Law - 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?

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.

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.

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.

How Do I Access a Decedent’s Safe Deposit Box in Michigan?

Patrick & Associates, PLLC — Sat, 06 Mar 2021 01:58:13 GMT

In a previous article for this site, we wrote about the importance of taking care to thoughtfully organize, store, and safeguard your estate planning documents when you have the chance. This includes coming up with a plan to keep your will, trust, powers of attorney, and burial documents safe from displacement, damage, or theft — while ensuring that your family or trusted advisors will be able to access those critical documents when the time comes.

In this post, we wanted to explore a common situation that family members and fiduciaries may encounter on the flip side of the coin — accessing a decedent’s safe deposit box following their passing.

Opening a Decedent’s Safe Deposit Box

There are a number of vital reasons why one may need to access a decedent’s safe deposit box. For one thing, many individuals do ultimately choose to store crucial estate planning paperwork in a safe deposit box to protect it during their lifetimes. In other cases, safe deposit boxes may contain financial records or even personal property that must be accounted for and inventoried as part of the estate administration process.

Michigan law makes provisions for the opening of a safe deposit box following a death. Different procedures exist for interested persons, fiduciaries, and surviving joint lessees.

*Please note that this article will only reference the procedures that apply for decedents who passed after September 30, 1993. To discuss the proper procedures for individuals who died prior to October 1, 1993, we encourage you to contact an experienced Michigan probate attorney to discuss your individual circumstances in more depth.

All Interested Persons

An interested person -— which might include an heir, devisee, child, spouse, creditor, beneficiary, or any other person that has a property right in or claim against the estate of the decedent — can petition the court to open a safe deposit box leased to the decedent by a safe and collateral deposit company, trust company, corporation, bank, or other institution.

The petitioner must have reason to believe that the safe deposit box may contain a will or a deed to a burial plot in which the decedent is to be interred, and the safe deposit box must be located in the county in which the probate court has jurisdiction.

In such a situation, the court may issue an order directing the institution to permit the interested person to examine the safe deposit box in the presence of an office or other authorized employee of the institution.

If a paper purporting to be a will of the decedent or a deed to a burial plot is found in the box, the person named in the order must deliver the will or deed to the probate register, who will then furnish a receipt.

Any item contained in the safe deposit box other than the will or deed cannot be removed from the safe deposit box. All individuals in attendance at the time the box is opened must execute a written statement certifying whether a will or deed to a burial plot was found, and that no other items were removed. This statement must be delivered within seven days after execution to the probate register.

Before the court enters an order, a fee of $10.00 must be paid to the probate register. If the decedent’s estate is administered in a probate court in the state, the party making payment of the fee may file a claim in the estate for that amount, which would be charged as a cost of administration.

Estate Fiduciaries

An appointed fiduciary such as a trustee or personal representative may open a decedent’s safe deposit box and remove its contents However, if the safe deposit box is jointly leased, then the fiduciary may only examine the safe deposit box in the presence of an officer or another authorized employee of the institution.

At the time of the opening of the safe deposit box, all individuals in attendance must execute a written statement certifying as to what, if anything, the fiduciary removed from the box. The fiduciary must serve a copy of that statement to the other joint lessees within seven days of removing the items.

Surviving Joint Lessees

Broadly speaking, if the safe deposit box was leased jointly, any surviving joint lessee will continue to have full access to the safe deposit box after the passing of the decedent.

Because of the ease of access and lack of restrictions, it is often advisable to name a joint lessee on your safety deposit box while you have the opportunity — so that your spouse, child, or a trusted representative can access the contents of the box and move forward with estate administration swiftly and confidently.

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

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

And if you are a trustee, personal representative, or otherwise involved in the administration of an estate, last will, or trust, you probably have questions. We 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.

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

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

Can 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.

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.

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.

Can You Disinherit an Adult Child in Michigan?

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

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

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

Why Would Someone Disinherit a Child in Michigan?

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

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

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

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

Disinheriting a Child in Michigan: Important Considerations

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

As Piwowarski writes for the Michigan Bar Journal:

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

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

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

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

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

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

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

The Downsides of DIY Estate Planning

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

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

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

The Dangers of DIY Estate Planning

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

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

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

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

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.

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

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

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

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

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

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

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

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

What Is Power of Attorney Abuse?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

How Can You Avoid Abuse of Power of Attorney?

