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Estate Planning, Trusts and Wills - Michigan Law
Do You Know The Difference Between: Living Trust, Living Will, Testamentary Will?
Living Trust
It is a legally binding document whereby you place your property into a trust that you still control while living. This is why it is called a “living” trust. The trust document will state who gets the property of the trust when you die. At death, your property immediately passes to your beneficiaries. This eliminates going through probate court, which can be expensive and time consuming. You can revoke (dissolve) a living trust at any time if you change your mind.
Testamentary Will
It is a legally binding document that dictates who will get your property after your death. It can also designate guardians for your minor children. Unlike a trust, your estate must still pass through probate court before your heirs receive their share of your property. The probate court, however, will still follow the terms of your will. (If you die without a will or a trust, the probate court will follow Michigan statutory rules of intestate succession as to who will get your property — this may not be what you wanted).
Living Will
Michigan law does not explicitly recognize the “living will”. However, Michigan does allow the designation of a patient advocate, which has largely the same effect as a “living will”. A patient advocate is someone whom you have appointed to make decisions regarding your medical treatment when you are no longer able to do so. The patient advocate must follow your explicit instructions that were made while you were competent through a legally binding document known as a health care declaration that names the patient advocate and gives them durable power of attorney to act on your behalf.
In particular, your health care declaration should provide the patient advocate with specific guidance as to what to do when you are terminally ill or in an irreversible coma. It should instruct them as to when to withdraw or withhold further treatment that only prolongs your life without hope of recovery. By limiting the scope of treatment in such circumstances, a health care declaration can protect your estate from being drained away by unnecessary medical bills and allow you to leave more to your heirs.
Ten Reasons Why You Should Have a Will
Peace of mind before you rest in peace.
Avoid family conflicts. Grandpa would roll over in his grave if he saw how his family was squabbling over his money and/or his possessions.
Leave instructions on your wishes for your remains. You always wanted to donate your body to science, but instead you wind up sitting in some urn on someone’s mantle.
Trust provision for minors and young adults. Without one, 18 year old Junior will have a party with his inheritance and dispose of all of his inheritance before turning 19.
Guardianship - You name the person you want to raise the kids instead of having a probate judge decide without your input.
Property – If you do not decide how to dispose of your property, the state will use intestate succession rules. These rules apply when the decedent leaves no Will, the Will is denied by probate, or the Will fails to dispose of all of the decedent’s property.
Surviving spouse – Have your surviving spouse inherit all of your assets which you hold in your name only or maybe not. You can limit which assets you hold in your name will pass to your surviving spouse with a properly drafted Will. However, you cannot completely disinherit a spouse because Michigan has an elective share statute giving a surviving spouse the right to elect either the terms of the Will or a share of the estate as determined by statute.
Exclusions – Make sure that your spendthrift child, to whom you have already given much of your savings, does not inherit when you die.
Charity – Make a contribution to your favorite charity before facing your maker – this will be your last chance to get some points in the plus column.
When your brain wave is flat, you want someone to pull the plug; however, because your descendants can’t agree, you remain on a ventilator while the hospital bill climbs through the roof and eats up all of your estate.