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Avoid Bragging

With the exception of your friends and family, you should avoid sharing details about the amount that you received to the world. By planning ahead, you can make sure to keep a low profile and avoid becoming visible to creditors and others who might try to assert an interest in your money.

Avoid Going Alone

Managing a large amount of money is a big responsibility, which is why it is recommended that you enlist the assistance of professionals like a financial planner, an accountant, and an estate planning attorney.

Update Your Estate Planning Document

Receiving a large amount of money might seem like a wonderful stroke of luck, but the reality is that more money often brings with it a host of complications. Many people find themselves facing sobering tax ramifications. These people need the assistance of an experienced estate planning attorney who can help determine various strategies to protect their money now and after their passing. An estate planning attorney will also make certain that you properly update your existing estate planning documents, including your will, to reflect your newfound wealth.

Do Not be Careless

A large inheritance or lottery winning may be a great deal of money, but you still need to be responsible in handling it. Consider placing some of it in a high-interest earning savings account or a retirement account like a 401(k). Some people also decide to cautiously invest the money in the stock market. You may want to use some of it to pay off any debts that you have.

Speak with an Experienced Estate Planning Lawyer

The estate planning process can be complicated, but it is important that it be done properly to avoid making any costly mistakes. If you have questions about the process or how a recent inheritance will impact your estate plan, do not hesitate to contact Resnick Law today to schedule an initial free consultation.

(image courtesy of Sharon McCutcheon)

Estate planning is a particularly complicated area of law. Any mistakes that are made in a will or other document can end up creating significant errors in the administration of an estate. When these issues crop up, you will likely not be alive or aware that your estate planning documents contain errors and your wishes will not be carried out in full. For this reason, it is a wise idea to obtain the assistance of an experienced estate planning attorney who can make sure that your plans are properly created and executed.

Error 1: Incorrectly Naming Beneficiaries

Failure to name a beneficiary in estate planning documents or not reviewing estate plans and having an estate proceed to the wrong person can lead to substantial problems. If you fail to appoint a beneficiary, either your assets will pass to your estate or probate law will determine who receives them. With some types of estate planning accounts, failure to name a beneficiary can result in substantial tax complications.

Error 2: Failure to Plan for the Death of a Beneficiary

In addition to failing to name a beneficiary or naming the wrong one, some people fail to name an alternate beneficiary to receive an inheritance in case the first one dies before the administration of the estate. In most types of estate planning, it is a wise idea to both name a principal and an alternate in case an unexpected event occurs before the estate planning document is executed.

Error 3: Failure to Anticipate Complications With a Gift

Even if you have noble intentions for how a gift should be assigned, failure to anticipate the numerous complications that can arise can turn a simple but meaningful gesture into a fraught and complicated one. To make sure that your gifts are reasonable and likely to succeed, discuss your plans with an experienced estate planning lawyer.

Error 4: Not Taking Guardianship into Consideration

Never leave assets directly to a minor without first taking issues of guardianship into consideration. Nearly all minors are incapable of managing a large inheritance without adult guidance. Fortunately, there are estate planning tools that allow an inheritance to be held by someone else until the minor turns 18. There are also estate planning documents that allow a minor to receive an inheritance only on the condition that certain requirements are met.

Error 5: Failing to do Any Type of Estate Planning

Many people fail to perform any type of estate planning because they are uncomfortable with thinking about their death and do not want to consider what will happen when they are not around any longer. As a result, when these individuals die or become incapacitated, there are no estate planning documents to determine how things should be handled.

Speak with an Experienced Estate Planning Attorney

If you have questions about the estate planning process, you should not hesitate to speak with an experienced attorney. At Resnick Law, we have helped many people create and implement estate plans to achieve a variety of goals. Contact our law office today to schedule an initial free consultation.

There are a number of questions that arise when estate planning. Many people are uncertain about what effect various estate planning documents and accounts will have after their death, including their life insurance policies. The following will address the most common questions that we receive about life insurance and its effect on estate planning. Because many of these issues are particularly complex, it is often best to sit down with a seasoned estate planning attorney to discuss your unique situation.

What are the Different Types of Life Insurance?

As you begin to learn about life insurance, you discover that there are several types including second to die, term, and whole life. Each of these types of life insurance have advantages and disadvantages.

