a Probate and Estates Attorney Do for You?

Patrick & Associates, PLLC — Mon, 30 Nov 2020 05:33:42 GMT

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 complete your estate plan or are forced into the probate courts, you need to go to an established probate and estate planning attorney.

Michigan probate attorneys focus on the areas of law that are handled in the probate courts, including estate administration, trusts, guardianships, and conservatorships. An experienced attorney can provide fiduciary services, and assist with the many considerations that go into estate and incapacity planning.

Ultimately, a skilled and efficient probate attorney’s job is really to help you protect the important things — including the people you hold dear and the assets you have spent a lifetime acquiring.

Curious about what this may mean? Let’s explore what a probate and estate planning attorney can do to help Michigan families and individuals…

Navigate the Probate Court System

The Michigan probate courts have broad jurisdiction to handle matters relating to deceased estates, trust estates, guardianships, and conservatorships — all matters that can be not only complex, but stressful and emotionally taxing to face. The probate court is not a comfortable setting for handling an estate, and it can be difficult to navigate alone.

An experienced probate attorney can make sure that you receive the expert legal guidance you need to make a difficult situation easier. Whether the estate is contested or uncontested, an attorney can make sure that you fulfill all of your legal obligations when serving as a personal representative or trustee.

A knowledgeable legal professional can provide the assistance and support that you need as an estate is guided through the Michigan probate courts, while also helping you deal with any number of potential probate issues, including:

Breach of fiduciary duty
Opening or closing a probate estate
Issues relating to an omitted spouse and/or children
Will and trust contests and disputes
Determination of heirs
Handling creditor claims
Undue influence
Fraud
Incapacity and living probate
Wrongful death
Beneficiary distributions
Estate accountings

Stay In Control of Your Most Important Assets

If you become incapacitated, and even when you’re gone, estate planning keeps you in control of the things that matter most to you — and an experienced attorney can provide you with the knowledge and tools you need to assure assure that you have a say over your assets, based on the specifics of your circumstances.

There are many myths and misconceptions out there about estate planning — that it is only for the ultra-wealthy, for example, or that a will is the only estate planning tool you need. An attorney can help you separate from fiction, and find the answers you’ve been looking for and choose the tools best suited to your individual circumstances. These might include:

Wills. Wills are an important part of an estate plan, which allow you to control the distribution of your property and nominate the person or people you choose to look after your children or incapacitated adult loved ones. If you do not take advantage of your ability to determine how your property and assets will be handled in the event of your passing, the state of Michigan will decide for you. A probate and estates attorney has the experience and knowledge it takes to empower you to create a last will that will protect your family, control the distribution of your assets, and facilitate the estate administration process.
Trusts. 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, who is known as the trustee. Once the trust is created, it is very important to re-title your assets into the trust or the trust will remain an empty vessel. An expert in trust law and administration can not only help you to understand all of your options and assist you with the creation of the trust, but also ensure that all legal formalities are addressed so that you create a trust that is up to your specifications. Trusts can help assets to avoid formal estate administration in the probate courts, and could help protect your estate from certain taxes and fees, which would ultimately provide more to your beneficiaries.
Powers of Attorney. 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, a 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. There are different types of POA, including designations for financial matters and health care. A legal professional can work with you one-on-one to explore and discover your goals, and help ensure that your affairs will be handled the way you would want when you can no longer manage or communicate about them on your own.

Look to the Future With Confidence, Clarity, and Peace of Mind

Having a comprehensive estate plan in place can help provide any number of personal benefits, including:

Offering peace of mind knowing that you took action to minimize the stress of your circumstances for your family.
Providing assurance that your partner will get the assets and control you want them to have
Helping to ensure that someone you can rely on is appointed to handle your assets and affairs.
Assuring distribution of your assets in a manner appropriate for your circumstances.
Helping to ensure that inheritance does not become a detriment to your beneficiaries
Directing how you will be treated should you ever become incapacitated
Making it easier to add updates or make revisions to your estate plan as your circumstances change over time

It’s never fun to think about what would happen if you were to sustain a major injury or succumb to illness, but it’s an important step to take — and one that is necessary to make sure that your wishes will be heard, respected, and carried out. When you face the future with an attorney’s guidance it’s not only legal advice that you’ll receive, but a little peace of mind as well.

Take Care of Your Loved Ones

An estates and probate attorney can help you protect the people who matter most, helping with matters including estate planning, trust administration, and guardianships and conservatorships.

A guardianship is a legal arrangement established in the probate court to provide for the well-being of a protected individual, such as a minor or an incapacitated adult. Broadly speaking, a guardian has legal responsibility for another person and is in charge of his or her comfort, care, and general well-being.

A conservatorship is intended to help manage a protected individual’s estate if and when a situation arises when an individual can no longer effectively manage their finances or property. Here in Michigan, conservatorships and guardianships serve different functions — with conservators making decisions about the property or the finances of another person, while a guardian is responsible for medical or housing decisions. The same person can serve in both roles, or they can be assigned to different individuals.

An attorney can help you navigate the many matters relating to conservatorships and guardianships that must be settled in the probate court system — including establishing, terminating, modifying, or contesting a conservatorship or guardianship; defending your current position as conservator or guardian from contests; removing an acting conservator or guardian who has failed in their duties; filing required accounts and records; and more.

