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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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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Medicaid is a government program that helps various Americans with the cost of their medical needs if they qualify to receive assistance under the program. Elderly Americans who qualify may use Medicaid funds to pay for long term nursing home care and avoid having to pay for the cost of that out of their estates. Medicaid has limitations on the value of assets a person receiving Medicaid can own and still receive Medicaid, and therefore, some planning is necessary if a person is planning on using Medicaid to pay for long term care.

When receiving Medicaid as a senior, one of the requirements is that the recipient does not receive income or own assets over a certain amount. If a person has assets over the Medicaid asset limit, the person can spend down those assets in order to meet the eligibility requirement. For some people, the spending down may involve paying for nursing home costs or other medical care, others may try to meet the eligibility requirement by gifting away the assets to friends or family members.

Unfortunately, if these transfers or gifts are made within five years of filing for Medicaid, the person applying for assistance may face penalties or have the application denied. The applicant may also be deemed ineligible for Medicaid for a certain period of time. This five-year period is known as the look back period. There are certain steps that an applicant can take to ensure that gifts given during this period do not result in a penalty.

Homes that are owned and occupied by the Medicaid applicant or his spouse are not usually subject to the limitations on asset transfers. Transfers of assets to spouses also do not count because a spouse’s income is also considered in determining eligibility. Additionally, parents can transfer their home and other assets to children with disabilities or to trusts established for the benefit of those children. Transfers can also be made to an adult child who lives with the Medicaid applicant and provides care and assistance to the applicant.

There are additional ways to transfer assets without incurring penalties, and people with significant estates should speak to an experienced attorney to figure out the best approach. Applicants should be careful because many of the methods applicants used in the past to transfer assets and avoid Medicaid penalties are no longer valid.

Note that a penalty under Medicaid for gifts or transfers of assets during the look back period is different from tax penalties from the IRS. Even if the gifts given in a tax year fit within the gift allowance, the gift giver may still face a Medicaid penalty for simply making the gift.

Contact Us for Legal Assistance

If you are in the process of planning for your long term care and how the assets comprising your estate will be distributed to your heirs, you should speak with an experienced estate planning attorney to ensure that you and your heirs are not negatively affected by the plan you put in place to transfer assets. For a consultation to discuss your estate plan, contact Resnick Law, P.C., to talk to knowledgeable estate planning attorneys in Bloomfield Hills and Detroit, Michigan.

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People are often advised to write wills as part of their estate planning. Wills are important because they allow a person writing the will the opportunity to decide who gets property from his or her estate. Using a will in conjunction with other estate planning tools can help avoid probate and ensure that family and friends are well taken care of after your death. When a person fails to plan by using a will or another estate planning tool, the distribution of assets defaults to state law.

When a person dies without a will, he or she dies intestate and any property that would have passed by will is divided per the state’s intestate succession laws. Any property that is not in the deceased’s name at the time of death is not subject to intestate succession. Therefore, if the deceased was able to create a trust and transfer property to the trust before his or her death, the trust property would not be subject to intestate transfer. Property such as insurance proceeds and retirement accounts are transferred to designated beneficiaries.

Under Michigan law, when a person dies intestate, his or her property is first required to be distributed to a spouse if the deceased did not have any children. If the deceased did not have any children but was married, the entire estate is inherited by the spouse. If the deceased is survived by both the spouse and children, the estate is divided between the spouse and the children. However, in this case, the spouse first gets a set dollar amount from the estate; the amount is calculated based on the increases in cost of living.

Children who are born to the deceased and a person who is not his or her spouse are also able to inherit from the deceased. The marriage status of the parents does not affect the children’s ability to inherit.

If the deceased has a spouse and no descendants, the spouse gets a large share of the estate and the rest of the estate is transferred to the decedent’s parents. If the deceased did not have a spouse or children, his or her property is distributed to the parents and siblings. Half siblings are also eligible to inherit from their half siblings.

If these close relatives are not alive, the property is passed on to the next available group of relatives, for example, grandchildren and cousins. While the state may eventually get the deceased’s property, it is only if there is no relative, even a remote one, who can inherit it. A qualifying relative can inherit from the deceased even if the relative does not live in Michigan or even in the United States, and whether or not the relative is a United States citizen.

Let Us Help You Plan

A will is an important part of an estate plan and can be used with other documents to ensure that a person’s wishes for the distribution of his or her estate are carried out. 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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A person wishing to gift certain items or real estate to his or her closest family members and friends does not have to wait until death to make these gifts through a will or trust. It is possible to make these gifts as inter vivos gifts. However, this does not eliminate the possibility of legal challenges to the gifts later on after the death of the person giving the gift.

Inter vivos gifts are simply gifts that are made during the lifetime of a person, as opposed to a testamentary gift that is made by will or trust when a person dies. The choice to make an inter vivos gift is up to the particular person making the gift, preferably after consultation with an experienced estate attorney as to the possible consequences of making the gift in this manner.