• Second to die life insurance is a type of life insurance that covers two lives and distributes the proceeds at the death of the second individual. While these policies often cost less because insurance companies are not required to pay out the proceeds to early, many times annual exclusion gifts are prohibited from being split among the couple.
• Term life insurance provides coverage at a fixed rate for a specified period of time, but after this period is over, coverage at the previous rate is no longer promised.
• Although whole life insurance remains effective for the duration of the insured individual’s life, premiums must be paid every year into the policy to make sure that it remains effective.

The exact life insurance benefit that will work best for you depends on a number of unique factors.

How do Life Insurance Policies Affect Estate Taxes?

Often, life insurance proceeds pass tax-free to the surviving spouses either directly if the spouse is named in the life insurance policy, through a tax-efficient trust, or through a Life Insurance Trust. If the beneficiary of a life insurance policy is not a spouse or if multiple beneficiaries are involved, the proceeds from a life insurance policy are taxable in accordance with the estate tax exemption amount.

What Role can Insurance Play in Business Succession Plans?

If you plan on transferring interest in your business before or after death, there is a possibility that not all of your children will be interested in gaining ownership of the business. In some situations, none of a family’s children want anything to do with the business. For this reason, the distribution of a business can present challenges when you want to equally divide your assets among your children. In these situations, a life insurance policy can be used to make sure that each child receives an equal amount.

Speak with an Experienced Estate Planning Attorney

If you are interested in estate planning, you should not hesitate to contact a knowledgeable attorney. At Resnick Law, we understand the numerous complex issues involved with estate planning and know what it takes to make sure that your wishes are fully achieved. Contact our law office today to schedule an initial free consultation.

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As time passes, many people find themselves taking care of their parents. This might include shuttling parents to medical appointments or helping them move into a smaller, more manageable living situation. Many people find themselves assuming responsibility for a wider range of tasks when it comes to caring for their parents. In these situations, many people assume legal guardianship of a parent, provided the parent reflected this decision in his or her estate plan and power of attorney documents. Unfortunately, there are some situations in which, even if you were granted the power of attorney, you still might need to petition for guardianship of a parent. This article will review some of the most common situations in which you might need to file a petition of guardianship over your parent.

Additional Medical Care is Required

There are some situations in which a person might need to petition guardianship to protect a parent’s health because the decisions in question are not authorized by the healthcare proxy. This might include situations in which a parent is unable to understand the differences between health care choices.

A Parent’s Decision-Making Capability is Reduced

A person might need to petition for limited guardianship of a parent if that parent is able to manage some areas of his or her life, but not others. For example, a court might grant guardianship over a parent when it comes to financial decisions, but not for health care decisions.

A Parent Must Go to a Nursing Home

If a parent has gotten to the point that he or she is no longer able to take care of him or herself without supervision, a child may need to consider admitting that parent to a nursing home. Sometimes, however, a parent may resist going to a nursing home. In these situations, you might need to petition for guardianship.

A Parent Refuses to Sign a Power of Attorney Document

Even after being diagnosed with the early signs of serious conditions like Alzheimer’s or Parkinson’s disease, some parents still refuse to sign estate planning documents granting a child power of attorney. Often in this situation, the child decides to let the parent continue making financial and health care decisions on his or her own until the parent is no longer aware of what he or she is doing. At this point, a skilled estate planning lawyer can help you file for guardianship over your parent.

Speak with an Experienced Michigan Guardianship Lawyer

Because petitioning for guardianship can be particularly costly and can also take a significant amount of time, it is often best to avoid guardianship decisions by making sure that a parent creates an estate plan that fully reflects his or her decisions. Speak with a knowledgeable estate planning lawyer today who can help you make these decisions. At Resnick Law, we have helped many parents create estate plans, and we are skilled at handling these situations even when unique obstacles arise. Contact our law office today to schedule an initial free case evaluation.

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More and more people who are interested in estate planning are learning about

The Role of DAPTS

Similar to irrevocable trusts, DAPTS offer increased flexibility regarding estate planning for clients. Michigan is just one of 17 states that have laws that allow the creation of DAPTs. For individuals who do not live in these states, a trust can still be created in one of the 17 states using a trustee. Once assets are placed into a DAPT, the trust creator permanently gives up those assets. Because a trust creator can name him or herself as a beneficiary, though, there is a possibility that he or she might retain some management rights regarding the trusts assets.