Providing for the people closest to you is also a key component of estate planning. In addition to nominating a guardian or conservator for your minor or incapacitated adult loved ones, an attorney can help you devise strategies to help:

Maximize the assets available to your beneficiaries when you have passed.
Minimize or eliminate the cost of taxes probate fees
Allow for more immediate distribution of your assets
Assure inheritance does not become a detriment to your beneficiaries
Prevent disagreements and conflicts among family after you are gone

Looking for Help Protecting the Important Things?

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.

When it is time to take care of your estate planning needs, get the answers, insight, and guidance you and 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 customize a solution to suit your needs.

When it’s time to navigate the probate courts, our attorneys can help ensure that you receive the expert legal advice your matter deserves. Whether you are confronted with an estate contest or want to fulfill your legal obligations and transfer assets without incurring personal liability, you can rely on us to bring you up to speed with the process, advocate for your position, and provide the support you need.

Mr. Patrick is knowledgeable on all aspects of 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. If you have any probate-related issue that has interrupted your life, we will work hard to accomplish your goals – providing your matter with the expertise, empathy, intellect, creativity, and professionalism it deserves at every step of the way.

Ready to keep the conversation going? The probate and estate planning lawyers of Patrick & Associates, PLLC are 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 to learn more.

What Are the Powers and Duties of a Conservator in Michigan?

Patrick & Associates, PLLC — Mon, 23 Nov 2020 05:34:17 GMT

As defined by Michigan’s Estates and Protected Individuals Code (EPIC), a conservator is a person appointed by a court to manage a protected individual’s estate.

Conservators take on an incredibly important set of responsibilities, which can change and develop over time based on the needs of the protected person and the complexity of their assets and finances, known collectively as their estate.

As the Michigan Long Term Care Ombudsman Program puts it in its Handbook for Conservators of Adults:

Being a conservator is not a simple role, but one demanding responsibility, patience, ability to work with finances and sensitivity. There are a number of duties you owe to the person you have agreed to assist. There are also duties you owe to the court… How complicated serving as conservator will be, and how much time it will take, depend on a number of factors: the value of the property, the types of assets, the needs of the individual, whether there are dependents, and the extent of cooperation among family members.

It is important to note that the responsibilities of a conservator are different from those of a guardian — though the same person may be appointed to serve in both roles. Ultimately, guardians can be said to make personal decisions on behalf of the protected person, such as medical or housing decisions. In contrast, conservators make decisions and take action regarding property and finances.

Conservatorships must be established in the probate court. Even under the best of circumstances, these cases are often highly emotional, and the rules surrounding the appointment, removal, and duties of a conservator can be confusing. As you look deeper into conservatorships, it may prove important to consult with an experienced probate and conservatorship attorney, who can fight for your rights and the well-being of others.

Interested in learning more? Let’s explore the powers, duties, and responsibilities of a Michigan conservator in a bit more depth:

How Is a Conservator Appointed?

Generally speaking, a conservator is appointed in three main steps, as the Michigan Bar Association explains in a writing:

A petitioner files with the courts to begin a proceeding.
The court takes action to review the facts and ensure that proper procedures are followed, such as appointing a guardian ad litem to represent the subject of the petition.
A hearing is held, at which the judge will determine if a conservatorship is required based on “clear and convincing evidence.” If so, the court will then appoint a conservator who is suitable and willing to serve.

When is a conservatorship necessary?

In Michigan, the court may appoint a conservator or make another protective order in situations where:

The individual is unable to manage their property and business affairs effectively for reasons such as mental illness, mental deficiency, physical illness or disability, chronic use of drugs, chronic intoxication, confinement, detention by a foreign power, or disappearance.
The individual has property that will be wasted or dissipated unless proper management is provided
Protection is needed in order to obtain or provide money that is needed for the individual’s support, care, and welfare
The individual is mentally competent but requests a conservator’s appointment due to age or physical infirmity

During a typical conservatorship proceeding, the court may have a guardian ad litem, physician, or mental health professional examine or evaluate the subject of the petition in order to consider whether there might be an appropriate alternative to conservatorship, or consider “limiting the scope and duration of the conservator’s authority” in situations where conservatorship is appropriate.

Broadly speaking, the court’s goal is to “encourage the development of maximum self-reliance and independence of a protected individual,” and “shall make protective orders only to the extent necessitated by the protected individual’s mental and adaptive limitations and other conditions warranting the procedure.”

This could result in the court narrowing the scope of the conservatorship by, say, authorizing the protected person to autonomously handle part of their money or property outside of the supervision of the conservator.

Who can petition for the creation of a conservatorship?

There are multiple parties who may petition for a conservator’s appointment, including:

The individual to be protected
An interested person in the individual’s estate, affairs, or welfare, such as a parent or guardian
A person who might be adversely affected by a lack of effective management of the individual’s property or business affairs

A petition for conservatorship must explain the petitioner’s interest, explain why a conservator’s appointment is necessary, and state some crucial information, including

the name, age, residence, and address of the individual to be protected
the name and address of their guardian, if any
the name and address of the nearest relative known to the petitioner
a general statement of the individual’s property with an estimate of the value of the property, including compensation, insurance, a pension, or an allowance to which the individual is entitled

Who can be appointed as a conservator?

