A common question every estate planning lawyer gets is, “How much do you charge for a will?” There is no single answer. A will is not a standardized product. Each will has unique characteristics based on a person’s financial, family, and legal situation.

Estate Planning Is Not Always So Simple

Speaking in broad terms, estate planning attorneys generally offer simple wills on a flat-fee basis, usually between $500 and $1500 dollars, depending on circumstances such as marital status and property. What do we mean by a “simple will”? A simple will is guidance or advice to the Probate Court directing where you want your assets to go after you’ve died. If you own assets over the minimum level of $22,000 in your own name at the time of your death, your estate will go to probate. The will is a part of that probate process.

But now let’s say you have a lot of assets and multiple heirs. You may need to minimize your potential gift and estate tax liability. A simple will may not be the best tool for the job. In fact, you may want to create a trust or employ other strategies, such as charitable giving, which require more than a boilerplate will. This obviously requires more time and skill on the part of the attorney, which translates into a higher flat fee, or in some cases an hourly billing arrangement.

Keep in mind, your estate planning situation may be more complicated than you initially think. If you are divorced and remarried, your will may need to account for children from different marriages, as well as the terms of your divorce settlement. You may also want to consider the relative financial and personal circumstances of your children or other beneficiaries.

Do Not Do It Yourself

Some people think they can save a few dollars by writing their own will using a preprinted form they buy online or at the office supplies store. This is a bad idea. For one thing, laws governing wills and probate are state-specific. A preprinted form is unlikely to fully incorporate Michigan law. Second, preprinted forms often omit important clauses that can actually undermine the intention of the person making the will. This can lead to confusion and unnecessary litigation after the person dies.

Working with a Portage elder law attorney is never a waste of money. To the contrary, it may be one of the best investments you can make to secure your family’s future. Contact the Law Offices of David L. Carrier, P.C., today to schedule a consultation with an attorney who will help you develop a will specifically tailored to your needs.

An executor, or personal representative, carries out the terms and provisions of a deceased person’s will. Typically, the creator of the will (also known as the testator) will name an executor who is responsible for closing out the testator’s estate, which means taking care of any remaining financial obligations and ensuring that beneficiaries named in the will receive their assets.

If the testator does not name an executor, Michigan law specifies, in order of priority, who will be appointed as the testator’s personal representative. The surviving spouse has first priority, but only if he or she is a named beneficiary.

It’s important to name an executor who you trust, like a friend or family member, to ensure that your estate is properly taken care of.

Who May Serve As Executor?

Michigan permits any adult to serve as an executor — except someone who has been convicted of a felony — including adults who live in another state. (Practically, however, it might not be a good idea to name an out-of-state executor.) An adult is anyone who is at least 18 years old. The court is required to appoint your named executor unless someone challenges your selection and presents evidence that the person is incompetent or otherwise unsuitable to serve.

What Are the Executor’s Responsibilities?

The executor’s legal responsibilities include:

• Initiating probate of the will;
• Collecting the testator’s assets and taking an inventory;
• Collecting any debts owed to the testator’s estate;
• Paying any debts claimed against the estate;
• Distributing assets among named beneficiaries; and
• Closing the estate.

Initiating Probate

It’s the executor’s responsibility to open the estate for probate. That involves obtaining a valid death certificate and an original copy of the will, and providing notice to creditors and any other interested parties.

If the executor is not an attorney, he or she should contact an experienced probate attorney to help with the process.

Taking an Inventory of the Testator’s Assets

The executor has to know what the testator owned before he or she can properly distribute the estate. This might involve having items (like jewelry or cars) appraised.

Collecting the Testator’s Debts

One of the first things the executor should do is make sure the testator received all of the salary and benefits owed to him or her. The testator should all inquire into any outstanding debts owed to the estate.

Paying the Testator’s Debts

While some debts die with you, others survive death. For example, the executor must use the estate’s assets to pay any state or federal taxes that the testator might owe.

Distributing Assets

When any creditor claims against the estate have been settled, the executor may distribute assets to beneficiaries named in the will. (This is when the executor may encounter a will contest from someone who claims that he or she should have inherited under the will if not for undue influence, fraud, etc.)

Closing the Estate

Once the claims have been settled and the assets distributed, the estate can be closed. The executor must provide the probate court with evidence that everything has been taken care of.

