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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.

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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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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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In estate planning, the term ademption refers to a situation in which a gift given in a will by a testator cannot be transferred to a beneficiary because the gift no longer exists or has already been transferred by the time of the testator’s death. A testator is the person who leaves his or her property to others in the will. How the bequest in the will is handled in cases of ademption depends on the type of property involved and the circumstances under which the gift was transferred.

Ademption can happen through the transfer of the gift to the intended beneficiary by the testator during his or her lifetime. For example, a man could decide to give his old car to his granddaughter while he is still alive. If in his will there is a term leaving the same car to her, the gift is said to be satisfied. This is referred to as ademption by satisfaction. In some situations, the testator may indicate that gifts made in this way are supposed to satisfy a gift made in the will.

On the other hand, a testator could write a will and leave some property to a beneficiary, and then later sell this property or gift it to someone else during the testator’s lifetime. If the testator fails to change his or her will to reflect the property’s sale, then the gift of the property cannot be satisfied and the beneficiary will not receive a substitute gift in place of the missing property. This is known as ademption by extinction.

Ademption works differently when it comes to gifts of money. For example, if the testator leaves a set amount of money to a beneficiary, say 100,000 dollars, and the testator dies with a bank account balance of less than 100,000 dollars, the testator’s estate would still be required to transfer this sum of money to the beneficiary. The estate may have to sell other property or get the money from other accounts to fulfill the gift.

Under Michigan law, if the ademption of a gift is due to a sale by the testator that has not been finalized at the time of the testator’s death, the money due to the testator on that sale shall be transferred to the beneficiary. So, the beneficiary in a way steps into the shoes of the testator in this regard. This also applies to situations in which the property to be left to the beneficiary is destroyed and there is an insurance payout. The insurance money goes to the beneficiary. However, if it is clear that the testator changed his or her mind about leaving the gift to the beneficiary, then the beneficiary does not get to keep the proceeds of a sale or an insurance policy.  

Contact Us for Legal Assistance

Everyone who executes a will should take steps to update it often to ensure that the terms of the will can be honored without creating confusion. If you are looking for legal assistance in drafting or updating your will or setting up a trust, you should contact Resnick Law, P.C., to speak to the experienced estate planning attorneys in Bloomfield Hills and Detroit, Michigan.

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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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It is advisable to consult an attorney for help with your estate plan and your digital footprint. However, here are seven tips for how to prepare now for the handling of your digital assets after death.:

1. Create an Inventory: Create inventories of your electronic data, with log-on IDs and passwords will ensure that anything you own online is accounted for and can be managed. Like other sensitive data, you need to keep that information somewhere safe; and keep it current and secure.

2. Use a Password Manager: Programs like LastPass allow you to inventory and share access information with your executor without having to disclose the information in a public document like a will. By having one password that catalogs your digital assets and how to access them, it’s like having a master key and digital net worth statement all in one.

3. Consider an Online Vault: Cloud services like Dropbox or Everplans will allow your executor to have access to all your digital estate planning documents, insurance planning documents, tax returns, etc., in one place. It makes the executor’s job much easier.

4. Get Specific: Write your digital-asset plan into your estate documents. Be very clear about it rather than relying on the generic powers of an executor or a general definition of assets to assume that includes digital assets. The more specific you are about your intent and that you want your executor to have access, the better.

5. Detail and Parcel Out: Consider writing both a broad statement of intent for digital assets as well as specific directions for each account. Create a memorandum addressed to your executor and heirs indicating the intentions regarding specific digital accounts. However, to avoid the problem of forgetting to include an account, you need two statements, because technology is dynamic — and because you may have several accounts unaccounted for in your plans — it’s recommended that you include a general statement of intention to encompass all other accounts — past, present, and future — belonging to the decedent.

6. Specificity and Consideration: Think carefully and be specific about what you want your executor to have access to. Do you want him to have the ability to read all of your email messages? If not, be clear about it.

7. Pick your Executor Carefully: Consider who you are choosing to grant information to as they’ll have access to your online accounts. Remember, also, that they’ll need at least some tech savvy to deal with those accounts because they’re going to have access to some very personal information.

For more information on incorporating digital assets into your estate plans, contact the Estate Planning attorneys at Resnick Law online or by calling (248) 642-5400.