The Advantage of DAPTs

The primary advantage of DAPTs is that they offer asset protection. As a result, a person is able to place assets into a trust to be dispersed so that they can be used post-retirement. DAPTs also offer tax advantages. New tax laws have temporarily doubled estate tax exemptions from $5 to $11 million. While a person might not have this amount currently, an estate that grows to this amount by 2026 will place an individual above the exemptions limits.

How to Structure a DAPT

There are several methods used to structure a DAPT, which include:

• A client signs a solvency affidavit, which confirms that he or she will have the assets necessary after the transfer to pay for all future expenses. Some clients decide to support this statement with a current balance sheet and financial forecast, which help to provide a more fleshed-out picture about the clients finances.
• The client is not listed as a current beneficiary of the trust. Instead, someone is appointed in a non-fiduciary capacity to name descendants. If the client ends up needing any of the assets placed in the DAPT in the future, the client can be added as a descendant. The client will be unable to receive funds unless he or she is added.
• Someone else received the power to direct the trustee to make distributions to the client.

Speak with an Experienced Michigan Estate Planning Lawyer

No matter if you use them for asset protection or estate tax planning, DAPTs can be a particularly powerful tool because they present a way to secure assets while still leaving those assets accessible. If you are interested in creating a DAPT, you should not hesitate to contact an experienced estate planning lawyer. Contact Resnick Law today to schedule a free initial consultation, during which time we will discuss how to best resolve your case.

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When the time comes to create a legally binding estate plan, you will be required to name a personal representative to oversee your estate. The person named is usually referred to as an executor, and he or she must handle the daunting task of managing your estate while ensuring that your heirs receive their inheritances in a timely manner. Typically, the process of probate in the state of Michigan is straightforward and easy to navigate if you leave your beneficiaries a detailed will. Unfortunately, if your will or executor is challenged, things can quickly become complicated. Knowing these four reasons

Poor Communication

The role of an executor is time consuming, stressful, and requires impeccable communication skills. Throughout the process of managing the estate, your executor will work with your creditors, deal with the Internal Revenue Service, and work with the probate court. He or she will also need to communicate regularly with your beneficiaries to let them know what is happening with the estate. If your beneficiaries do not feel as if they are receiving updates on a consistent basis, they may grow dissatisfied with your executor and demand that he or she be replaced.

Disputes Over the Will

It is not uncommon for beneficiaries who are not satisfied with the way assets are distributed to challenge an entire will. Depending on the circumstances, the challenge over the will may include asking the probate court to take over administration of the estate or request that another person be appointment in the role. The request may have nothing to do with a problem with the executor themselves, the person disputing the estate plan may believe that the entire legal document is invalid, including the appointment of an executor. This process could extend the probate process by several months or years, potentially costing the estate money in the form of administration fees and other expenses.

Financial Issues

Executors often handle large amounts of money along with valuable assets, making trust one of the primary factors involved in deciding who should manage your estate. Though most executors are honest, it is possible that the executor may intentionally steal funds from your estate, leading to a call for his or her removal. In other situations, the beneficiaries of the estate may not agree with the estate management fees your executor is receiving, leading to a disagreement that could end up being resolved in court.

Contact an Experienced Attorney

Deciding who should manage your estate is not easy, and it is a decision that should be made with the assistance of a qualified trust and probate attorney. The legal team at Resnick Law understands how crucial making the right choice is, and we work with you to ensure the person you choose has the legal help necessary when the time comes to manage your estate. Our team guides your chosen executor through the process of probate administration. Contact our office today to schedule an initial consultation so that we can begin providing you the legal representation you require.

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One major consideration when setting up a trust is whom to appoint as the trustee of the trust, responsible for managing the trust assets. Some people choose to appoint family members or friends as trustees, while others prefer to use professional trustees. There is no right or wrong choice when it comes to making the decision, but there are some issues to be considered before making the decision.

When choosing a family member or friend, it is important to choose a trusted person who is also good at managing money. As a trustee, the person is expected to manage trust assets as a reasonable person would. However, a friend or family member who serves as a trustee may not always keep clear records of how trust funds are kept or may not follow other steps to ensure that the accounting of the trust is up to date.

