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Should I get a will or a trust?
Do you need a hammer or a paintbrush? Wills and trusts are just tools that accomplish a goal. A Carrier Law attorney can review your goals to decide which estate planning documents will meet your needs.
What is a living will?
A living will, sometimes referred to as an advance directive, is a document that provides instructions regarding end-of-life care. Michigan does not have a statute that recognizes a living will. That does not mean you can’t have such a document, just that there is no statutory support regarding how it should be used or drafted. Living wills allow you to make your own choices about care while you are alive. A health care power of attorney document is recognized in Michigan and is different than a living will.
What is a living trust?
A living trust is a legal document that states who you want to manage your property if you’re unable to do so, and who receives your assets and how, when you pass away. Once signed, you transfer ownership of your assets into the trust and you can retain control of your property. The living trust property can be managed and distributed without going through the probate court process.
If I have a trust, why do I need a will?
Wills and trusts are separate documents and serve different purposes. The purpose of a will may be to direct that assets that are not currently in a trust be poured into a trust upon your death. You may have assets not properly funded that you want to go to certain beneficiaries named in the trust. If you are involved in a lawsuit when you die, your will can pour assets into your trust so that the named trust beneficiaries get those assets.
I don’t have a lot; do I need a trust?
It is very common for someone to say: “I don’t have a lot.” That is a subjective statement. A free consultation with one of our attorneys can help you determine if a trust is right for you. If you have specific wishes or goals for your assets, it is important to have a trust that will accomplish those goals.
My family isn’t complicated, do I really need a trust?
Probably. Most families will benefit from a trust – but there are exceptions. We work with families who come from all different backgrounds to figure out their needs and goals in order to create an estate plan that works for them individually. No estate plan is the same, just like no family situation is the same. Our attorneys can provide you with options and explain why or why not a trust is right for you.
What if I die without a will?
Dying without a will (referred to as dying intestate) means you’ll have no say over who receives your assets. State laws will dictate the division of your assets depending on your family situation. This provides for an inflexible pattern of distribution which may not distribute your assets according to your wishes. Your assets may go to your children, parents or close relatives. If you have minor children, a judge will decide who cares for them, and the situation may not be ideal.
How much does it cost?
The cost varies for each family depending on the services and/or documents you want us to create. We do not charge by the hour; we offer a flat rate, and the cost is not based on the value of the assets owned. A power of attorney for health care, its $A, a financial power of attorney is $B, a will is $C, and a trust is $D, regardless of whether your net worth is $100,000 or $1,000,000.
I have documents prepared by another attorney and want to make changes; can Carrier Law help with that?
If you have any documents already drafted, be sure to bring them to your meeting, so that one of our attorneys at Carrier Law can review them. If there are changes that are needed, one of our attorneys will discuss these proposed changes with you and the plan to accomplish your goals.
Do I need to make a new will or update my estate plan if I just moved to Michigan from another state, or will be moving out of Michigan soon?
When moving, you should have your Power of Attorney documents reviewed by an attorney licensed in the state that you plan to live in. If you are a client of Carrier law and plan on moving out of state, you should have a trust review before you move and before you sell real estate or other assets.
POA – what is it and why do I need one?
POA is an acronym for “Power of Attorney.” There are two types of POA documents – medical and financial. Each document designates a person or persons whom you have selected to make choices for you if you become mentally incapacitated. These documents are crucial for anyone 18 or older. Without them, probate court must get involved to designate who will make decisions if you become incapacitated. Medical and financial POAs can name different agents but should absolutely be people whom you trust.
What is a patient advocate?
A patient advocate is the agent named in a health care power of attorney document. When a patient is unable to make their own medical decisions (i.e. unconscious, under anesthesia, dementia), the patient advocate then makes those decisions for the patient.
What happens if I don’t have a Health Care or Financial POAs in place?
If you are NOT able to make your own financial or health care decisions, and don’t have a health care power of attorney or financial power of attorney document in place, you will be faced with a probate court matter to appoint a Conservator or Guardian. A probate judge will then decide who gets to make those decisions, and that person would do so without written guidance from you.
Does my spouse automatically have the right to make medical decisions for me in the event of my incompetency?
Unfortunately, no. Most people think that since you are married, that automatically gives power to a spouse in a medically sensitive situation. However, this is not true. Your spouse (merely because you are married to this person) technically has no legal right to make decisions for you in the event you become incompetent. The way to guarantee that your spouse (or anyone) has the right to make decisions for you, (medical or financial), is by having a properly drafted power of attorney document listing them as your agent (Patient Advocate under a health care power of attorney document and Attorney-In-Fact under a financial power of attorney document).