Generally, gifts are valid if the person making the gift intends to transfer title for free; there is an actual or constructive delivery of the gift, unless it is already in the receiver’s possession; and the person receiving the gift accepts it. Once an inter vivos gift is made, it is unconditional and irrevocable, and the person making the gift loses the ability to take it back. The gift has to be fully made during the lifetime of the person making the gift in order for it to be a valid inter vivos gift.

This means that once the gift is made, the person making the gift no longer has access to that property, and even if he has a major disagreement with the beneficiary of the gift, he can no longer take back the gift in retaliation. Inter vivos gifts should not be made of property that a person may need or rely on for future needs.

Even gifts that are made inter vivos can be challenged after a person’s death. In some cases, a potential heir may try to sue to invalidate an inter vivos gift while the person who gave the gift is still alive. The challenges are often similar to those made to the validity of a will, and usually involve allegations that the person making the gift lacked the capacity to make the gift, or the person was under undue influence when he or she made the gift.

If a person chooses to make an inter vivos gift, it is important that he or she documents the intent in making the gift if it is meant to serve as the receiver’s inheritance. For instance, if a parent who has two children makes substantial inter vivos gift to one child, intending that to serve as his or her inheritance, the parent should document this intention that the gift serve as that child’s inheritance to avoid challenges when that child later receives no testamentary gifts.

Contact an Experienced Estate Planning Attorney

If you are considering making an inter vivos gift, you should consult an experienced estate planning attorneys in Bloomfield Hills and Detroit, Michigan, for more information on how this may affect your overall estate plan. To get started and to discuss your overall estate planning needs, contact Resnick Law, P.C. for a consultation.

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When a person creates a trust to distribute his or her assets upon his death, that person may sometimes name someone and grant him or her power of appointment. Power of appointment in the context of an estate trust refers to a power granted to a person to distribute the trust assets as he or she pleases. Granting a person power of appointment can be a good way to ensure that a trust beneficiary has flexibility to transfer trust assets to his or her heirs upon death. In some situations, however, it can defeat the intent of the original grantor.

Generally, when trusts are created, the grantor leaves specific people as beneficiaries under the trust. However, a grantor may want a particular person to have the power to make appropriate changes to the trust to name new beneficiaries. A beneficiary, a trustee of the trust, or another person not otherwise connected to the trust may be granted the power of appointment. A person who holds power of appointment can make significant changes to a trust after the grantor’s death, and depending on the nature of the power of appointment, may be able to grant him or herself the trust assets.  

Powers of appointment can be used to exclude people that the grantor would have wanted to receive part of the assets. For example, if one child holds power of appointment, he or she can exercise it to exclude siblings from receiving the trust assets. Similarly, the grantor’s spouse can exercise powers of appointment to exclude the grantor’s children from a previous marriage in favor of her own children. In this way, powers of appointment can be used to defeat a grantor’s true intent if the grantor would have preferred to leave assets to the excluded group.

A grantor may limit the power of appointment to help protect trust assets from creditors. Under a limited power of appointment, the person who is granted the power is allowed to transfer the assets to a wide range of people, but is restricted from making transfers to creditors.

A person who holds a power of appointment can exercise it during his or her lifetime or at death by including appropriate terms in a will. If there are specific instructions in the trust document on how the power should be exercised, then these instructions must be followed in order to make the exercise valid. It is also important that the person actually exercises the power of appointment because an intent to do so is not sufficient. If the power of appointment is not exercised, the assets are distributed as per the terms of the trust or state law, whichever is applicable.

Contact an Experienced Estate Attorney

It is important to ensure that you understand the implications of making certain elections in your estate planning documents. You should speak to an estate planning attorney before granting anyone power of appointment in order to ensure you understand how that will affect your beneficiaries. If you are looking for legal assistance in setting up a trust or otherwise planning your estate, you should contact Resnick Law, P.C., to speak to the experienced estate planning attorneys in Bloomfield Hills and Detroit, Michigan.

Once a person has decided to establish a trust as part of his or her estate plan, another important decision needs to be made in order to complete the trust formation process – choosing a trustee. Choosing a trustee is important because the person or organization the trust settlor selects to serve as trustee bears the responsibility of working for the best interests of the trust beneficiaries and protecting the trust interests.  

If the trustee is an individual, one of the most important things to consider is whether you, as settlor, can trust the trustee to properly manage the trust. This is not a legal requirement, but it is an important consideration. In choosing family and friends to serve as trustees, the settlor usually attempts to pick a person he or she believes will truly act in the best interest of the trust beneficiaries.

In addition, it is important to consider if the person you select as a trustee has a poor financial history. The trustee will be required to make decisions that will affect the value of the trust assets. The law requires the trustee to act like a prudent investor would, unless there are restrictions on the kinds of investments the trustee can make. Selecting a trustee with poor financial judgment could mean the beneficiaries will receive less than the settlor intended.

If you name one family member to serve as trustee, you should consider whether that decision will cause a strain in the relationships between the trustee and the other family members. This may be the case if one sibling is chosen to serve as the trustee from a group of siblings.