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

Be extremely selective when choosing an agent.

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

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

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

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

Consider nominating co-agents.

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

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

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

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

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

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

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

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

What Is a Holographic Will?

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

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

What Is a Holographic Will?

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

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

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

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

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

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

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

When and Why Are Holographic Wills Used?

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

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

The Challenges and Disadvantages of a Holographic Will

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

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

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

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

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

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

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

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

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.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

More specifically, EPIC’s primary purposes are to:

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

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

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

EPIC and the Michigan Probate Court

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

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

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

Proceedings involving trusts.

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

Proceedings that concern guardianships, conservatorships, and protective proceedings.

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

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

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

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

Interested In Learning More About Probate In Michigan?

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

Attorney Dean E. Patrick focuses on:

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

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

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

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.

Who Needs a Power of Attorney?

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

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

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

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

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

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

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

This important mechanism is useful for anyone who:

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

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

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

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

Different Types of Power of Attorney

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

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

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

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

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

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

The Importance of Talking With an Experienced Legal Professional

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

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

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

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

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

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

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.

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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.

Managing Bills and Expenses for a Sick or Aging Parent: What Michigan Families Need to Know

Patrick & Associates, PLLC — Thu, 15 Oct 2020 04:54:42 GMT

For many families, the responsibility for managing an elderly parent’s finances often falls to members of the “Sandwich Generation” — that is, their adult children, many of whom juggle senior care while raising kids of their own at the same time.

If you are considering stepping in and helping an elderly loved one to take care of their bills and expenses, it is important to understand all of the crucial steps you must take — and all of the mechanisms available to help you protect your loved one and empower them to maintain control, should they ever become incapacitated and unable to handle their own affairs.

Should you find yourself in a position where you must take action to manage an aging parent’s bills, expenses, and assets, know that you are not alone.

Many older adults find it more difficult to manage money and financial matters over time, for any number of reasons. Physical restrictions, for example, can make it harder for elderly adults to access their safety deposit boxes, maintain their real estate investments, or even sign checks. Memory loss, dementia, and other cognitive changes can affect a senior’s ability to handle financial matters and communicate effectively with family members or advisors. Many older adults may have been dependent on a spouse to handle the family finances, and find themselves unable to keep up now that they’re gone. Others find themselves coping with health challenges that can make it hard to stay current on their bills — while adding to their expenses, each and every day.

What’s more, financial security experts agree that older adults are uniquely vulnerable to financial abuse or manipulation. In fact, one report cited by CNBC suggests that senior citizens collectively lose more than $3 billion a year to scams and fraud.

For older adults, the consequences of mismanaging one’s finances could be significant, even beyond the very real risk of falling victim to fraud or undue influence. Failing to keep up with mortgage or rent payments could result in foreclosure or eviction. Forgetting to pay the utility bills could result in losing access to heat or power. Reckless spending may cause seniors to lose their nest eggs, or permanently damage their credit.

Talking About Finances With a Senior Loved One: Getting the Conversation Started

Many older adults expect to turn to their adult children for assistance with handling financial matters. However, studies suggest that there may be somewhat of a breakdown when it comes to communication on these important topics.

A 2016 study published by the financial services firm Fidelity, for instance, found that 69 percent of parents expect one of their children to “help manage their investments and retirement finances” — yet “more than one-third (36 percent) of the kids identified as filling this role didn’t know this.“

The same study found that 34 percent of parents have not had “detailed conversations” about their living expenses in retirement — while another 16 percent “have not had any conversations on the topic at all.”

As a loving and concerned family member, it may fall to you to take action and move these crucial discussions forward. As with conversations around estate planning, probate, and other sensitive life topics, it may help to start these conversations early — that is, before you and your parents face an emergency or crisis that requires quick action. As much as possible, work with your parents, and be patient and empathetic to their needs and concerns. Don’t expect to handle all of these weighty topics in one go. Many people also find it beneficial to begin more casually, and enter into these big conversations by starting small — by, say, focusing on a recent news story, or talking about a situation faced by a family friend or relative.

In other cases, it may help to bring in an outside mediator. An experienced and trusted attorney, for instance, can help you advance the conversation while addressing everyone’s concerns and helping you to gain a better understanding of the many courses of action available based on your unique situation.