Contact a Grand Rapids Estate Planning Attorney

If you have been named as the executor of a will, contact one of our experienced Holland probate lawyers today. We can guide you through the probate process. If you are preparing your will, we can also help you choose someone to serve as executor.

Estate planning is an individual process — what works for one person might not be the best option for distributing your assets. For example, you don’t have to create a will in order to dispose of your assets after death. Another option is creating a trust (however, you can also include a trust in a will).

What Is a Trust?

A trust is a legal arrangement in which one person (the trustee) holds legal title to property for another person (the beneficiary). The person who creates the trust is called the grantor or settlor.

One of the benefits of creating a trust is that the settlor has multiple options:

• A revocable trust allows the settlor to alter or even cancel trust provisions during his or her lifetime.
• Trust property isn’t transferred to the beneficiary until after the settlor’s death.
• Irrevocable trusts come in many forms. There is a common misconception that an irrevocable trust cannot be amended or cancelled without the beneficiaries consent, but that is not always true. It depends on the exact type of irrevocable trust that you have.
• A living trust (also called an inter vivos trust) benefits the settlor during his or her lifetime and then transfers assets to a designated beneficiary when the settlor dies. Property put into a living trust is not subject to probate.
• A testamentary trust does not go into effect until the settlor dies. It is included in the settlor’s will and often is used to benefit minors.

These options might seem confusing, which is why you should contact an experienced estate planning attorney to determine which type of trust is right for you.

Creating a Valid Trust

Your trust will fail if you don’t follow certain requirements:

1. The settlor has to intend to create a trust. If the wording in the trust is ambiguous and doesn’t establish that the settlor intends to convey his or her property into the trust for the named beneficiary, then the trust will fail. It’s not enough to say that the settlor will create a trust in the future — the settlor must intend to create the trust now.
2. The settlor must appoint a qualified trustee. A trust cannot exist without a trustee.
3. If the settlor doesn’t actually transfer assets into the trust, then the trust will fail. The settlor must list the assets in the trust and take steps to change the title of those assets.
4. The trust will fail if it doesn’t specifically identify the intended beneficiaries. If the beneficiaries can’t be identified or located, then the trust is not valid.

Luckily, there are ways to correct a failed trust. If it is proven by clear and convincing evidence that the settlor’s intent and the terms of the trust were affected by a mistake of fact or law, then a court may reform the terms of the trust.
You can also ask an estate planning attorney to help you modify or terminate your original trust so that it fully complies with Michigan law and properly distributes your assets.

Contact Us Today

Of course, the best way to ensure that your trust doesn’t fail is to seek professional help. Our experienced Michigan family trust attorneys can you help you create a valid, enduring trust. Contact us today for a free consultation.

Most Michigan residents have some form of retirement savings. The most common types of retirement accounts are IRAs, 401(k) plans, and Roth IRA plans. Each has specific rules governing how and when withdrawals are made. In addition, there are significant estate planning implications for handling retirement accounts.

Is an IRA a Probate Asset?

Unlike most personal property that passes under a person’s will or living trust, retirement accounts usually have designated beneficiaries. If you have an IRA, for example, you can name a primary and contingent beneficiary. Upon your death, the account passes automatically to the primary beneficiary if he or she survives you; otherwise it goes to the contingent beneficiary.

Any such beneficiary designation overrides any contrary provision in your will or trust. This is because a retirement account is not considered an asset of your probate estate or trust unless you specifically name it as the beneficiary. If you fail to name a beneficiary, or all of the designated beneficiaries die before you, the retirement account will then be considered a probate asset. It is a bad idea to name your own estate as beneficiary, however, for tax reasons.

The Tax Implications of Inheriting a Retirement Account

So what are those tax reasons? As you probably know already, with a traditional IRA or 401(k) plan the account owner makes tax-free contributions while they are working. Upon reaching retirement age (usually 70 years and 6 months), the owner must make annual withdrawals, which are taxed at that time. A Roth IRA works in reverse: contributions are taxed when made, not upon withdrawal.

Now, normally when someone inherits property it is not subject to income tax. But if a person inherits a 401(k) or traditional IRA–say a father names his daughter as beneficiary–then income tax is due when the beneficiary makes withdrawals from the account. There is no income tax on an inherited Roth IRA, since tax was already paid when the original owner made contributions.