Under Michigan law, the court may appoint “an individual, a corporation authorized to exercise fiduciary powers, or a professional conservator” to serve as conservator of a protected individual’s estate.

Broadly speaking, consideration for appointment uses the following order of priority:

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.
A parent of the protected individual or a person nominated by the will of a deceased parent.
A relative of the protected individual with whom he or she has resided for more than 6 months before the petition is filed.
A person nominated by the person who is caring for or paying benefits to the protected individual.

A person named in the categories above may also designate a substitute to serve in their place, which transfers the priority to the named substitute. If multiple parties have equal priority, the court will select the person the court considers best qualified to serve. The court may also pass over a person having priority and appoint a person having a lower priority or no priority, if it deems that it is in the protected person’s best interest to do so.

Generally speaking, the court may require a conservator to furnish a bond “conditioned upon faithful discharge of all duties of the conservator’s trust according to law, with sureties as the court specifies.”

Conservators are entitled to reasonable compensation from the estate, if not otherwise compensated for services rendered.

When Does a Conservatorship End?

A conservatorship can be modified or terminated in a number of different circumstances. Generally speaking, the protected individual, the conservator, or another interested person can petition for a termination of the conservatorship at any time.

The court may also remove a conservator for good cause upon notice and hearing, or accept a conservator’s resignation. A conservatorship also terminates upon the death of the conservator. Upon the conservator’s death, resignation, or removal, the court may appoint another conservator, who succeeds to the title and powers of their predecessor.

What Are the General Powers, Duties, and Responsibilities of a Conservator?

As EPIC puts it:

“In relation to powers conferred by this part or implicit in the title acquired by virtue of the proceeding, a conservator shall act as a fiduciary and observe the standard of care applicable to a trustee.”

More specifically, the conservator is responsible for a number of specific duties and responsibilities, including:

Maintaining Inventory and Records

Very shortly after appointment, a conservator is required to prepare and file a complete inventory of the estate subject to the conservatorship, and provide a copy to the protected individual and other interested persons. Conservators are expected to keep suitable records of their activities relating to the administration of the protected individual’s estate, and be ready to exhibit those records upon request from an interested person.

Providing Regular Accounts

A conservator is expected to account to the court at least once per year, upon resignation or removal, and at other times as directed by the court. A conservator may also be asked to submit to a “physical check of the estate to be made in any manner the court specifies.”

Acting In the Best Interests of the Estate

A conservator is a fiduciary, meaning that they have a duty to act with undivided loyalty, impartiality, care, and prudence. Fiduciaries are expected to keep assets held in the fiduciary capacity separate from their own, and conform to the Michigan prudent investor rule.

For conservators, this means taking actions that are in the best interest of the protected individual, while avoiding self-dealing and conflicts of interest.

Generally speaking, EPIC states that “a sale, encumbrance, or other transaction involving the investment or management of estate property in which the conservator has a substantial beneficial interest or that is otherwise affected by a substantial conflict between the conservator’s fiduciary and personal interests, is voidable” unless:

The transaction is approved by the court after notice
The transaction involves a contract entered into or claim acquired by the conservator before the person became or contemplated becoming conservator.
The transaction is otherwise permitted by statute.

Administering the Protected Individual’s Estate

The conservator is conferred a broad array of powers in order to administer the protected individual’s estate, including but not limited to:

Collecting, holding, or retaining estate property
Receiving an addition to the estate
Continuing or participating in the operation of a business or other enterprise. Consenting to the reorganization, consolidation, merger, dissolution, or liquidation of a corporation or other business enterprise.
Investing or reinvesting estate property, in accordance with the Michigan prudent investor rule.
Depositing estate money in a state or federally insured financial institution
Acquiring, disposing of, developing, or managing estate property, including land in another state. This includes making an ordinary or extraordinary repair or alteration in a building or other structure, demolishing an improvement, or razing an existing or erect a new party wall or building.
Voting a security, in person or by general or limited proxy. Selling or exercising stock subscription or conversion rights.
Insuring estate property against damage or loss
Borrowing money to be repaid from estate property or otherwise.
Advancing money for the protection of the estate or the protected individual, and for all expenses, losses, or liabilities sustained in the estate’s administration or because of the holding or ownership of estate property.
Paying or contesting a claim; settling a claim by or against the estate or the protected individual by compromise, arbitration
Paying taxes, assessments, compensation, or other expense incurred in the estate’s collection, care, administration, and protection.
Employing a person, including an auditor, investment advisor, attorney, or agent, to advise or assist in the performance of an administrative duty

Broadly speaking, conservators also have distributive powers, and may expend or distribute estate income or principal “for the support, education, care, or benefit of the protected individual or the protected individual’s dependents” based on factors such as the recommendation of a guardian, the size of the estate, and the accustomed standard of living of the protected individual and their dependents.

In certain situations, a conservator for a protected individual other than a minor also has the power to make a gift to charity or another object, as the protected individual might have been expected to make, as long as they stay below a certain threshold.

The conservator is also expected to take action in the event of the death of the protected individual — including delivering their will to the court, informing the personal representative named in the will of the delivery, and retaining the estate to be delivered to a duly appointed personal representative.