A family member or friend may also lack the time to properly manage the trust as is required. A lot goes into the proper management of a trust, and although an inexperienced trustee may have the best intentions to commit time to managing the trust, the trustee can get overwhelmed with his other responsibilities and eventually the trust management may suffer. A trustee who needs assistance understanding this new role can seek professional advice.

The advantage of picking a professional trustee is mainly in the professional level of investment knowledge. If the trust assets are worth a substantial amount of money, or the trust is set up for the benefit of a beneficiary who needs assets long into the future, a professional trustee is probably a better choice. The professional trustee can provide continuity and stability for a longer period of time in addition to institutional investment knowledge.

The professional trustee is also solely focused on trust management. Even while handling multiple accounts, the professional trustee generally has a staff that can assist with the management of individual trust accounts.

A professional trustee charges fees that could be taken from the trust, while a family member may agree to serve as a trustee without charging a similar fee. This may be an important consideration if the trust does not have a lot of assets or the assets in the trust are not of a high monetary value.

In some instances, a trust creator can appoint both a professional trustee and a family member or friend as co-trustees. This can be a way for the trust to benefit from the advantages of using either trustee alone and ensure that the trustees keep each other accountable.

Contact an Experienced Estate Planning Attorney

If you are considering setting up a trust and you are unsure about how to select the right trustee, you need to schedule an appointment with an experienced estate planning attorney. For more information on the use of trusts, selecting a trustee to manage the trust, and to learn more about how you can put together an estate plan that addresses your individual needs and wishes, contact Resnick Law, P.C., to consult the experienced estate planning attorneys in Bloomfield Hills and Detroit, Michigan.

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As part of their estate plan, some people choose to arrange their funerals before they die in order to make things easier for their family members or in order to ensure that they get all the things they want at their funerals. When making funeral arrangements in advance, people are generally required to prepay for the cost of the funeral. Making prepaid funeral arrangements can come with some risks, and it is important to ensure that the proper precautions are taken.

In Michigan, funeral providers who offer prepaid funeral contracts are required to be registered with the state and be certified to sell those prepaid contracts. When entering into a contract for prepaid funeral services, it is important to understand exactly what is being paid for, and how the company will use the money. It is also important to find out how transferable the contract is, and if there are any penalties if the contract is cancelled.

Prepaid funeral contracts can be quite expensive, and therefore, when making the decision to purchase this contract, a consumer should take time to make the decision. If the consumer feels pressured to make the purchase, he or she should not make the purchase from that company. If a consumer feels harassed or hounded to make a purchase, he or she can also report the harassment to the attorney general’s office.   

An important issue to consider with a prepaid plan is what happens to the money that is prepaid for the funeral contract. The consumer should find out whether the money is placed in a trust account and find out whether any interest accrued is credited to the consumer. If there is considerable interest accruing, this money should factor into the cost of the prepaid contract.

Finally, it is important for consumers who purchase prepaid funeral contracts to let their family members know that there is a contract in place and give them the necessary documents. If the family members do not know about the contract, they may pay for the same services again after the consumer’s death. The consumer should not simply trust that the company handling the prepaid contract will contact his or her next of kin with this information after the consumer’s death.

A consumer who is considering entering into a prepaid funeral contract should consider making the same arrangements with family members or other trusted individuals. This way, he or she may be able to save money. If the consumer goes this route, he or she should consult with an experienced attorney in order to ensure that all wishes are followed by the people he chosen to assist with the funeral arrangements.

Contact an Experienced Attorney

There are many things to consider when putting together an estate plan. While the decisions have to be made by the estate owner, the decisions should not be made without an understanding of the available options. If you are interested in learning more about the estate planning option available to you, contact Resnick Law, P.C., to consult the experienced estate planning attorneys in Bloomfield Hills and Detroit, Michigan.

(image courtesy of Sharon McCutcheon)

Not many people discuss their estate plans, particularly the provisions in a will, with the beneficiaries of the plan. These matters are often considered private matters that should not be made public. While there may be cases in which it is best to keep the provisions of a will under wraps, having a frank discussion with beneficiaries can be good idea.