In many cases, a person will name their spouse as beneficiary of their retirement accounts. This allows the surviving spouse to “roll over” their deceased partner’s IRA or 401(k) into their own retirement account. This preserves the tax benefits until the surviving spouse must begin making withdrawals.

Do I Have to Leave My Retirement Account to My Spouse?

But what if you do not wish to name your spouse as beneficiary? In some cases that may not be possible. Federal law, which governs 401(k) plans and other employee-based retirement systems, automatically designates a surviving spouse as beneficiary. This can only be altered if the affected spouse signs a written waiver during the marriage.

In contrast, you are generally free to name anyone you choose as the beneficiary of an IRA. While the surviving spouse may benefit from the ability to roll over the account, there are many situations where it makes more sense to name another family member as beneficiary. An experienced Holland estate planning lawyer can answer any questions you may have about coordinating your retirement planning. Contact the Law Offices of David L. Carrier, P.C., if you would like to schedule an appointment today.

Losing a loved one is difficult under any circumstances, and it can be challenging to think about financial issues when you are coming to terms with the death emotionally. Yet it is important for families of veterans to know about burial veterans for benefits and some of the services they may be eligible for after losing a loved one. Even if the death is not service-related, the U.S. Department of Veterans Affairs still provides benefits for families of former service members provided that certain conditions are met. What else do you need to know about burial benefits for veterans and how this matter relates to estate planning in Michigan?

Simplification of Veterans’ Burial Benefits from the U.S. Department of Veterans Affairs

According to a news release from the U.S. Department of Veterans Affairs, changes to burial benefits went into effect in July 2014, and those changes were aimed at “simplify[ing] the program and pay[ing] eligible survivors more quickly.” With those new regulations, the VA was permitted to pay a flat rate for burial, plot, or interment allowances. In brief, the VA recently changed its regulations to make the process of obtaining burial benefits for veterans more streamlined.

To make clear the specific types of burial benefits for which veterans can be eligible, the VA provides a fact sheet that clarifies who is eligible and the amount that can be paid out.

Who is Eligible for Burial Benefits?

Typically, as the fact sheet explains, an eligible surviving spouse will be paid automatically when the VA is notified of a veteran’s death, and that eligible spouse will not need to submit a claim. Generally speaking, however, is a surviving spouse has not been paid automatically, then the first living person among the following that files a claim will be paid:

• Surviving spouse of the veteran;
• Survivor of a legal union with the veteran;
• Veteran’s child, whether minors or adults;
• urviving parent(s) of the veteran; or
• Executor/Administrator of the veteran’s estate.

Amount of VA Benefits for Veterans

The amount that the VA will pay in burial benefits for a veteran depends upon whether the death was a service-connected death or a non-service-connected death. First, we can explain the benefits for a service-connected death. What does service-connected mean? In brief, the death must have occurred during active military service. If the veteran’s death occurred on or after September 11, 2001, then the burial allowance from the VA is $2,000. For deaths that occurred before September 11, 2001, the burial allowance is $1,500. A survivor can also be eligible to receive some form of reimbursement for transporting the remains of the veteran if the veteran is buried in a VA national cemetery.

How much can the VA pay in burial benefits for a non-service-connected death? The answer to this question depends on a number of different factors, including the date of death and whether the veteran was receiving care from a VA hospital at the time of death. For veterans not hospitalized in a VA hospital at the time of death, the amount of the burial benefits depends largely on the date of death. The available benefits are as follows:

• If a death occurred on or after October 1, 2016, the VA burial allowance is $300, plus $749 for a burial plot;
• If the death occurred on or after October 1, 2015, but prior to October 1, 2016, the burial allowance is $300 and $747 for a burial plot; and
• If the veteran’s death happened on or after October 1, 2014, but prior to October 1, 2015, the burial allowance is $300 with an additional $745 for a plot.

If the non-service-connected death occurred while the veteran was hospitalized by the VA, then the burial allowances go up to the same amount as the plot allowance. As such, for a death that occurred on or after October 1, 2016, the VA will pay a burial allowance of $749, along with $749 for the plot.

Contact a Grand Rapids Estate Planning Lawyer

If you have questions about burial benefits for veterans, an experienced Portage probate lawyer can assist you. Contact the Law Offices of David L. Carrier, P.C. today.