The court may also limit the powers of a conservator. The court also has powers over the protected individual and their estate and business affairs, which it may exercise directly, or through a conservator. Finally, the court may exercise or approve certain actions only after a hearing to determine whether it is in the protected individual’s best interest — such as renouncing or disclaiming an interest, or changing a beneficiary under an insurance and annuity policy.

Have Any More Questions About Conservatorships in Michigan?

If you are ever in a position where you must consider conservatorship for a loved one, it’s important to be prepared. Our probate attorney Dean E. Patrick understands the ins and outs of the complex Michigan probate court system, and can provide expertise and assistance with matters including:

Establishing, terminating, modifying, or contesting a conservatorship
Defending your current position as conservator
Removing an acting conservator who has failed in their duties
Filing conservatorship accounts

If you have further legal 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 consultation initial consultation. You may also click here to get in touch online.

Conservatorship matters are emotional and difficult, and the Michigan probate courts can be tricky; it’s important that you take steps to receive the expert legal advice you and your loved ones deserve. 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.

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

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.

Understanding Intestate Succession: What Happens If Someone Dies Without a Will in Michigan?

Patrick & Associates, PLLC — Thu, 29 Oct 2020 04:42:13 GMT

If someone passes away without a will in Michigan, many of their assets will become subject to our state’s rules of intestate succession. Broadly speaking, this means that the courts will step in and make determinations about how the decedent’s property will be distributed among their surviving family members. Anyone who stands to inherit under the statutes of intestate succession is known as an heir.

Dying intestate can make an incredibly difficult period even more complex and time-consuming for your survivors, particularly if there needs to be a determination of heirs — which can add a significant degree of time and effort to the already long and costly process involved in administering an estate.

Just as importantly, if you do not set down your wishes in a will or guide the distribution of your property through other estate planning mechanisms, such as a trust, then your assets will be distributed following the strict guidelines set down by Michigan law. This means that your most treasured assets will pass completely outside of your control, and could end up going to some people you might have preferred to omit or disinherit.

Michigan Intestacy Statutes: A Brief Overview

Intestacy laws guide how an estate should be settled in the absence of a will. Michigan’s Estates and Protected Individuals Code (EPIC) states that any part of a decedent’s estate not effectively disposed of by will passes by intestate succession to the decedent’s heirs. This might occur if the decedent dies without leaving any valid will, or if they omit certain items from their estate plan.

Non-probate assets are not subject to intestate succession. Generally speaking, this category includes assets held in a trust; property co-owned as joint tenants or tenants by the entireties; and securities, financial accounts, retirement funds, and other assets with a designated “pay on death” or “transfer on death” beneficiary.

Michigan law sets down a particular order of succession by which heirs stand to inherit when an individual who dies intestate — and how much each party might ultimately receive from the estate. Broadly speaking, Michigan law gives highest priority to the surviving spouse of the decedent, followed by their children and grandchildren, then parents and siblings, followed by more distant relatives.

Intestate Succession

If a decedent is survived solely by a spouse, with no descendants or surviving parents, then the spouse will receive the entire intestate estate.

If a decedent is survived by a spouse and descendants who are also descendants of the surviving spouse, then the spouse receives a fixed share of the estate, plus half of the remaining balance of the intestate estate. As of 2020, the amount that a spouse will receive is the first $239,000 of the estate, with the decedents dividing the remaining share.*

*MCL Section 700.1210 states that for decedents who die after December 31, 2000, the specific dollar amounts listed under Michigan’s intestacy statutes shall be multiplied by the cost-of-living adjustment factor for the calendar year in which the decedent dies. Michigan’s cost-of-living adjustment factor has been set to 1.593 for calendar year 2020. More information and a record of historical adjustments and dollar amounts can be found here.

If the decedent is survived by a spouse and one or more parents, then then the surviving spouse receives the first $239,000* of the estate, plus three-quarters of any balance of the intestate estate.

If the decedent is survived by a spouse and one or more descendants who are not descendants of the surviving spouse, then the surviving spouse will receive the first $239,000* of the estate plus half the balance of the remaining intestate estate.

If none of the decedent’s surviving descendants are descendants of the surviving spouse, then the surviving spouse receives the first $159,000,* plus half of any remaining balance of the intestate estate.

Next, any part of the intestate estate that does not pass to the decedent’s surviving spouse — or the entire intestate estate if there is no surviving spouse — passes in the following order to the following individuals who survive the decedent:

Descendants by representation (e.g., children and grandchildren of the decedent)
Surviving parent or parents
Descendants of the decedent’s parents or of either of them by representation (e.g., siblings, nieces, and nephews of the decedent)
Paternal and maternal grandparents and their descendants (or to one side of the family if there is no surviving grandparent or descendant of a grandparent on the other side)

Finally, if there are no takers under any of the provisions mentioned above, the intestate estate passes to the state.