Not everyone who is selected to serve as a trustee accepts the role. It is advisable to name several options for trustees, or use language when setting up the trust that allows you to changes trustees when necessary. Changing trustees after the trust is formed may not be possible in some cases.

Another option for the choice of trustee is the use of a company that offers trust administration services. Using a trust company can be advantageous because the company has experience in trust administration and is likely to make investment decisions without becoming emotional. Unfortunately, trust administration companies can also charge fees to administer the trust, and this can cause some people to opt not to use them. The fee is something that needs to be considered in light of all the other pros and cons of using an institutional trustee instead of an individual.

In some cases, it is possible to name a team or group of people to serve as trustee. This team of people would generally only make trust decisions based on their agreement on the issues unless otherwise stated in the trust documents.

Contact an Experienced Attorney

If you are thinking about setting up a trust as part of your estate, you need to talk to an experienced estate planning attorney who can assist you in deciding what kind of trustee you should appoint. Contact Resnick Law, P.C., to consult our experienced estate planning attorneys in Bloomfield Hills and Detroit, Michigan. Our estate planning attorneys are also experienced in trust administration and can explain how we can serve as an institutional trustee for your trust.

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There are many different tax issues that a person wishing to pass on his or her estate must consider. One of these considerations is the tax burden of the estate on future beneficiaries. One way that a person can reduce the tax burden is by passing assets or using income from a trust for charitable purposes. In Michigan, this can be done by using charitable remainder trusts and charitable lead trusts.

These trusts are different in the way they operate, although both kinds of trust benefit charitable organizations as well as other beneficiaries. A charitable remainder trust is a trust in which a person designates a person or several people as trust beneficiaries to receive the income of the trust for a specified period of time. When this period is over, or after the beneficiary passes away, the remainder of trust assets are passed on to a charity named in the trust.

In the case of a charitable lead trust, a charity is designated to receive the income from a trust for a period of time, after which the remainder of the trust assets are distributed to named beneficiaries. The person creating the trust can set it up in such a way that a charitable trust receives the income from a trust while he or she is alive, and then the remainder goes to beneficiaries after his or her death.

Choosing a charitable remainder trust over a charitable lead trust depends on the goal of the estate owner. Both forms of charitable trusts allow the estate of the trust creator to receive a tax deduction for the amount given to charity. In addition, the chosen charity receives the benefit of a generous gift to help its charitable causes. There are some requirements to register a charitable trust in some situations.

Charitable remainder trusts and charitable lead trusts are generally established as irrevocable trusts. This means that once the trust is established, the terms of the trust cannot be changed. It is important to conduct extensive research before settling on a charity to benefit from the trust. The trust can have alternate or contingent charitable beneficiaries in the event that a charity is not in existence at the time the charitable gift is supposed to be received.

There are other ways in which a person can diminish the impact that taxes may have on a person’s estate. Instead of setting up charitable trusts, a person can simply make charitable donations during his or her lifetime or by leaving property to a charity in a will. There may be more delays in terms of getting assets to a charity if the property is left to a charity in a will because the will has to go through probate. It is not possible to generalize which plan would work best for an estate without looking at the particular needs of that estate.

Contact an Experienced Estate Attorney

For more information on the use of trusts, 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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A person who writes a will as part of a larger estate plan may need to change the will from time to time depending on changes in the person’s life. In some cases, the person may need to completely redo the will and cancel a prior will in its entirety. There are several ways to

A testator’s act of physical destruction of a will generally serves to revoke the will. Burning, tearing, canceling, obliterating, or destroying a will or a part of the will is taken as an indication that the testator intended to revoke the will. Even if these actions do not actually affect the words on the will, if they destroy part of the will, then the revocation will be recognized. Only original wills are recognized, and therefore, even if a photocopy of a destroyed will exists, it would not be accepted as a substitute will showing the testator’s intent.

For a revocation to be valid, the act destroying the will does not have to be carried out by the testator, but can be done by another person as long as it is at the direction of the testator. This may be a concern if the testator is physically incapacitated.

The testator can also revoke a will by executing a different will that is intended to supersede the original. However, if revoking a will by executing a new will, the testator has to be careful to ensure that the will replaces the prior will in its entirety. If a subsequent will only revokes some parts of a previous will, both wills may be accepted and their terms followed to the extent they do not contradict each other.

In some situations, it is best to write a new will that incorporates terms from a prior will that the testator wishes to keep, and then physically destroy the prior will. This would ensure that only one will is relied upon when the testator dies, and reduces the possibility of will challenges leading to one will being invalidated.

There are other bequests in a will that are revoked automatically as a matter of law. Bequests to a spouse when the couple is married can be revoked by a subsequent divorce. This also applies to a prior grant of power of attorney to a spouse before the divorce. If a person wants to leave some property to a former spouse, he or she can still do so, but he or she will need to update the will after the divorce is finalized in order to ensure that the bequest is honored. The terms of a will that are revoked after a divorce is finalized can also be revived if the testator remarries his or her former spouse.

Contact Us for Legal Assistance

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 experienced estate planning attorneys in Bloomfield Hills and Detroit, Michigan.

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