What is the difference between a Guardianship and Conservatorship?
Guardianships are designed to assist with personal and health-related needs, conservatorships are designed to assist with financial needs. In both a conservatorship and guardianship, a probate court will appoint a substitute decision-maker for an individual who does not have the capacity to manage his or her own affairs.
When is it necessary to have a guardian and/or conservator appointed?
It is necessary to get a guardian and/or conservator appointed when an individual over the age of 18 is no longer able to make health care and/or financial decisions for themselves (incapacity) AND the person does not have a valid health care power of attorney or financial power of attorney document already in place. The person’s incapacity could be due to either medical or mental incapacitation.
Do I need to update my Estate Plan following a divorce?
Almost ALL the time the answer is: Yes! Why? Because when you set up your estate plan as a married couple, your spouse was most likely included on everything that is now yours. That includes distribution of assets to the spouse (soon to be ex) when you die. Most people do not want their ex-spouse to receive their assets upon their passing away or make medical or financial decisions for them while they are alive but not competent. Simply put, updating your Estate Plan is crucial to keep your ex-spouse from making your health care or financial decisions or receiving your assets when you die.
When my kids turn 18, what legal documents should I consider and why?
When a child turns 18, they are considered a legal adult. As a parent, you no longer have “legal guardianship” over them. For a parent to access a child’s medical or financial records, there must be legal documents in place including power of attorney documents for both medical and financial decisions. For a parent to access school records, their college student must also sign a FERPA (Family Educational Rights and Privacy Act) waiver so they can grant you, as the parent, permission to access their records (including academic information, financial aid information, student account information).
Can I give money to my children using the gift tax laws?
Yes, the annual gift tax exclusion is $15,000 per person per year, for the 2019 tax year. This is the amount of money that you can give as a gift to one person, without having to pay or calculate any gift tax. If you’re married, you and your spouse can each gift up to $15,000 to one recipient. HOWEVER, if you eventually need any type of skilled care and you gifted anyone ANY amount of money you might be disqualified from any Medicaid resources because Medicaid rules include a 5-year look back period. Selling something for less than fair market value or gifting an asset can often cause a divestment issue, and you will be penalized. The more money divested will result in a longer divestment period. Talk to a Carrier Law attorney before you make a gift or sell something for less than fair market value.
What is the difference between Medicare and Medicaid?
Medicare is the government’s health care insurance. When an individual reaches the age of 65, they are eligible for Medicare. Medicare has Parts A, B, C and D. Part A provides inpatient hospital coverage; Part B provides outpatient medical coverage; Part C is an Advantage Plan that allows you to elect additional services that cost extra; and Part D provides prescription drug coverage. Medicaid is a federal program administered by the states which provides for a base line of care in a skilled care environment. There are 3 primary programs: Medicaid – which covers skilled care nursing homes; Medicaid Waiver – which covers assisted living, and Medicaid PACE (Program of All-Inclusive Care for the Elderly) which provides a wide range of medical, social, recreational, and wellness services.
Will a trust stop the nursing home from taking my home?
Michigan is one of the few states (so far) that does NOT automatically place a lien on the home when you apply for Medicaid. As you have your assets passing through a trust and NOT through probate court when you die, the State of Michigan will not recover money from your assets when you die. With a special type of trust (we call it a Root Cellar Trust), your house is protected, and not considered a countable asset if you need skilled care. You can even sell your house if it has been in the Root Cellar trust for at least 5 years before you need skilled care. A revocable living trust can be used to protect the house from going through probate court however, as a general rule, you can’t sell the house while the patient is in the nursing home without turning the money from the sale over to the state.
Planning for your estate is a smart idea; if you do not make a plan for what will happen to your estate – another word for your assets and property – then the future of your estate will be uncertain. While Michigan law will still allow your estate to go to your closest relatives, who gets what will be out of your control.
In addition to making it clear how your assets will be distributed upon your death, estate planning also allows you to ensure that your loved ones are provided for, including a spouse, minor children, grandchildren, or disabled family members. An estate plan can also minimize the stress experienced by family members when you die, and avoid the tedious probate process. An estate plan that is well-devised can also minimize tax liabilities, too.
Do not put your future at risk; if you do not have an estate plan already, the time to create one is now. We can help – contact us today!