Other Key Considerations

In addition to these broad rules of succession, here are some important things to keep in mind about intestate inheritance in Michigan:

When property is distributed “by representation,” this means that the property is divided into as many equal shares as there are surviving descendants in the nearest generation that contains one or more surviving descendants (plus deceased descendants in the same generation who left surviving descendants, if any). Each surviving descendant in the nearest generation is allocated one share. The remaining shares, if any, are combined and then divided in the same manner among the surviving descendants of the deceased descendants.
Children of the deceased stand to inherit as long as they are legally recognized by the state — this includes adopted children, as well as children born out of wedlock.
For the purposes of intestate succession, an individual must survive the decedent by at least 120 hours in order to inherit.
Under Michigan intestacy laws, a relative “of the half blood” (such as a half-sibling) inherits the same share he or she would inherit “if he or she were of the whole blood.”
Immigration status does not affect an heir’s inheritance. Under Michigan law, an individual is not disqualified to take as an heir because he or she (or an individual through whom he or she claims) is or has been an alien.
An individual who is related to the decedent through two lines of relationship is entitled to only a single share, based on the relationship that would entitle the individual to the larger share.
A debt owed to a decedent is charged only against the intestate share of the debtor, and not against anyone else’s share. If the debtor predeceases the decedent, the debt is not taken into account in computing the intestate share of the debtor’s descendants.
Property the decedent gave to an heir during his or her lifetime is only counted as an advancement against the heir’s intestate share if the decedent or heir acknowledges in writing that the gift constitutes an advancement or should be taken into account in computing the division and distribution of the decedent’s intestate estate.

Michigan Intestacy: Stories and Examples

As you can see from the matters we’ve already discussed, intestate succession can be long, drawn-out, and quite complicated for everyone involved. This process is never easy, and it can become even more complex if the decedent has a large or complicated family tree, or if it is difficult to make contact with more distant heirs.

To help illustrate the ins and outs of intestate succession, let’s explore some example scenarios — including a fairly straightforward intestacy case in which someone dies without a will, and one in which intestacy guidelines might run counter to a decedent’s wishes.

By the Numbers

Sam and Alex have been married for some time. They have two grown kids, who have not yet married or had children of their own. Eventually, Sam passes away, without leaving a will.

After taking an account of all of the solely owned property and assets that Sam left behind, the value of the intestate estate is somewhere around $320,000. In this case, Alex is entitled to receive a fixed amount from the estate — $239,000, as of 2020* — plus half of the remaining balance of the estate (which comes to $40,500). That brings Alex’s total to $279,500. The remaining amount of the estate (another $40,500) is then divided equally among Sam and Alex’s two children.

Maintaining Control

A married couple, Felix and Sandra, stopped talking with their surviving siblings after a bitter probate court fight.

Felix and Sandra had a modest estate, and did not want for their siblings to receive any part of it. However, while Felix and Sandra understood the need to plan ahead, they kept making excuses and putting off writing their wills. Before they got around to it, Sandra passed away. Weakened by the grief from the loss of his wife, Felix passed away within the month.

With no living parents or children, their entire estate was distributed to the very people they did not want: their surviving siblings.

If you do not plan, the probate process will make important decisions for you. Felix and Sandra could have maintained control when they were gone and disinherited their siblings if they had created wills or trusts.

The Importance of Estate Planning

If you want to maintain control over your property and ensure that your wishes are followed, even when you’re gone, then it’s incredibly important to develop a comprehensive estate plan with an experienced Michigan probate attorney.

If you become incapacitated, and even when you’re gone, estate planning keeps you in control. Estate planning is important for individuals at every stage of life. Whether you’re single, married, or cohabitating, estate planning is a powerful way to:

Help ensure the distribution of your assets in a manner appropriate for your circumstances
Maximize the assets available to your beneficiaries when you have passed
Give yourself peace of mind, knowing you minimized the stress of your circumstances for your family
Assure your partner gets the assets and control you want them to have
Minimize or eliminate the cost of probate fees and taxes on your estate
Allow for immediate distribution of your assets
Avoid disagreements and conflicts among family after you’re gone

There are a variety of tools, including wills and trusts, 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.

An experienced probate attorney such as our own Dean E. Patrick can help you understand the unique variables of your situation, and empower you to take the appropriate steps to protect your assets and your loved ones. Mr. Patrick’s extensive knowledge of Michigan probate ensures you will get the legal help you need when it’s time to take care of your estate planning — including writing a will, establishing a trust, creating a durable power of attorney, or understanding the ins and outs of guardianship and conservatorship.

You Don’t Have to Go Through It All Alone

Interested in learning more about Michigan’s unique laws of intestate succession? Curious about the estate planning mechanisms that can help put you in control?

Your Michigan probate attorney Dean E. Patrick is here to help. Mr. Patrick is a licensed Michigan lawyer specializing in 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.

Whatever your situation, Mr. Patrick and his team of trial lawyers are keen on hearing your circumstance and even keener in finding a solution to a desired outcome. Contact probate attorney Dean E. Patrick at his Southfield, Michigan office at (248) 663-2566 or click here to arrange your initial consultation online.

Formal, Informal, and Supervised Estate Proceedings in Michigan

Patrick & Associates, PLLC — Sat, 24 Oct 2020 04:50:55 GMT

The passing of a loved one can be incredibly difficult — particularly when you are put in the position of helping guide their estate through Michigan’s complex and intimidating probate court system.

