Wills and Probate
THE PROBATE HORROR STORIES
The “urban legends” still live on today. We have all heard them. The probate horror stories: “The lawyers got all of the money” “The estate was tied up for years,” and so on.
In reality, things have changed considerably for the better in the Probate Courts of this State over the last 20 years. Among beneficial changes are requirements that the parties interested in an estate must receive notice of proposed attorney fees. In addition, the ultimate attorney fee must be approved by the probate judge as being reasonable and for services necessary to the administration of the estate. Still, there are good reasons to “avoid” probate, when possible, with respect to privacy issues, reduction of costs, and efficiency in distribution of assets. Consequently, there are a number of inexpensive steps that every individual should take.
In the State of Michigan, if you do not take steps for the disposition of your assets the legislature has. An individual who dies without a Will (intestate) by default has a legislatively-determined Will. In other words, such an individual has forfeited the right to give direction to the disposition of his/her property. The legislative disposition may not have the desired result and may actually be against the wishes of that individual.
Lifetime transfers can be made to avoid probate. However, lifetime transfers (without professional guidance) are fraught with problems. Among others, many individuals attempt to transfer their interest in real estate by a Quit Claim Deed to avoid probate. This can create many unintended problems. For instance, if the grantee has legal problems such as divorce, tax liens, or money judgments, the same may be satisfied out of the transferred property. In addition, if the transferring individual changes his/her mind about the transfer, it cannot be changed without the consent of the grantee.
Therefore, to avoid unintended dispositions of property and adverse consequences, everyone should have in place some basic estate planning documents. At a minimum, Guy Vining recommends:
1. DURABLE POWER OF ATTORNEY (“DPOA”)
In the event of a lifetime disability or an injury that impairs mentation, a substitute to handle an individual’s affairs must be employed. Without a proper DPOA, relatives will be required to go to the Probate Court for the appointment of a guardian and/or conservator. This is not only expensive, but it may cause family disagreements to ensue.
In addition, the disabled individual’s private information is made public as annual reports and accountings will be required by the Probate Court.
This can all be easily avoided by properly executing a DPOA before an impairment occurs. The DPOA authorizes, without court order, another individual to handle the affairs of the disabled individual. It may be specifically drafted with respect to the wishes and the financial circumstances of the individual creating this document.
2. DESIGNATION OF PATIENT ADVOCATE (“DPA”)
By statute an individual may also designate a responsible person of their choice to make medical decisions in the event of a traumatic or disease-caused disability. Such a person is known as a “patient advocate.” The patient advocate is empowered to meet with health care professionals, consider medical options, and make informed decisions with respect to treatment plans. The individual creating this document may also provide for his/her wishes with respect to the measure of life-sustaining treatment to be employed.
As in a DPOA, a DPA is helpful in eliminating confusion or quarrels within a family and the need for Probate Court intervention.
3. SIMPLE WILL
Unless a person has a duly-executed Will, the laws of the State of Michigan determine how his/her property is distributed, irrespective of their actual desire. Think about it. You will probably agree that it is better to make the dispositions that you prefer.
In addition, with a properly-executed Will, you may nominate the person responsible for the winding up of your affairs. Such an individual is called a “personal representative.”
Finally, by Will you can let your intentions be known with respect to preferred guardians of minor children and establish a testamentary trust for the benefit children, grandchildren, and other beneficiaries.
In summary, there are many good reasons for everyone to have in place certain basic and inexpensive probate documents. In addition, you may wish to consider the benefits of more sophisticated estate planning, depending on your circumstances.
4. LIVING TRUST
A more expensive “up front” but commonly-used instrument to entirely avoid probate is a properly-funded Living Trust. Such a trust receives all of the property of an individual during his/her life and provides that the creator (the “grantor”) is the initial trustee with the right to fully administer it by adding or deleting any property. Upon disability or death, the Trust is then administered by a successor trustee, named therein, in accordance with the wishes expressed. Since the Trust was funded with lifetime transfers, there are no assets to probate.
There are many, many other advantages to a Living Trust. Among others, it keeps an individual’s property and affairs completely confidential and assures that the dispositions, including cash bequests or trust continuation, for the benefit of others, is carried out.
For standardized matters, Vining Law Group, PLC, has listed a flat fee schedule. It is Guy Vining’s policy to initially discuss estate planning matters by telephone without any charge. If you would like to receive a fee schedule or initial consultation, please do not hesitate to call.
If your needs are more complex, Mr. Vining will ordinarily be able to provide you with a reasonable estimate of expected fees.
For all matters, arrangements may be made for your convenience to pay fees by credit card or over a 90-day period.