In 2008 Congress passed a resolution to declare the third week in October for Estate Planning Awareness. The goal is to spread information to the public about the importance and the impact of having an estate plan and the consequences of not having one.
As a resident of the U.S., you have the right to dictate what happens to your estate upon your death. There is no age limit or minimum income requirement. Every single person has property that will have to go somewhere once they pass away, whether it is real estate, personal property, cash, or investments.
If people do not take the initiative to make their own estate plan, the State of Michigan steps in and applies its own estate plan on how your estate gets distributed, and this process is called probate. The state’s plan for your estate is not customized; and the probate process takes several months to complete and incurs many fees. In addition to having to go through the entire probate, your estate and beneficiaries may face negative tax consequences and exposure to creditors’ claims that could have been easily avoided by putting a proper plan in place.
The good news is that there are numerous mechanisms available and trained professionals that can help you avoid probate, tax exposure, and creditors’ claims. An estate plan may look different for everyone, as not everyone is the same, and not everyone has the same size estate. Professionals know how to tailor these plans to make sure your estate and beneficiaries are in the best possible position if something were to happen.
Some common estate planning documents include wills, living wills, powers of attorney, patient advocate designations, funeral representative designations, and several different kinds of trusts. Contact a professional estate planning attorney who can help you determine which of these tools would benefit your estate.