In Michigan, the probate court has jurisdiction over matters that relate to the settlement of a deceased individual’s estate, including:

The internal affairs of the estate
Estate administration, settlement, and distribution
Declaration of rights that involve an estate, devisee, heir, or fiduciary
Construction of a will
Determination of heirs

The legal aftermath that follows when someone passes away is commonly referred to as probate or estate administration. With that said, it’s important to recognize that there are different ways to approach this process — and these proceedings may be formal or informal, supervised or unsupervised.

What goes into supervised probate, and what factors should be considered as you look to the future and weigh all of your options? Let’s explore these important concepts in more depth.

Formal and Informal Probate

Broadly speaking, the administration of a decedent estate can be commenced by filing an application for an informal proceeding, or a petition for a formal testacy proceeding.

Formal administration can be supervised or unsupervised. A request for supervised administration can be made as part of a petition for formal proceedings, or requested by petition at any time.

As defined by Michigan’s Estates and Protected Individuals Code (EPIC), “formal proceedings” are administrations conducted before a judge with notice to interested persons.

“Informal proceedings” mean proceedings for probate of a will or appointment of a personal representative conducted by the probate register without notice to interested persons.

In a nutshell, informal proceedings require much less direct interaction with the court and give the personal representative more flexibility and authority to act on behalf of the estate. As the Probate Court of Kalamazoo County notes,

Some features of an informal probate are that no court hearings are necessary, a personal representative (sometimes referred to as an executor) is appointed by the court and given the authority to probate the estate, and most of the activities involved in probating the estate are done without court involvement.

As a result, informal proceedings are used in situations where probate is expected to be somewhat less complex — whether due to fewer creditors to the estate, fewer estate assets, or fewer disagreements or conflicts among the decedent’s survivors.

Formal proceedings are more desirable in situations where there is a need for immediate certainty, or when there is a conflict among interested parties that court supervision can help resolve or prevent. Because a formal approach also results in an order of the court, it can provide some protection to the personal representative — allowing them to move forward with less concern of future claims against themselves or the estate.

Supervised Administration of an Estate

As noted, the administration of an estate in Michigan may also be supervised or unsupervised. As defined by EPIC, supervised administration occurs:

As a single in rem proceeding to secure complete administration and settlement of a decedent’s estate under the court’s continuing authority that extends until entry of an order approving estate distribution and discharging the personal representative or other order terminating the proceedings.

In other words, supervised administration provides a single, comprehensive, and formal settlement process, wherein the court oversees and approves of essentially all aspects of the administration process — including appointing the personal representative, making a determination of heirs, determining the validity of the decedent’s will, and approving the distribution of all estate assets.

The personal representative or any interested person — such as an heir, devisee, or creditor to the estate — may file a petition for supervised administration at any time. A petition for supervised administration may also be joined with a petition in a formal testacy or appointment proceeding.

Broadly speaking, the court might order supervised administration of an estate in a few different circumstances, namely:

If the decedent’s will directs supervised administration (unless the court finds that circumstances bearing on the need for supervised administration have changed since the execution of the will and that supervised administration is not necessary)
If the decedent’s will directs unsupervised administration, the court will only order supervised administration “on a finding that it is necessary for protection of persons interested in the estate”
In other cases, the court can also order supervised administration if it finds it to be “necessary under the circumstances”

Unless otherwise restricted by a court order, a supervised personal representative generally has all the standard duties and powers afforded to a personal representative — with the significant exception that the PR “shall not exercise the power to make a distribution of the estate without prior court order.” This includes partial distributions.

Under Michigan Court Rules, a supervised personal representative must also file some additional documents with the court and serve copies on the interested persons, including some additional accountings, notices, affidavits, and any other documents “as are ordered by the court.”

An estate being handled through supervised administration must be closed by an order for complete estate settlement. The personal representative or another interested person may petition to terminate supervision of administration at any time during the supervised administration.

When Might Supervised Administration Be Considered?

As noted above, supervised administration may be ordered when it is deemed “necessary for protection of persons interested in the estate,” or when it is directed by the decedent’s will.

With that in mind, it is important to note that supervised administration is not necessarily common. As a writing by the Probate Court of Kalamazoo County puts it succinctly, “only a very small percentage of decedent’s estates go through supervised proceedings.”

Supervised administration is generally more complex, more demanding, and more time consuming than other types of proceedings, including unsupervised formal probate. Unsupervised administration offers more flexibility to personal representatives, and, because there is less involvement from the court, this process often moves more swiftly; costs less in filing fees and other expenses; and typically offers a greater level of privacy to all parties associated with the estate.

Still, these proceedings certainly have their place. Supervised administration may be considered if the decedent’s estate is particularly large, valuable, or complex. This type of estate administration may also be necessary when there is an interested party who is considered a protected person, such as an heir or beneficiary who has a disability. What’s more, supervised administration can help minimize the potential for disputes, conflicts, and claims against the estate in some cases. Because of the strict oversight of the court, there is less of a possibility that estate assets will be mishandled or neglected — which can provide some much-needed peace of mind.

As the Probate Court of Kent County notes in a writing:

Supervised administration does force the personal representative to operate within a formal structure and it may give heirs and devisees some comfort to know that the personal representative is responsible to the court.

The post continues:

The advantages and disadvantages should be discussed with an attorney and the choice should be made based upon the circumstances of each estate.