One advantage of having a conversation with potential beneficiaries is that the testator’s wishes will be made clear and understood by all beneficiaries while the testator is still alive. This can limit later challenges to the testator’s will or trust provisions. It can also give the testator the chance to explain why he or she chose to leave some property to some beneficiaries and not to others. It can also provide the testator with an opportunity to make changes to the will if the beneficiaries indicate that they will likely disclaim any inheritance received for various reasons.

Discussing a future inheritance with a potential beneficiary can also give the testator an idea of whether or not the beneficiary is in a position to take care of or manage the inheritance to come. For instance, if a father wants to leave an expensive painting to his child, he may want to discuss the gift with the child to see if the child could afford to keep the painting and insure it after the father’s death. If the child would not be able to handle this gift, the father may prefer to leave the painting to his favorite museum and leave some other property or a sum of money to the child instead.

Of course, once the provisions of a will or trust are revealed, it can make life very difficult for the testator. If the testator’s children are not equally provided for in the will, they may harass the testator to make him change his will. It could also cause rifts in the relationships between various family members based on which family members receive an inheritance and which family members are effectively disinherited.

A will can be changed at any time before the testator’s death. For this reason, it is important to remember that if someone decides to reveal the provisions of the will, he should probably not make any changes to the will. Changing the will can cause confusion and invite even more challenges if the beneficiaries are not aware of the changes. If the testator makes further changes after telling potential beneficiaries of prior provisions, he should consider informing the potential beneficiaries of the changes.

Testators who are unsure about whether to disclose the nature of their estate plan due to possible claims that they are incompetent or otherwise not in a position to write a valid will should discuss the grounds for will challenges with an experienced attorney.

Contact an Estate Planning Attorney

If you are considering writing a will, making changes to an existing will, or simply want to learn more about wills and the use of trusts for estate planning, contact Resnick Law, P.C., to consult the experienced estate planning attorneys in Bloomfield Hills and Detroit, Michigan.

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An estate plan that is not regularly updated can result in one or more of the beneficiaries under a passing away before the testator. In that situation, any property bequeathed to the beneficiary is at risk of being distributed in a manner that is not in line with the testator’s wishes. Bequeathed gifts that fail due to the beneficiary predeceasing the testator are known as lapsed gifts.

In some cases, the testator may have put a plan in place to handle situations created by lapsed gifts; usually by naming an alternate beneficiary in the will. If there is an alternate beneficiary named in the will, the property is passed on to that person without any change in the process. Michigan law also provides another approach to handling lapsed gifts through its anti-lapse statute.

Michigan’s anti-lapse statute allows a deceased beneficiary’s children to inherit property that was intended to be left to a beneficiary and instead became a lapsed gift. In order to inherit under the anti-lapse statute, the children must be grandchildren of the testator or otherwise descendants of the testator. In other situations, if there is no alternative beneficiary, the property is passed on to the residual beneficiary named in the will – the beneficiary who receives the remainder of the estate.

If there is an alternate beneficiary or group of beneficiaries named in the will to inherit in case of a lapsed gift, the language used by the testator to outline how lapsed gifts are to be passed on can make a huge difference. For example, if the testator makes a gift to a class of beneficiaries, it can limit any distribution to that class alone, and prohibit the property from being shared among the children of the class members if they are deceased when the testator dies. This is another reason why it is advisable to use an experienced attorney when drafting a will.

For example, a woman writes a will and includes a provision that all her property should go to her husband, and if he dies before her, the property should be shared among her two sons in equal share. This provision creates a situation in which if one of the sons and the husband die before the woman, and the woman makes no changes to her will, the surviving son would inherit everything. The children of the deceased son would not inherit under the anti-lapse statute. However, if the woman’s will names the sons individually, instead of using the term “my sons,” a court is likely to distribute the property that was originally intended for the husband between one son, and the children of the other deceased son, if any exist.

Contact an Experienced Estate Planning Attorney

Revising your will is very important in order to ensure that your wishes as to the distribution of your estate are followed after you pass away. If you want to make changes to a prior will, write a new will, or discuss other estate planning options, contact Resnick Law, P.C., to consult the experienced estate planning attorneys in Bloomfield Hills and Detroit, Michigan.

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