Of course, there may also be a time when adult children “need to be more hands-on,” as Eileen Ambrose and Sandra Block once noted in an article for Kiplinger. This may include getting to know your parents’ financial advisors, while also taking steps to learn more about their assets “and how they have been spending money” — such as helping your parents to review their monthly bills, credit card statements, insurance policies, benefit plans, and other financial records.

Taking time to perform this oversight may result in you noticing some red flags that something is amiss — such as your parent regularly missing important bill payments, or racking up unusual charges on their bank or credit card statements. If an elderly loved one is unable to talk about their finances, explain their decisions, or keep track of different accounts and records, this could also be an indicator that additional help is warranted.

Managing a Sick or Aging Parent’s Finances

Whether your loved one simply needs an extra set of eyes to safeguard their financial well-being, or requires more significant intervention to protect their finances, it’s important to have an understanding of all of the options and legal mechanisms available.

In some cases, older adults may prefer an arrangement that empowers a trusted family member to help out, such as creating a joint bank or credit card account. As the AARP notes, this is often one of the “easiest” ways “to pay a loved one’s bills and keep track of expenses:”

If your loved one is in the early days of a progressive disease such as dementia or amyotrophic lateral sclerosis (ALS), having a second person on the account is essential. When needed, that person can step in as a money manager to pay bills, make deposits and withdrawals, and monitor the balance to make sure your loved one is not being scammed or financially exploited.

However, this arrangement is not without risks. If an untrustworthy person is granted account access, they could easily steal from the senior. This situation may also open up family members to the responsibility of having to deal directly with creditors, and creating the arrangement could contribute to family discord and disagreements.

Oftentimes, a family member’s options to interface with financial institutions or help a senior parent or loved one manage their finances can be quite limited unless the child is made a fiduciary — that is, someone who is authorized to act on behalf of their parent. A fiduciary is held to a high legal standard of conduct, and is expected to act fairly and put the needs of the individual and their estate above their own.

For Michigan families, there are many different courses of action and legal mechanisms to consider based on your specific situation, including:

Powers of Attorney

A power of attorney for financial matters is a legal document that gives someone of your choosing (known as the agent or attorney-in-fact) the right to handle your financial affairs. A durable power of attorney allows this authority to remain in place should you ever become incapacitated — meaning that you do not need to give up control of your affairs while you still have the capability to manage them, but can sleep well knowing you have a plan in place in case you do not.

Creating a power of attorney does not require the involvement of the court. As long as you are of sound mind and body, you can execute a valid durable power of attorney by signing the document in front of a notary or two witnesses. Powers of attorney can be quite broad or limited in scope, depending on the circumstances. In addition to planning for incapacity, older adults may consider using powers of attorney to grant a trusted loved one the ability to deal with a specific account, access their financial records, pursue claims or actions on their behalf, or handle a specific financial transaction when they cannot manage it on their own.

Trusts

A trust is a written agreement which names an individual who is responsible for managing select property and assets, as directed by a trust agreement. This person is known as the trustee; the person who creates the trust is known as the settlor or grantor.

There are many different types of trusts, designed for any number of different circumstances. Broadly speaking, once a trust is created, the settlor must retitle their chosen assets into it — this could include investments and securities, tangible personal property, bank accounts, business interests, and real estate.

One of the most popular and common types of trusts used in Michigan is the revocable living trust. Also known as an inter vivos trust, this type of trust can be filled, modified, or revoked as long as the grantor is of sound mind. Most commonly, the grantor will name themselves as the trustee, in order to maintain control over the trust assets for as long as they are able to do so. Should the settlor ever become unable to perform their duties as trustee due to incapacity or death, a successor trustee would be granted the legal responsibility of managing the trust assets.

In other cases, an older adult may choose to name a trusted family member or professional fiduciary as the trustee immediately, in order to give them the power to control, maintain, and distribute the trust assets. For example, this could allow an adult child to assume the responsibility for managing investments or selling real property placed into the trust, ensuring that any relevant transactions are able to move forward.

Conservatorship

A conservator is a person appointed by a court to manage the assets, property, and finances of a protected individual. Conservatorships are established when a court determines that an individual can no longer effectively manage his or her own property and financial decisions 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 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.

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.

Anyone interested in an individual’s estate, affairs, or welfare may petition for conservatorship; 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. When considering the need for a conservatorship, the courts will consider if the individual has any other alternative solutions in place, such as a durable power of attorney. Establishing a conservatorship can be complex, time intensive, and may open the door to heated family disagreements and litigation. Bear in mind that the decision to appoint a conservator for an individual is a very serious matter, since, ultimately, the Michigan probate court will take away some of the individual’s basic rights.