These are complex matters, and the way forward is not always immediately clear. An experienced local probate attorney can help you gain a better understanding of the crucial distinctions between the different types of estate administration proceedings available in Michigan, while also helping you navigate the entire process from beginning to end with guidance and answers tailored to your specific circumstances.

Looking to Learn More About Supervised Administration or Other Aspects of Michigan Probate?

Coming to terms with a loved one’s passing is a difficult and emotional process – and one that is only made more fraught when you need to deal with intricate legal matters at the same time. Throughout this trying time, it’s important to have an experienced and professional advocate on your side, one who can patiently help you understand the ins and outs of probate and estate administration in your area.

Attorney Dean E. Patrick can provide the assistance and support that you need as an estate is guided through the Michigan probate courts — whether through formal, informal, or supervised proceedings.

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 and estate administration, including (but certainly not limited to) general probate litigation, will and trust contests, beneficiary disputes, guardianships, and conservatorships.

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

Have any more questions about different methods of estate administration? Ready to get started? Contact Mr. 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.

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.

Amending or Updating a Will in Michigan

Patrick & Associates, PLLC — Mon, 19 Oct 2020 04:18:24 GMT

A will is an important estate planning document for anyone who is looking to prepare for the future care of their family and assets. Wills are one of the most cost-effective ways to plan for the distribution of your estate. If you do not choose, the State makes those crucial decisions for you — and your most treasured assets may end up being distributed in a way that does not align with your wishes and goals.

Meanwhile, a will also offers other practical benefits. This simple tool can empower you to nominate someone you trust to handle your affairs in the probate court; nominate a guardian to handle the care, custody, and control of your minor children; and nominate a conservator to handle the financial affairs of your minor or incapacitated adult children or loved ones.

Wills facilitate the probate process and, if executed properly, can help to avoid or minimize the potential for contests and prevent family disagreements after you are gone.

Simply put, a will is a way to take care of those you love and all that you have worked hard for. As with other important estate planning mechanisms, it is important to remember that a will is not necessarily a “set it and forget it” document. We all acquire assets and undergo countless changes over the course of a lifetime. Along the way, it is important to regularly reassess your will and other estate planning tools, to assure that they reflect your circumstances and your goals.

Updating, Amending, or Replacing a Last Will

Broadly speaking, there are two primary ways to update or amend a will in Michigan:

to add a codicil or similar writing that clarifies or modifies some or all of the existing will, or
to revoke and replace the existing will by creating a new one

Let’s explore both of these processes in a bit more depth:

Supplementing or Updating a Will With a Codicil

Black’s Law Dictionary defines a codicil as:

an addition or supplement to a will, either to add to, take from, or alter the provisions of the will.

In other words, you may think of a codicil as an amendment to a will. It may revise or update some portion of the existing will, or provide additional supplemental information. Generally speaking, a formal codicil is considered to be valid if it follows the same standards used to execute the original will. That is:

Put in writing
Signed by the testator or in the testator’s name by some other individual in the testator’s conscious presence and by their direction
Signed by at least two individuals, each of whom signed within a reasonable time after he or she witnessed either the signing of the will (or the testator’s acknowledgment of that signature or acknowledgment of the will)

With that said, it is important to remember that Michigan law also acknowledges other writings intended as wills, even if they were not necessarily executed in compliance with the guidelines above. This means that a document may be considered valid if a proponent can establish, by clear and convincing evidence, that the decedent intended the writing to constitute a partial or complete revocation of their will; an addition to or alteration of their will; or a partial or complete revival of a formerly revoked will.

Under Michigan law, there may also be other ways to modify or update an existing will without formally replacing it — such as updating a separate writing referred to in the will, which identifies the distribution of certain types of tangible personal property. This writing,

may be referred to as one to be in existence at the time of the testator’s death; it may be prepared before or after the execution of the will; it may be altered by the testator after its preparation; and it may be a writing that has no significance apart from its effect on the dispositions made by the will.

To be admissible as evidence of intended disposition, the writing must be either in the testator’s handwriting or signed by the testator at the end, and must describe the items and the intended devisees with reasonable certainty.

You don’t have to deal with these confusing guidelines alone. An experienced estate planning attorney can help you understand and address all of the legal formalities associated with amending, revising, or updating a will, and help you to execute a writing or document that works for your circumstances. A knowledgeable legal professional can also help you to consider all of your options, which may include revoking an existing will and creating a new one to replace it.

Replacing a Prior Will by Creating a New One

In order to help mitigate the potential for contests or confusion, it may be advisable to write an entirely new will, and expressly revoke the existing one in the process.

Generally speaking, a will prepared with the assistance of an attorney will contain language to the effect of: “This is my will and I revoke any prior wills and codicils.” When executed properly, this means that the current document nullifies previous writings.

Previous wills may also be revoked through the execution of a subsequent will that revokes the previous will “by inconsistency.” Under Michigan law, the testator is presumed to have intended a subsequent will to replace rather than supplement a previous will if the newer will “makes a complete disposition of the testator’s estate.” If this presumption arises and “is not rebutted by clear and convincing evidence,” then the previous will is revoked, and only the most recent will is operative upon the testator’s death.

To prevent any confusion stemming from having multiple documents, the testator or another person acting on their direction may also intentionally perform “a revocatory act on the will” — including “burning, tearing, canceling, obliterating, or destroying the will or a part of the will.”

