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3 (of many) Good Reasons for an Estate Plan

By Tony Snyder | January 26, 2012

Over the next few weeks, it is my intention to give you some “food for thought” on the WHY behind having your estate planning put into place now, while you have the opportunity to make those decisions for yourself…not a court making those decisions for you.

Specific Devise:

A specific devise is when we list an actual piece of property (like your Great-Grandfather’s watch, your mother’s wedding ring or the lake cottage) to a specific person. You might want your son to get your Hot Rod automobile you and he worked on together. You may want your cousin to get your collection of thimbles or your best friend to inherit your comic book collection. But unless you have something written down that a court could point to and say, “Yes, definitively, this was their final wish”, how can we enforce that? See, when you die intestate (that is, without a will or trust in place) we are obligated to give your stuff to people based on how Michigan law is written (or whichever state you live in…I’m a Michigan attorney, I only care about Michigan law…sorry Nebraska). The great State of Michigan requires a spouse to get everything upon husband’s death. That’s great but what if he specifically wanted his son to get that Hot Rod? Nothing says Mom has to give it to son. Or worse yet, what if Dad re-married and new wife hates step-son! Then guess what happens!?

Minor At Time Of Death:

Imagine you’re one of the millions of happily-divorced Michiganians and you have a minor child when you pass away. If you’ve no Trust in place, everything you own gets sold off and put into a cash account (usually) where it sits until the child turns 18 years old! Then, upon Junior’s 18th birthday, he inheirits every dollar in that account. Now, I can only speak for myself, but lots of fun times would have been had with the money which came from my parents estate, had I received that kind of money. Is that what your kids would do? No, of course not, they’re “good kids” after all. But forget the fat payday that would come with their 18th birthday, have you given any thought as to who would oversee those funds on behalf of your child until s/he turns 18? Let me throw a likely name out there: Your Ex! Do you understand why that is though? S/he is your child’s biological parent. The court is going to typically defer to the child’s surviving parent to provide care and assistance to Junior. How would you feel knowing your Ex was in control of money for your child, which came from your estate?

Spendthrift:

So your 19 year old daughter is at the mall every weekend? Your 21 year old son, the bar? If you’re concerned about how quickly your child would burn through their inheritance, regardless of their age, you can establish a Spendthrift provision within your Trust to control how quickly your child receives their money, or conversely, in how the money could be spent. Sure, in that latter instance you’re simply freeing money up for your child to spend on clothes, since you’ve put in place a restriction for disbursement for housing, as an example. But at least you know that your money isn’t being spent frivolously.

 

So here are my first three reasons why I hope you will consider the value of estate planning, specifically regarding a Revocable Living Trust. Please feel free to call my office at 517-643-2102 if you have any questions regarding this blog post.

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