Guardianship

If an aging parent has become incapacitated and unable to take care of their basic needs, a guardianship may also be considered.

Broadly speaking, a guardian is a substitute decision-maker for an incapacitated individual (known as the “ward”). Guardians are responsible for looking out for the general well-being and care of their ward. Whereas a conservator is responsible for the care and preservation of all the individual’s assets and property, a guardian is broadly responsible for making medical, housing, and other personal decisions for them. This might include providing suitable food and clothing; providing shelter and determining where the individual lives; applying for specialized services on their behalf; and authorizing or refusing medical care.

As with a conservatorship, establishing a guardianship requires going before the probate court. In order for a guardian to be appointed, a concerned individual must file a petition explaining why the guardianship is needed. A hearing is then 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.

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, Michigan’s Estates and Protected Individuals Code (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.”

You Don’t Need to Face These Complex Decisions Alone

If you are one of the millions of people here in Michigan and around the country acting as a caregiver for an aging parent, it is important to understand all of your options and find a workable path forward.

There are many personal factors and pressing decisions involved when it comes to assuring that your loved one’s finances will be managed, their well-being taken care of, and their wishes carried out when they can no longer make or communicate informed financial decisions for themselves.

Talking with an experienced attorney is a crucial first step to protecting your loved ones. A knowledgeable estate and probate attorney can help you get a handle on the specifics of your unique circumstances, consider all of the courses of action available to you and your family, and prepare in advance for any potential complications or difficulties that may arise.

We’re Here to Help You Protect the Important Things

Interested in discussing incapacity planning for yourself or a loved one? Do you have questions about any type of estate planning tool or technique? Ready to start getting a handle on the specifics of your unique situation?

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

FAQ: ‘How Long Does Probate Take in Michigan?’

Patrick & Associates, PLLC — Thu, 10 Sep 2020 04:10:19 GMT

The probate court is not a comfortable setting for handling an estate. Not only are the emotions and stress high from losing someone dear, the process can either be long and arduous, quick and painless, or avoided altogether. With that said, many people often wonder just how long the probate process will take, from beginning to end.

Realistically, the probate process generally takes less than a year — but It’s important to understand that everyone’s journey through the Michigan probate courts will be unique.

“How Long Does Probate Take in Michigan?”

Though there are always certain “benchmarks” that must be hit during estate administration — such as appointing a personal representative, notifying creditors and settling claims to the estate, distributing estate property, and closing the estate — the process is not necessarily always cut-and-dry.

Just as no two people lived the exact same lives, no two estates will ever face the exact same administration process in the courts.

The length and complexity of probate will come down to many variables, some of which can be hard to predict and control — from the dynamics of the decedent’s family, to the amount of debt that they’re leaving behind, to the estate planning steps they took to simplify or avoid probate ahead of time.

Ultimately, consulting with an experienced and knowledgeable probate and estates attorney may be the best way to gain an understanding of the ins and outs of the process that a decedent’s estate will succumb to in the courts. An attorney can help you get a fuller sense of the probate process, and understand the key benchmarks and timelines to consider — while also addressing concerns such as estate planning and the potential for probate litigation, based on the specifics of your family’s situation.

Based on the circumstances, completing all of the steps involved in settling an estate may take as little as a few months, or could stretch on for more than a year. The amount of time it may take to complete the probate process will depend on a variety of factors, including (but not limited to):

The size and value of the decedent’s estate

The amount of time it takes to administer an estate may depend in large part on what’s actually included in the estate. For example, it may take longer to inventory and gather estate assets that are particularly complex, such as specialized antiques or rare valuables that need to be appraised by an expert. Similarly, if the decedent owned real estate in multiple states, ancillary probate may be required, which can take time and careful management to complete.

On the flip side, the estate administration process may be expedited if your loved one left behind a qualifying small estate, eligible for Michigan’s simplified probate procedures. It is important to consult with an attorney to determine whether or not a small estate might qualify to be distributed by court order or summary administrative proceedings.

Meanwhile, it’s important to remember that there are several types of estate administration used in Michigan, including formal, informal, and supervised administration. The length and complexity of probate may be affected by how much court oversight will be required.