As you consider revoking and replacing your will, remember that an attorney can be an invaluable partner — helping you to execute these documents effectively and completely, while taking time to consider the specifics of your unique circumstances.

“When Do I Need to Review or Update My Will?”

Setting up a will isn’t always the most pleasant thing to think about — so it’s no surprise that many people are reluctant to go back and review their will over time. Indeed, many individuals will simply set their wills aside, perhaps for years or decades on end.

However, it’s important to remember that your life is always moving forward, and your circumstances are always changing. After a few years, you may wish to name a new guardian for your children or nominate a new personal representative. You may want to change who you list as a beneficiary, and how much of an inheritance you leave behind.

As a result, it’s helpful to make reviewing your will a regular practice. Sometimes, life events can actually make the provisions you set down in your will obsolete or outdated — say, if you are predeceased by one of your beneficiaries, or if you sell or dispose of an asset before you pass away. Similarly, changes in your personal, professional, or financial situation may cause you to rethink things, and make choices that differ from what’s set down in your documents.

Generally speaking, it is a sound practice to consult with your estate planning attorney to review potential additions or changes to your will every few years.

A number of life events may also be cause to review and revise your estate plan, including:

The death of a loved one (particularly an individual named in your will to receive estate assets)
Marriage or divorce
Acquiring new assets
Disposing of assets listed in your will
Experiencing a significant change in the value of your property
The birth or adoption of children and grandchildren
Minors reaching the age of majority
The incapacitation of a loved one
Significant changes in your personal relationships

The Importance of Working With an Experienced Estate Planning and Wills Attorney

Considering the importance of reviewing or updating your will? Looking to create an estate plan that will suit your long-term goals? Don’t hesitate to get in touch with our Attorney Dean E. Patrick to continue the conversation.

Mr. Patrick can help you set a plan for yourself 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, and powers of attorney.

Mr. Patrick has the experience to walk you through the entire process of creating or reviewing a last will that will truly protect your family, and ensure that property is handled in the manner you decide.

The only things that go away with time are snowflakes, youth, and opportunities. You have an opportunity to plan for yourself and your loved ones. Don’t let it pass.

At 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 prepare for the future.

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.

Attorney - Patrick & Associates, PLLC

Important Considerations for Funding a Living Trust

What Is a Living Trust? A Brief Overview

Don’t Leave an Empty Vessel: What Goes Into Funding a Trust?

Looking for Assistance with Trust Creation, Administration, or Issues?

What Does “Protected Individual” Mean in the Michigan Probate Courts?

What Does “Protected Individual” Mean in the Michigan Probate Courts?

Guardianships, Conservatorship, and Protected Individuals

A Brief Intro to Michigan Guardianship

A Brief Intro to Michigan Conservatorships

Keep the Conversation Going with Metro Detroit’s Guardianship and Conservatorship Attorneys

Should Digital Assets Be Part of Your Estate Plan?

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

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

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

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

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

What Is a No-Contest or Penalty Clause?

Will a No-Contest Clause Always Be Enforced?

What Constitutes Probable Cause for a Will or Trust Contest?

Get the Experienced Insight of a Michigan Estates and Probates Attorney

About The Patrick & Associates, PLLC.

Can a Trustee Be Challenged or Removed?

Petition for Removal of a Trustee

Remedies for Breach of Trust

When Can You Commence Proceedings?

Understanding a Trustee’s Rights and Liabilities

Potential Outcomes and Next Steps

Probate Litigation Is Complex. You Don’t Have to Go Through It Alone

What Is a Testamentary Trust?

What Is a Testamentary Trust?

How Do Testamentary Trusts Work?

Why Use a Testamentary Trust?

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

Updating Your Estate Plan After a Divorce

What Goes Into Estate Planning?

Updating Your Estate Plan After a Divorce

Revoking your current will and creating a new one

Reviewing and updating your trust documents.

Reviewing and updating your powers of attorney.

Updating your beneficiary designations

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

Can You Challenge or Remove a Personal Representative in Michigan?

Demanding a Bond

Petitioning for an Order Restraining Personal Representative

Petitioning for Termination of Appointment

Probate Litigation Is Complex. You Don’t Have to Go Through It Alone

What Is a Pour-Over Will?

What Is a Pour-Over Will?

Important Considerations About Pour-Over Wills and Your Michigan Estate Plan

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

Organizing and Safeguarding Your Estate Plan

Consult with your attorney

Store your paperwork safely and securely

Share the information with people you trust

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

Get Answers From Trusted Michigan Estate Planning Attorneys

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

Guardianships and Conservatorships

Guardianship

Conservatorship

Supplemental (Special) Needs Trust

Keep the Discussion Going with Michigan’s Probate Attorneys

The Downsides of DIY Estate Planning

The Dangers of DIY Estate Planning

What Is Estate Planning, and Why Is It Important?

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

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

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

Tax and financial considerations

Loved ones with special needs

Property ownership in multiple states

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

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

Understanding Michigan’s Homestead Allowance, Family Allowance, and Exempt Property

Homestead Allowance

Family Allowance

Exempt Property

Selection, Determination, and Documentation

Have Any More Questions About Michigan Probate or Estate Administration?