Four Things to Know Before You Plan Your Estate in Michigan

Writing a will is an easy thing to avoid. By some estimates, 60 percent of all people die without a will, yet most of us would benefit from an estate plan. One of the reasons people do not plan their estates is they do not know where to begin. These questions and answers will help you start the process of making your plan.

What happens if you die without a will in Michigan?

If you die without a will, it is called dying “intestate.” Under Michigan intestate laws, your spouse and family usually receive your property. For example, if you are married, you have children from your marriage, and your spouse passes away, you receive the first $183,000 of the estate and half of the balance. Your children of the marriage share the rest. If you are not married and have no children, your family receives the estate. Any surviving parents would receive the property before other relatives. If you have no living family, the State of Michigan receives the property.

One disadvantage to dying without a will is you cannot select someone you trust to act as the personal representative, or executor, for your estate. You also are stuck with the distribution plan provided by law. Finally, your estate may require probate and be subject to taxes.

What should you include in an estate plan?

If you choose to plan your estate, you should, at a minimum, have a durable power of attorney, a healthcare power of attorney, and a will. A durable power of attorney is for managing your property during your life, should you become disabled. A healthcare power of attorney allows you to select a person or persons to make critical healthcare decisions for you, should you become unable to make decisions for yourself. A will distributes your property after your death.

Some people also choose to have a revocable trust, or living trust, to help manage their assets during their lives and after they die. Other estate planning documents may assist you, depending on the amount and types of property that you own and your family situation.

What can a will do for you?

With a will, you can choose who receives your property after your death. You also can select your own personal representative to handle your estate. If you have children under age 18, you can appoint the person who you want to be their legal guardian if you die when they are young.

A will does not, by itself, assist you in avoiding probate or minimizing taxes. It also does not help with managing your finances should you become disabled.

What can a trust do for you?

A trust is an agreement between the person who creates it, known as the settlor, and the person who benefits from it, known as the beneficiary. A revocable living trust sets up guidelines for giving money and property to a beneficiary.

A settlor creates a revocable trust, or living trust, during his lifetime. Usually the settlor is both the trustee and beneficiary during his life. The settlor may revoke or change the trust at anytime during his life. On death or disability, the trust becomes irrevocable, meaning that it cannot be changed.

A revocable trust works a little like a corporation. The settlor is like the Chief Executive Officer and Chief Financial Officer of a corporation that includes all of his or her money and property. During life, the trust is run by the trustee according to the terms of the trust, just as a corporation is run by the CEO and CFO, according to terms of the by-laws and other rules. After death, the trust continues in existence, run by the named successor trustee. A corporation too may continue in existence even after its CEO and CFO leave.

One disadvantage to a trust is it can cost more to create than a will; however this cost may be balanced against any savings from avoiding probate. A trust also has some administrative responsibilities that are absent with a will.

One advantage to a revocable grantor trust is it may be used to avoid probate, if it is funded with all probate property. A revocable trust also ensures that your assets will be managed according to your own plans, even if you become disabled. A trust is useful for maintaining privacy, since it does not go through probate. In addition, it may be used to manage money for minor children, although a trust in a will, called a testamentary trust, can do the same thing. Finally, trusts may be used for tax planning.


To the extent that this written communication may address federal tax issues, federal regulations issued by the U.S. Treasury require that the recipient be informed that this written communication is not intended and cannot be used to (i) avoid any potential tax penalties that may be imposed under the U.S. Internal Revenue Code or (ii) promote, market, or recommend to another party any transaction or matter addressed in this communication. The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for individual advice regarding your own situation.

Shauna L. Turnbull, PLC
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