The extent and quality of the decedent’s estate planning

Estate planning is about taking steps to prepare for what will happen to your most important assets, in the event that you become incapacitated or pass away. Estate planning may involve taking advantage of any number of tools and mechanisms, many of which — including trusts, beneficiary designations, and joint ownership — can help an individual to streamline or even avoid probate.

As a result, the amount and quality of estate planning that a person takes on when they have the chance may impact how long the probate process will take in the future. For example, for individuals who pass away without a will, the contents of their estate will be subject to Michigan’s laws of intestate succession — essentially meaning that the state will create a will for them. Not only does this mean that one’s assets may not be distributed in line with one’s wishes, but it can also cause the probate process to drag on, particularly if there needs to be a determination of heirs.

Even if an individual did take some estate planning steps, there may be gaps that can cause the probate process to take longer. Did they fail to account for any important assets? Did they leave room for questions, disputes, or contests to arise? Did they leave unclear or inaccurate paperwork? As an example, it is quite common to see situations where a father tells a son that he is supposed to get “X” amount of the estate — even if his will splits everything evenly.

The actions of the personal representative and other fiduciaries

Settling an estate promptly will require the action of one or more fiduciaries — including the personal representative of the estate, as well as any trustees.

The personal representative is the individual (or group) tasked with guiding the decedent’s estate through probate — including filing the will, collecting and inventorying assets, managing claims against the estate, paying taxes and fees, and ultimately distributing estate assets to the proper beneficiaries.

The probate process may take longer if the decedent did not select a personal representative, meaning that one will have to be appointed. Once a personal representative has accepted the position, they must execute their duties responsibly, effectively, and faithfully. If a personal representative is not responsible about filing paperwork and meeting deadlines, this could cause the estate administration process to drag on.

Probate may also need to extend for longer if the PR (or another fiduciary, such as a trustee or conservator) commits a breach of fiduciary duty — from failing to take proper accounting of the estate, to actively stealing or mismanaging estate property. In such cases, litigation may be required to compel the fiduciary to perform their duties; to remove the fiduciary from their role; or to redress any wrongdoings.

Contests, disputes, and other issues requiring litigation

Contests to wills, trusts, and beneficiary designations can significantly increase the amount of time it takes to complete probate administration.

In Michigan, any interested party — including, but not limited to, an heir, a devisee named in the will, a spouse, or a child of the decedent — may challenge the validity of a will on grounds such as undue influence, fraud, incapacity, improper execution, or forgery.

Disputes to a will may also arise if there are multiple, conflicting wills; missing documents; or notable omissions (such as the decedent’s spouse or one of their children).

The validity of a trust can be similarly challenged, particularly if certain legal formalities are left incomplete or in question. An interested party may pursue litigation in order to terminate, modify, or reform a trust, or dispute the actions of a trustee.

Litigation may also be necessary if there is a contested guardianship or conservatorship associated with the estate.

The number and complexity of claims against the estate

Many people tend to think about estate administration as being all about distributing the decedent’s assets. While transferring the estate assets to the decedent’s beneficiaries is certainly an important part of the process, it is also important to remember that probate is also the time to receive and settle claims against the estate.

In Michigan, there is a set window of time during which the personal representative must reach out to known creditors, and publish notice for unknown creditors to come forward with claims. This notice must include certain relevant information, including the name of the deceased, the name of the personal representative, and the amount of time that creditors have to present their claims before they are barred. Typically, this period for notifying creditors and receiving claims lasts for roughly four months.

In Michigan, claims against an estate are generally handled in a set order of priority, with estate administration and funeral costs taking the highest position. A fiduciary representing the estate may allow, settle, or disallow a claim. Claims can be contested, particularly if a creditor wishes to dispute the disallowance of a claim, or if a fiduciary must challenge an unreasonable, illegitimate, or inappropriate claim.

Probate Can Be Complicated. You Don’t Need to Go Through This Difficult Time Alone.

Curious about how long the probate process may take for yourself or a loved one? Interested in learning more about the actions you can take to simplify, streamline, or avoid probate in Michigan?

As you deal with these important questions, it’s helpful 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 personal representative, an heir, a creditor, a named beneficiary, an omitted child, or a widow/widower, an experienced probate and estate 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 all that goes into it — including wills, trusts, guardianship, conservatorship, and more.

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 E. Patrick 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, and professionalism it deserves at every step of the way.

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