“But I am young. I don’t need an estate plan; I am not married and do not have children, so I do not really need a will; or I do not really own that much property, so is a trust really necessary?”
You may feel that only people who are married, have children, are advanced in age, or have a lot of high-value assets need an estate plan, but that could not be any further from the truth. The truth is, everyone needs an estate plan, no matter where you are in life. What type of estate plan each person has may vary depending on the person’s specific circumstances, but some type of estate plan is needed no matter who you are.
An estate plan includes much more than just a will. It is a set of documents that provide for not only your death but your incapacity, as well. An estate plan package includes a will, living will, power of attorney, healthcare power of attorney, and often a funeral planning declaration. Often, it includes all of these documents, as well as a living trust.
Why Do I Need a Will?
You may think you should have a lot of assets to need a last will and testament. This idea is a large misconception. The point of a will is to make it easier for your loved ones to handle not only your assets but your liabilities after you die. Even if you do not own a home, you may own bank accounts, cars, various financial accounts, and more; and you may also have a significant amount of debt, including credit card debt and student loan debt. What happens to that debt when you die? Your personal representative will evaluate your financial situation, pulling together everything you own and everything you owe and making sure that everything is addressed and divided appropriately. It is not an easy task and is important you pick someone you trust to do this properly.
Additionally, if you have minor children, a will is a necessity. By not having a will where your intentions are stated as to who will take care of your children in the event of your death, you are leaving your loved ones open to a difficult situation. Relatives may fight over who takes care of your children, and someone you may not want to be the guardian may end up being appointed in that position. It is important to have your wishes clearly stated in a legal document, such as a will.
Why Do I Need a Living Trust?
One of the biggest reasons why clients want a living trust is to avoid the probate process. Not only is it a lengthy process, but it is fairly expensive, as well. The State of Michigan requires an inventory of all of the assets in the deceased’s name be submitted following his or her death. From that list of assets, which includes your home, cars, and bank accounts, an inventory fee is assessed based on the gross total value of your assets. This fee ranges anywhere from three to five percent of that gross amount, and this fee must be paid in full in order for the estate to be finalized. By having a living trust, you have control over not only who gets your assets but you also avoid putting your loved ones through the difficult process of probating your estate.
You Need a Living Will
Your living will states what you would want to have happen should you be in a position where you have no viable chance of living. Not having this document ties the hands of hospital staff who have no choice but to keep you alive at all costs. Most hospitals ask for a copy of your living will and healthcare directives before you are admitted or have surgery. It does not matter how old you are. You need this document.
Powers of Attorney: Financial and Medical
Two other important documents are part of an estate plan: a power of attorney and healthcare power of attorney. A power of attorney allows you to appoint someone who can make financial and legal decisions on your behalf during your lifetime due to incapacity. For example, if you suffer from stroke and need nursing care, your power of attorney will be able to sign legal documents for you, as well as pay your bills and make major insurance decisions on your behalf.
A healthcare power of attorney is an individual who will make important medical decisions on your behalf. If you be in the middle of surgery and not be able to make an important life-saving decision, this individual would authorize any necessary treatment.
At Sullivan Law, we offer estate planning packages at a flat and reasonable fee. We also offer free consultations to discuss what your needs are, what you would like to do, and how that can be best accomplished. Everyone’s needs are different, and your wishes should be clearly listed and understood.
Call us at 248.917.1351 or email at asullivan@sullivanlawonline.com to schedule your free consultation today. We look forward to working with you!